Here’s what you need to know before you start shopping in the Hermosa Beach Real Estate market:

1) You can’t time the bottom – The fact of the matter is the house you buy will more than likely be worth the same if not less next year. So, you are now thinking, great I’ll wait until next year and time the bottom. Actually, it is much harder to do than you think and the current Hermosa Beach Real Estate market is the best buyers have had in the past two decades. Inventories are plentiful and mortgages are still low.

Just take your time searching, find the place that is right for you and drive a hard bargain. Don’t be shy about throwing in a low ball offer. Your real estate agent can help you determine what would be too low. If the seller decides not to accept the offer, then no harm done other than a bit of paperwork.

2) It’s all about the mortgages, mortgages, mortgages – House inventories are high and will remain high throughout the summer months, but getting good financing will become increasingly more difficult. It is true that the Federal Reserve has slashed interest rates, but fixed mortgages don’t directly follow the Fed. They reflect the bond market’s expectations about inflation, which remains a concern. The 30-year, now at 6.1%, will likely reach mid-6% by December and 7% in 2009. That means there could be a penalty for waiting to buy even if prices fall more. As for variable-rate loans, the spread between conforming ARMs and fixed loans is too narrow to do you much good.

3) You too can get a Jumbo Loan – Mortgages in amounts greater than $417,000 – the limit for buying by federally sponsored mortgage agencies – usually run a fifth of a percentage point above conventional products. But investors are shunning jumbos, which now average 7.2% and are unlikely to drop much this year.

Certain jumbo borrowers could get relief, however. A new law allows Freddie Mac and Fannie Mae to buy loans as large as $729,750 in 71 high-priced areas. So far “jumbo conforming” loans average 6.6%. The program has gotten off to a slow start; you’ll need to shop around. And unless Congress acts, this bargain will disappear at year-end.

4)  Buy near good schools – By now you’ve heard from somebody who knows somebody who got a great deal on a foreclosed property. But when you buy a house, you’re also buying into a neighborhood. And foreclosures tend to be bunched in areas where residents and speculators alike took out exotic mortgages to get into homes they subsequently found they couldn’t afford. That’s not a recipe for stability. Prices and quality of life could both decline further.

Instead, go for areas like Hermosa Beach Real Estate with highly rated schools. They generally fare better during downturns, and that pattern is holding today.

What is the trick?

Good old fashioned attention to details.

Here is how the story goes…The property came on the MLS but stated no showings until after the Brokers open house. I knew my buyer would love this place, so I let them know when the Brokers open house would be and had them take a long lunch. Of course, every other Hermosa Beach Real Estate agent knows that trick and there was a flood of buyers there checking out the place at the same time as us.

It was very obvious that offers were going to be written that day, so we determined a fair price and I called up the agent to submit the offer. Just as we had suspected other offers had already been submitted as well. The selling agent asked me the amount and details of the offer and I let them know I would stop by to deliver it in person. I have a secret method of delivering the offer that always impresses the selling agent…only my buyers get to know that secret…

The next day I got a call from the selling agent letting me know that ours was the lowest of all the offers, but since it was written so flawlessly and because of my presentation they were going to accept the offer that day. Turns out the sellers were confident that we could bring the deal to a close in the timeframe they needed in order to close on their up leg property. All the other offers although for more money contained so many mistakes that it left the agent and sellers wondering what would happen if these mistakes continued through the entire process.

So, when buying Hermosa Beach Real Estate and you want to win in a bidding war without losing your shirt, you need an agent that not only knows how to find property, but also knows how to deliver quality contracts. Give me a call 310-283-8086 or email and let’s find you a deal…

Focus on these three different areas:

• Enthusiasm
• Marketing
• Communication

The old standby of years of experience and number of transactions closed doesn’t get a house sold anymore. A newer more technology focused Hermosa Beach Real Estate agent can do a better job when he or she is not only excited about your home, but focused on selling it above all else – rather than being scattered and pulled in 17 directions by other listings.

If you do decide to go for experience, be sure to learn how much of that experience has been in homes in your price range. Some agents will take every possible listing, but only work at selling the high ticket homes. Shy away from them! They are just hoping that some other agent will sell the lower priced listings and they’ll get half the commission.

Some people recommend working with a Hermosa Beach Real Estate team. I don’t. But that is my personal bias. To me, working with a team to sell a house is the same as trying to work with large corporations where no one ever knows what anyone else is doing. The value you get by working with one agent who knows every detail of the activity on your listing is worth far more than the presumed efficiency of a team.

Meanwhile, here’s why I believe enthusiasm, marketing, and communication are the keys to success.

Enthusiasm: When a Hermosa Beach Real Estate agent is truly excited about your home, it will shine through in all the marketing materials and in every conversation he or she has with customers and other agents. People listening will know they MUST see this house!

If, on the other hand, an agent comes through your house and begins pointing out its many faults, just say “next.” This can be a tactic to push you into a lower price so the house will sell faster. It can also mean the agent just doesn’t like your house. Either way, you don’t need that agent.

Being enthused doesn’t mean being blind. Your agent may love the layout, the view, the location, and many other things, but still give you recommendations for repairs before the house goes on the market. These are recommendations designed to show the house in its best light, so listen!

Marketing: A strong web presence is a must, and there is no excuse for being weak in this area. A good job means taking plenty of photos and writing descriptions that go far beyond the old basic “Three bedroom, two bath, deck” variety.

Your presence on the web should be in the form of a home tour that offers enticing details. Details that make prospective buyers drool at the thought of living in your home.

The MLS listing should include as much of that as allowed, and the flyers your agent hands out should radiate enthusiasm for the many special benefits your home offers. The flyer in the box out front should offer a glimpse of what buyers will find when they get inside… NOT merely show them a picture of the house they see in front of them and tell them something they can see from where they’re standing.

Ask where the agent advertises, and then ask why.

In some communities, newspaper ads work. In others they don’t. Your Hermosa Beach Real Estate agent knows which advertising mediums actually bring in customers, so don’t be upset if he or she doesn’t use a newspaper you read or a magazine you recommend. Agents have learned through trial and error – and countless wasted dollars.

In some communities open houses are a good tool. In others they are a total waste of time. Your agent knows, so don’t insist on an open house just because your brother-in-law in some other town thinks you should have one.

Communication: You should be able to count on your agent to let you know all the news, both good and bad. A phone call after each showing is not too much to expect, nor is a monthly report outlining showings, ads placed, feedback, etc.

When you call, you should be able to count on a return call within a few hours. Remember that you are not the only client, and if your agent is out showing or attending a closing, he can’t return your call until he’s finished.

You shouldn’t expect to be able to contact your agent 24 hours a day, but you should be able to count on a call back during the evening or on week-ends. Just don’t demand immediate attention. Sometimes your agent will be out on a showing or a listing, and sometimes he or she will be spending time with friends and family. Even real estate agents have lives outside of work. If you leave a message in the evening, tell your agent how late they can return the call.

Possibly the most important deciding factor of all is one I didn’t mention above. That is your feelings. Trust your gut to tell you if the agent you just met is “for real” and is a person whose company you can enjoy and whose advice you can trust. If you feel uneasy going in, it will only get worse.

Generally, a condo or townhouse is described today as a home (or apartment) that is attached to one or more other homes (or apartments) – with common walls and roof – with 2 or more stories and sometimes a basement. So, you may buy a townhouse (town home) in condominium-style ownership or find a condo for rent -in an apartment style community.

1. Size up the playing field – Study your local market and investigate other homes for sale, local asking prices and what buyers are paying.
2. Price competitively – In recent years, sellers were able to set a price and wait for the bidding wars. No more. If a home is overpriced, a buyer will dismiss it and move on to the next one. Because of the growing number of properties on the market, buyers have a greater number of homes from which to choose.
3. Don’t snooze – Time is money. The longer your house takes to sell, the more money you lose.
4. Negotiate – Offer concessions to potential buyers, such as making minor fixes. These gestures will repay you and may earn you more money in the long run.
5. Strike a deal with your agent -  You can negotiate to pay 5% if your agent brings in a buyer.
6. Play up assets – Now that there are more properties on the market, sellers must impress buyers. To attract buyers, determine what the popular “look” for houses is in your area is and mimic it.
7. Take the money and run – If local sales are sliding, you might want to get out while you can. People don’t know when it’s time to take a loss and move on. If a cooling market translates into a smaller gain than you expected upon the sale of your home, consider relocating to an area with cheaper housing prices to make your money go further.

Even though lenders are much more strict on lending standards, it is still possible to get a great interest rate. Of course, the higher your credit score and income is will go a long way to making the loan process easier. As more buyers begin to take advantage of the lower prices, lenders will become even more picky in deciding who gets funded. It is advisable to check your credit history and work towards lowering your debt ratio as you prepare to purchase your new home.

If you think you are ready to get out there and find your own deal as the Redondo Beach market begins to change towards an upward trend, you will want to contact your mortgage professional to make sure you are still qualified for the amount they told you last year. Keep in mind it is a buyer’s market and having all your finances in order will give you huge bargaining power in price reductions and seller concessions.

An FHA loan is a loan insured against default by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make large mortgage loans.

What this means for buyers is:

1. Low to Zero Down Payment
2. Easier loan qualification
3. Lower interest rates than conventional programs
4. Easy to use gifts for down payment and closing costs
5. No prepayment penalty (a big plus for subprime borrowers)
6. An FHA loan may be assumable
7. Possible leniency during financial hard times
8. Less than Perfect Credit is OK
9. More protection to keep your Home

With the mortgage market going through so many ups and downs, this is just the ticket to getting a place in Hermosa Beach.

Stop on by this weekend and have another look.

Do you qualify for a FHA loan?
Contact Milestone Mortgage’s Sarah Purcell at 310-798-6016 or email sarahp@milestonemtg.com

Click here to see the Hermosa Beach Short Sales

Here is a great article from About.com:

Why Would a Lender Do a Short Sale?
There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.

If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:

• Obtain legal advice from a competent real estate lawyer
• Call an accountant to discuss short sale tax ramifications

As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. will consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.

Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.

• Call the Lender
  You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the “real estate short sale” or “work out” department, you want the supervisor’s name, the name of the individual capable of making a decision.
• Submit Letter of Authorization
  Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
  • Property Address
  • Loan Reference Number
  • Your Name
  • The Date
  • Your Agent’s Name & Contact Information
• Preliminary Net Sheet
  This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
• Hardship Letter
  The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
• Proof of Income and Assets
  It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
• Copies of Bank Statements
  If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it’s probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
• Comparative Market Analysis
  Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
  • Active on the market
  • Pending sales
  • Solds from the past six months.
• Purchase Agreement & Listing Agreement
  When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to allow payment of certain items such as home protection plans or termite inspections.

Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.

This is a relatively easy task for a Realtor that know the area.  Buying real estate is sometimes compared to investing in the stock market. In order to be successful in either, you need to understand what you are getting into at that point in time. Nobody should randomly pick a stock without doing any research and expect to make a profit. The same is true in real estate. If you know the area and the market trends, then spotting a deal when it hits the market is easy. There are deals to be found everywhere and a realtor that knows the area and trends can help you find one. The number one way to get a deal is to know the seller’s motivation and to have an experienced realtor negotiate on your behalf.

Here are some tips for today’s market:

Buyers market – The supply is greater than the demand which means there are more homes on the market for sale then the normal amount. The sellers are more eager to sell which means you get the best deal for your money.

Better bargain in the slower winter months – Winter time is notorious for being slower for builders and home sales. Builders are trying to keep their crews busy, while sellers are trying to keep land moving.

Interest rates are still at historic lows – Since July of 1973 till 1981, fixed interest rates have been between 8.5% and 18.5%. In 2001, they dropped to about 7% and even dropped to 5.25%! Today, the rate is still around 6.0%.

Market set to increase significantly – With the inventory of unsold homes slowing and new home construction decreasing, along with jobs and population increasing, it will only be a matter of months before the supply runs low and demand increases. This is a sign that prices are near the bottom and it is best to buy in this type of market.