Talking Real Estate with Hope Leitner, February eNewsletter
Winter is nearly over, Spring is on the way, and already I have buyers lining up. So, if you've been thinking of selling, think hard. We need homes on the market in San Diego! The gains in 2020, 2021 & 2022 were so extreme, any decline at all just indicates a stabilizing market, there's no crash in sight.
This month I want to talk about contracts and financing - very good topics if you have anyone who's looking at getting into the market for the first time.
February - Ponder this - An anonymous quote recently tickled my funny bone. “A person doesn't know how much he has to be thankful for until he has to pay taxes on it.” - This is just so true. No matter how painful it is to see those payments winging their way to the government coffers, I am so grateful that have the income that triggers the payments, and community that benefits from the payments. Taxes pay for an amazing range of services that we all benefit from, like cancer research and the National Park Services.
So, just like you have your taxes done every year, you should also know what your home equity is. You won’t know how much you have to be grateful for until you do. Give me a call.
As always, I am here for you, your family, and friends.
Hope Opens Doors
HOMEBUYERS, HOME SELLERS, TRANSACTION ADVICE
Can the Seller Break a Purchase Contract?
It’s a common scenario in a hot market – the buyer has their next home within their grasp, but then the seller backs out of the contract. How can this happen and what can buyers do about it?
Home sellers back out of signed contracts because of a higher offer, higher appraisal than the buyer’s offer or a financial or emotional problem, such as job loss or the death of a family member, according to Bankrate.com. Some sellers simply have mixed feelings about moving or resent the buyer’s demands.
If a seller wants to back out, there are three ways to do so without expensive consequences.
If the buyer fails to perform, such as not being able to obtain financing, failing to provide a deposit, or missing the closing date. However, the seller should have a provision in the contract regarding notice to the buyer to perform and then comply with those provisions to get away without penalties.
If a written contingency hasn’t been met by the buyer or if the seller included a contingency on being able to buy another home, but they’re unable, they can walk away from the purchase contract.
Last but not least, the contract should include an attorney review clause. They may find something in the contract that allows the seller to bail out.
Otherwise, the seller may be ordered by a court to pay the buyer a large amount of money or make the seller follow through with the sale.
HOMEBUYERS, FINANCE, MORTGAGE INTEREST RATES, BUYING ADVICE
Advice for First-time Homebuyers
First-time homebuyers are discouraged by high home prices, higher interest rates and continuing inflation. According to the National Association of REALTORS, by mid-2022, first-timers made up only 26% of all homebuyers, the lowest number in 41 years. The age of first-timers rose from 33 to 36, an all-time high, while their median household income slipped to $71,000 from $86,000 year-over-year.
To help you get into a home of your own and start building equity, Berkshire Hathaway HomeServices network professionals provide the following advice to first-timers:
Get educated. Freddie Mac and Fannie Mae offer no-cost learning modules that help first-timers qualify for some loans, pay lower down payments, qualify to buy with lower income or lower credit, get help with closing costs or down payment assistance, and more.
Get into the market. You can’t build equity if you don’t own a home, so it’s better to purchase something now even if it isn’t your forever home. There will always be a market for starter homes, so you would do well to buy a smaller, older home in a less expensive location. The most first-timers ever recorded purchased homes in small towns (29%) and rural areas (19%).
Get comfortable with compromises. Your first home doesn’t need to be your dream home, so choose the one you can live with for the next five years or so, suggests com, to make up closing costs, transaction fees, etc. You can always improve the features and condition of your home later on.
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