Tag Archives: California Real Estate

Home Warranties Offer Great Benefits to Sellers and Buyers

billsSometimes we get asked by both sellers and buyers if home warranties are worth it. Our answer is always YES as both parties benefit from these policies.

Home warranty plans, also known as home protection plans, provide coverage for home appliances and major heating, electrical and cooling systems in the event they fail or break down. If any of the items under warranty in the program should fail, the consumer simply contacts the home warranty company, and they see to it that the item is inspected, repaired or replaced by a qualified contractor for a small “service call fee” (typically $60-$75).

Having a policy in place makes a home, particularly an older home, more attractive to buyers, as it can provide piece of mind knowing there will be coverage for unforeseen repairs upon move in. They can also save the day and speed turnaround time during the escrow itself as having a warranty in place will take care of any last minute problems of failing appliances and systems that can lead to re-negotiations when it is time to close.

Research has shown that homes with a warranty plan sell faster and at a higher price point. Warranties are a very affordable way to help ensure a smooth home sale transaction and increase both seller and buyer satisfaction.

For more information on home warranty plans, check out the website of our partner American Home Shield.

More on the Housing and Economic Recovery Act of 2008

signing

A sweeping housing measure signed into law last week by President Bush is a boon for all current or aspiring homeowners, promising to provide increased access for first-time buyers to mortgage financing, particularly in high-priced areas such as here in California; tax credits for first-time buyers; and much-needed stabilization of the nation’s turbulent financial markets.

“This federal housing package represents a significant move in the right direction for California homeowners,” said California Association of Realtors (C.A.R.) President William E. Brown. “The measure will not only help thousands of borrowers facing financial trouble stay in their homes, but pave the way for thousands more to achieve the dream of becoming first-time homeowners, and help move otherwise skeptical buyers off the fence.”

Known as the Housing and Economic Recovery Act of 2008, this broad legislation will assist an estimated 400,000 homeowners currently facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a more affordable Federal Housing Administration (FHA)-backed loan. This particular feature of the bill aims to stem the rising tide of foreclosures that have been contributing to the downward spiral of home values across the state and creating more stringent lending rules that have made it impossible for many potential buyers even with good credit to purchase a home.

The bill also will permanently increase government backed loan limits in high-cost areas—something C.A.R. has been pushing for its members for some time. The bill permanently increases the conforming loan limit to $625,500. A former measure, The Economic Stimulus Act of 2008, signed in February, raised the conforming loan limit in high-cost areas to $729,750 from $417,000. However, this change was temporary set to expire Dec. 31.

Although a permanent loan limit at $729,750 would have been preferable, the new, permanent loan limit of $625,500 will open the door for many California homeowners hoping to refinance their loans into safe, affordable loan products, and allow first-time home buyers to get back into the market, up and down the state.

“With more buyers able to enter the market, and greater access to affordable loan products that won’t have home buyers struggling six months down the road to make their payments, we can expect to see more buyers coming back into the market,” Brown said. “Increased access to mortgage capital is a key provision of this measure and will significantly improve the options for these first-time buyers here in our state, where home prices remain among the highest in the nation.”

The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area’s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area’s median home price, up to $625,500. Both new loan limits will be effective upon the expiration of the former measure’s economic stimulus limits on December 31, 2008.

Another key feature of the bill is a tax credit for first-time home buyers, who may now receive a tax refund worth up to 10 percent of a home’s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.  While this sounds nice, it is almost irrelevant here in California where virtually all homes will qualify for only the $7500 maximum.

Steps for lowering the cost of buying a home are critical in a market where the affordability rate, i.e. the percentage of households in California that can afford to buy an entry-level home, although showing some strength in the recent months, remains at 44 percent.

The legislation also allows for the Treasury Department to create a federal backstop program to ensure the financial well-being of Government Sponsored Enterprises (GSE), specifically, Fannie Mae and Freddie Mac, the nation’s two largest mortgage lenders.

“By providing the GSE with a solid regulator, and giving the Treasury the authority to step in and ensure the financial well being of the GSE, this new legislation should restore investor confidence in Fannie and Freddie, allowing them to continue to create programs that make the home-buying process an affordable and viable one for all,” Brown said.

It remains to be seen how much these measures will stem the bleeding and turn the tide on this financial and housing crisis, but they certainly are a welcome step in the right direction.

Find your Dream Home in California

Is your dream home etched in your mind? Are you just waiting for the perfect time to bring it to reality? Now is the time! The market is slow at this time, which makes it a buyer’s market. With the interest rates low and many homes available, there is no better time than the present especially if you are looking for a home in the Del Mar, Solana Beach, Carmel Valley California areas.

Make a list of what you want your dream home to look and feel like. Involve the whole family in this project. After all, you want them to be happy too. Once you have this list, you have the advantage to take your time and look for that perfect home for you and your family. Then, when you start looking, keep in mind that there you may have to do compromising.  You may not find everything on your list, so prioritize the features and define for yourself what are you “must haves”.  You also may end up finding that as you begin to actually look at homes, your “must have” list may shift.  Your priorities may adjust.  That’s ok, just be sure to keep your real estate agent abreast of your thinking!

Use your senses: once you walk into a home you can feel the personality of that home. Here are some thoughts that should be going through your head:

  • Does it fit my family’s personality and more importantly, our lifestyle?
  • Does the neighborhood feel right, and does it seem like the right environment for my family?
  • Can I see us enjoying many, many years of happiness in this home?

Another great idea would be to let us help you find your dream home. We have been inside many homes in the Del Mar, Solana Beach, Carmel Valley California area and will be able to help you narrow your search down until we find the perfect home for you and your family.

So head on over to our website at DreamHomesByTheBeach.com and let us help you find your “Dream Home”!