JaCi Wallace

Lockbox Use in Sacramento Real Estate

Lockbox Use in Sacramento Real Estate

Use This Little Known Trick to Make a Non-Contingent Offer!

Home refinance
Use This Little Known Trick to Make a Non-Contingent Offer!

If you haven’t noticed, we are in the middle of a very hot seller’s market. The 2020 pandemic caused thousands of home sellers to pull their home offers off the market, fearful of strangers entering their homes. At the start of the pandemic, 1.49 million existing homes were on the market for sale. A whole year later, that number dropped to just over 1 million. Combine the lack of homes with lower interest rates and a whole new perspective on what we want out of our living space, and the demand for housing went through the proverbial roof.

If you are just now dipping your toes into the homebuyer market, you most likely have no clue what to expect. You will not get your offer excepted unless you have a strategy in place. It’s why the most important thing you can do is get pre-approved by your lender (and I mean fully approved by an underwriter) and trust your real estate agent to advise you on current market conditions. If you take shortcuts, you will only end up wasting your time and will get your heart crushed when your offer is not even in the running.

Remember that sellers love clean offers with limited contingencies or none at all. And since contingent offers are usually a safeguard for buyers, they are not conducive in a hot seller’s market. In the eyes of the seller, one contingency that will most definitely disqualify a buyer’s offer is a Home Sale Contingency: when you tell a seller, you can only buy their home after you sell yours. Thus, making the purchase of their home contingent on selling your home first. They will quickly discount your offer and move on to the next. Secret tip of the day – RECASTING!

What Is Recasting?

Most buyers know they can make additional payments above their required monthly mortgage payment if they want to pay off their mortgage sooner. This is a common strategy to accelerate one’s freedom point or the moment they pay off their mortgage in full. Making an additional mortgage payment, say $250, will decrease your loan balance, but your monthly payment will stay the same. The term of your loan is reduced, but again, this does not affect your monthly payment.

Also, recasting is not something all banks will offer, so be sure to ask your lender if they provide this service. Recasting is also not a refinance as it will not change your loan terms or interest rate – instead, it will simply lower your monthly payment based on the newly reduced mortgage balance.

Let’s look at an example. Let’s assume that dream home of yours was just listed for $650,000, and you want to pounce. Figure you can sell your home and get $200,000 in net proceeds. But, you now understand your offer to buy that dream home of yours won’t happen if you make a contingent offer by telling the seller you have to sell your home first.

Your lender approves you with a $585,000 loan, putting 10% down on a 30 year fixed mortgage. Remember, you still must qualify to carry two mortgages; your current primary, if you have a mortgage in place, and the new mortgage. This is a short-term endeavor in this market, as you will sell your home right after you close on this dream home.

After you sell your home, you will take the $200,000 in proceeds and recast your new mortgage; thus, your $585,000 loan will be reduced by $200,000 to a new loan balance of $385,000. Your interest rate and term of the loan do not change, and your monthly payment is reduced based on the new, lower balance. This is not a refinance where you incur fees, and you can lower your monthly obligation to a more manageable place.

Key Take-aways:

  1. Recasting is just one of a few tactics to improve your chances of getting your offer accepted, and there are more, so please reach out to your trusted lender to learn more.
  2. Not all lenders offer to recast, so be sure to ask upfront before completing an application.
  3. Not all loan types are eligible for recasting, so be sure to ask your lender.
  4. Even if your mortgage is eligible to recast, it may still not be the best fit for your unique financial circumstances. For example, I had a client put 50% of their proceeds into the recasting process and split the rest between a reserve safety net account and paying off some high-interest debt.
  5. Refinancing might make sense. The main perk of recasting is to lower your monthly obligation; however, maybe your credit scores are better by the time you recast, and rates have come down. In this case, refinancing might make more sense.
In Gratitude,
Dan Tharp – Branch Manager – 916-257-1470
2250 Del Paso Rd. #A, Sacramento, CA 95834
NMLS# 280913 | Company NMLS # 3274
Equal Housing Lender
Use This Little Known Trick to Make a Non-Contingent Offer!

Realtor Ethics in Sacramento Real Estate

Realtor ethics in Sacramento real estateRealtor ethics in Sacramento real estate, either you have them, or you don’t. A fiduciary relationship requires honest and fair dealings between a Realtor and clients.  In fact, an agency relationship is, in essence, not putting your needs in front of another. It is why you can’t double end your own home if you are acting as the Realtor/Seller. How can you put a buyer’s needs above your own when it’s your home? Make this blunder, and your E&O may not cover it, should your escrow go awry.  That being said, our code of ethics requires us to treat everyone, including other agents, buyers, and sellers, honestly and fairly. Simply put, do unto others as you would have them do unto you, or Karma may come to a calling, and there may not be a footbridge back.

 

All too often, I see agents who don’t always take the high road if something can benefit them; principles and high standards simply fly out the window when it comes to them praying to the money goddess. Appreciation and gratitude for what others have contributed are short-lived when it comes to WIFM. No, folks, WIFM is not a radio station. It is an acronym that stands for “what’s in it for me.”

 

I have met some outstanding Realtors who have never sold out their principles for money.  I don’t think ethics have anything to do with how much money you make as Realtor.  Ethics in Sacramento real estate you either have them, or you don’t, I believe, is a fair statement. There are times where I’m very surprised at a Realtor’s business behavior. The most distasteful dealings are when someone has an entitlement attitude. I see it all too often. Gratitude, appreciation, and respect become foreign concepts. It is disappointing but then when leopards show their spots, believe it and dont forget it.

 

There are many fine agents who I’ve known for over 20 years. One example, I was about 5 years in the business, and I showed another agent listing in my office. The buyer tried to go around me and called this listing agent, asking her to write an offer for them. The agent said,” you will only buy this house with JaCi Wallace as I won’t represent you. JaCi did the work, she introduced you to the property, and she deserves the commission.” Needless to say, as a newer agent, I knew right then, I wanted to be that kind of Realtor as I was so impressed that she didn’t sell out to earn a double commission.

 

Sitting on the ethics committee for the Sacramento Association of Realtors, I hear astonishing things. Sometimes though a Realtor may not be technically in violation of the code, it doesn’t always mean they took the high road.  I think big egos in our business often create monsters who seem to rub other agents the wrong way. When I managed agents for a previous real estate company for about 10 years, I often told agents who started to have a level of success after 6-7 in the business to please remember they are not Hollywood movie stars.

 

Honest and fair dealings, Realtor ethics in Sacramento real estate are important. Please call Weintraub & Wallace Realtors with RE/MAX Gold at 916-233-6759, as our ethics and standard of care are reflected in our business model at all times.

 

JaCi Wallace

JaCi Wallace

Realtor Ethics in Sacramento Real Estate

What Is The Average Down to Purchase A Home?

 

What Is The Average Down Purchase A Home?

What is the average down to purchase a home? This is a wonderful and informative blog written by our preferred loan partner, Dan Tharp.  Enjoy! –JaCi Wallace. According to a Nerd Wallet 2019 Home Buyer Report, 62% of Americans think you need at least a 20% down payment to buy a home. Well, I am glad to report this is not true.

This myth may stem from something you have read about called private mortgage insurance. PMI is a type of insurance put in place if you put less than 20% down and default on your loan. PMI is arranged by the lender and protects the lender—not you—if you stop making payments on your loan.

Even though PMI may sound like a bad thing, there are benefits to putting less down in exchange for this added monthly fee. For many first-time homebuyers, saving 20% is herculean as it can take several years to build. For many, it’s more prudent to keep a 6-month reserve in the bank for emergencies or maybe some additional money for needed repairs and updates to your new home.

The good news, if you get a conventional mortgage (non-government, i.e., FHA or VA), once you reach 20% to 25% equity in your home, you can request to cancel your insurance – So it’s not there forever!

What Is The Average Down Payment On A House?

According to data from Attom Data Solutions, the average American pays about 6% for their down payment. Remember, there is no right or wrong or answer to how much you should put down. But here are some things to consider:

  • Do you have an emergency/reserve fund?
  • Are you a multiple-income-earning family, and what if one of you loses your job?
  • The condition of your home, and does it need repairs?
  • Look at your other debts.
  • Talk to your financial planner or mortgage advisor about what is best for you based on the loan program and your financial well-being.

While the average down payment is equal to about 6%, depending on your loan type and credit score, it’s possible to buy your home with as little as 3% down. Or, if you qualify for a USDA loan or a VA loan, you may be able to buy your home with no money down. So What is the average down to purchase a home? It is much less than what most buyers think.

Why Does Credit Matter?

Along with a low debt-to-income ratio and a solid financial history, you’ll want a high credit score to obtain the best mortgage rates. It’s a pretty simple formula – If you have demonstrated a history of managing your debt responsibly, then you are more likely to get the best rates and terms on your home loan. A good score, according to MyFICO, is 700. For the best rates, however, a score of 740 or higher is needed.

What if you have no credit? I have clients that are good at not taking on debt because they choose not to have credit cards and pay for things in cash. For these folks, it may be impossible to obtain a mortgage. To start building a responsible credit history, consider a low-limit credit card or a secured loan.

If you need a few pointers to improve your scores, call me. We can review a more detailed analysis of tricks and methods we have learned over the years. Also, we work with some very talented and local credit specialists that we can refer you to. You would be surprised at the big difference a small change can make. I hope you enjoyed this blog titled, what is the average down to purchase a home.

If you want to work with a knowledgeable Realtor, please call Weintraub & Wallace Realtors, with RE/MAX Gold. You can reach us at 916-233-6759. Our Loan Partner, Dan, can help you through the loan process, so give him a call.

In Gratitude,
Dan Tharp – Branch Manager – 916-257-1470
2250 Del Paso Rd. #A, Sacramento, CA 95834
NMLS# 280913
What Is The Average Down to Purchase A Home?

March 2021 Sacramento Area Housing Market Update

 

 

Median.pngMarch 2021 Sacramento area housing market update is another interesting blog, written by Josh Amolsch; these are his views and agree or disagree the data always tells a story. Remember, these are merely opinions as none of us have a crystal ball on the real estate market; at best we are guessing about the future.  Sacramento is a much different market compared to many other cities in the US, due to the proximity of migration here from the bay area and how Covid-19 fundamentally changed the workplace to home offices from brick and mortar. The record-low interest rates and how long they last perhaps will have the greatest impact on the current housing demand.  Enjoy–JaCi Wallace.

 

Diving right into the meat of what everyone wants to know about the March 2021 Sacramento area housing market update, we see that the Median single-family home price spiked yet again. We are now at $485,000 in March, about a $39,000 increase just since January. When was the last time you made almost $40K in two months? As the affluent people reading this chuckle to themselves, just wait when the dips start occurring. While no seasoned professional sees a 2008 style crash coming, there most certainly should be a correction. My guess is within the next 12 months. I wonder if anyone is tracking where these small amounts of Sacramento area sellers are going once they sell. Yeah, it is great to make a pile of cash on your home in this epic, once-in-a-generation seller’s market, but then they step into buyer hell of trying to find a decent home in a decent neighborhood for a decent price. Aha, decency in California must be eroding just as fast as affordability. I crack myself up.

 

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The graph above shows an average of 14 days on the market for single-family homes in Sacramento County. But man, let me tell you, the real number is probably 4-5 for homes most buyers are chasing. It is the “new normal” to pay over 10% above asking in some cases for a home that is decent. Gather those gift funds and get ready to swing a hammer. Sacramento has changed forever. New money is here and that sweet smell of trickle-down inadequacy from the state, county, and city planning will be with us for years to come. I have said it before and I will say it again, let the builders build. Incentivize the builders so that we can gain a supply of homes. Encourage vocational learning, build up the skilled worker stock. What, are we going to be expected to call a hipster software programmer to fix a leaky pipe in the future? It would be foolish to fix a flat tire by hammering another nail into it.

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I know, just another middle-aged guy complaining about stuff.  Well, I think it is discrimination to punish people through excessive taxation and to limit their freedoms. Also, what about all of the hard-working people that just want to have a home of their own but don’t have a chance right now because of the policy decisions that keep supply from keeping up with demand? Fair housing laws sound good on paper, but by action, the powers that be are not doing enough to meet that standard of Fair housing for those who are playing the game right and are trying to make a life for themselves. We all depend on the Government to pull the strings, to an extent, to provide better lives for us all.
Well, the good news is that people can move. For the ones that are paying attention, plans may already be in place. While myself and all of my top producer friends don’t see a big crash coming. What will make a big difference soon for homeowners thinking about selling, is there will be much less competition among buyers. This “King of the Hill” moment for sellers is likely coming to an end one day, but when is the bigger question? Ask a Realtor, ask an appraiser, ask a politician, ask a subdivision new home builder for their opinion on how long the Sacramento real estate seller’s market will last and you likely will get many different timelines, as no one knows for sure.
If you would like to buy or sell a real estate property please contact Weintraub & Wallace Realtors with RE/MAX Gold. We can be reached at 916-233-6759.
         — Josh Amolsch

Josh Amolsch

 

 

 

 

 

 

 

 

  Weintraub & Wallace Realtors

 

March 2021 Sacramento Area Housing Market Update
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