The journey to acquiring a new home often comes with its set of challenges, particularly when it involves selling your current home. The Buy Before You Sell program offers an innovative solution, streamlining the process for homeowners transitioning to their next residence.
Understanding the Buy Before You Sell Program
This program is a strategic approach to real estate, designed to facilitate a smooth transition for homeowners. It simplifies the process of buying a new home while ensuring the optimal sale of the current property, combining speed, certainty, and financial leverage.
Key Benefits of the Program
Immediate Equity Access: Unlock a significant portion of your current home's equity upfront, aiding your next purchase.
Competitive Purchase Offers: Utilize the unlocked equity to make strong, contingency-free offers on your new home.
Single-Move Efficiency: Avoid the hassle and expense of renting and moving twice. Move straight into your new home.
Enhanced Sale Potential: Sell your now-vacant old home more effectively in the market, attracting better offers.
How The Program Works?
Check Your Eligibility
We offer a weekly off-market deal list for our clients. We have fix and flip, buy and hold, multi-unit, land opportunities and more. We help analyze properties, calculate rehab and project returns for our committed investor clients. Call James to learn more about these opportunities.
Curious about what's happening in your neighborhood? You can create a custom market report to see what's active, under contract, and sold in your neighborhood!
As we step into a new year, the real estate market is witnessing a trend buyers have been waiting for: mortgage rates are falling, and now at their lowest in the past three months. Mortgage interest rates are now being quoted in the low 7's and high 6's locally, a significant change from the highs around 8% back in October.
The Ripple Effect of Lower Mortgage Rates
The decline in mortgage rates has been a catalyst for increased housing demand. The leading indicator in market activity is led by mortgage applications. Mortgage applications increased last week to the highest level in 6 weeks.
What will the housing market look like in the new year if mortgage rates continue their downward trend?
Based on the National Association of Realtors if interest rates drop just 1%, 5 million new buyers could emerge in 2024. This could create another unhealthy seller's market and sharp increases in prices if inventory of existing homes don't pick up at a similar pace. Economic conditions point to lower inflation and we anticipate a drop in the Fed Funds rate in the spring time signaling lower mortgage interest rates.
The Peterson Team is here to help, whether you're buying, selling, or just exploring your options. With our in-depth market knowledge and commitment to client success, the Peterson Team is your ideal partner in navigating these dynamic market conditions.
Ready to make your move? Buying, selling or investing? Contact the Peterson Team today for expert advice and tailored solutions. Let's turn your real estate goals into reality.
I had to share this meme as it resonated so well with me 😂. I try to tell myself not to overeat on Thanksgiving but it’s so hard! We are so thankful for our family, friends and amazing clients. We appreciate you more than we can express. We all work diligently, and it's challenging to communicate with everyone we want to in life. Your support and friendship mean everything to us, and we will always be here for you.
Enjoy this time of year with your family, and know that we are always here to help.
I had to share this meme as it resonated so well with me 😂. I try to tell myself not to overeat on Thanksgiving but it’s so hard! We are so thankful for our family, friends and amazing clients. We appreciate you more than we can express. We all work diligently, and it's challenging to communicate with everyone we want to in life. Your support and friendship mean everything to us, and we will always be here for you.
Enjoy this time of year with your family, and know that we are always here to help.
This Midtown duplex is located a short walk to the Handle District, Downtown Sacramento, Sutter Hospital, the Sacramento Food Co-Op, and two Temple Coffee locations. The lower level of the duplex has an open floor plan and is updated with two bedrooms and two baths. The upper level has two bedrooms with one bath. Both units are approximately 1,200 sf. Each unit has a washer and dryer.
Who should buy it? A first time home buyer looking to build wealth quickly. (aka House Hacking). Live in one unit and rent the other unit for $2,300 per month, reducing your expenses dramatically while building equity, and capitalizing on the massive tax advantages. In a couple of years, rent the other unit, pull cash out with a lower rate and do it again.
Will not last @ $625,000 - (Worth $750,000 - $800,000) at pro-forma market rents.
This property is off-market, meaning you will not find it listed on the MLS. Call James for details: 916-500-4410
We offer a weekly off-market deal list for our clients. We have fix and flip, buy and hold, multi-unit, land opportunities and more. We help analyze properties, calculate rehab and project returns for our committed investor clients. Call James to learn more about these opportunities.
Curious about what's happening in your neighborhood? You can create a custom market report to see what's active, under contract, and sold in your neighborhood!
We at the Peterson Team would like to take a moment and send a big THANK YOU to our veterans! A special thank you to our veteran friends, clients, family members and especially to our fathers, John Peterson and Stan Trybom, for serving our amazing country! Home of the free, because of the brave!
There are several amazing Veterans Day celebrations throughout the Valley. As a family and as a Boy Scout leader, when our son was younger, we’d participate in the Folsom Veterans Day Parade. It’s always a good time and brings out an amazing crowd.
Please remember to thank a Vet and consider visiting a local Veterans Day parade!! Here are some local celebrations to check out:
Curious about what's happening in your neighborhood? You can create a custom market report to see what's active, under contract, and sold in your neighborhood!
Mid-2022 was a tumultuous time for the housing market. Interest rates, which had been comfortably low at around 3%, suddenly spiked, reaching up to 7% by the year's end. This surge had a significant impact, particularly in areas like the Sacramento region, where home prices saw a decline of up to 15% from June through December 2022. This downturn was accompanied by a noticeable drop in new inventory, leading to a market slowdown.
A Turn of the Tide: Stabilization in Early 2023
As the new year dawned, the market began to show signs of stabilization. Inventory levels were low, echoing the scarcity seen in previous all-time lows. Despite interest rates hovering around 7%, home prices started to climb once more from March through September. This resilience in the face of high mortgage rates is a testament to the underlying demand for housing.
The Current Landscape: High Rates, Low Inventory
Today, we find ourselves in an interesting predicament. Mortgage rates are flirting with the 8% mark, yet the demand for homes persists, and inventory remains tight. Foreclosure numbers, while on the rise, are still near historic lows, suggesting that the market is not on the brink of collapse.
The Source of Supply: Homeowner Hesitancy
A significant number of homeowners are currently on the sidelines, hesitant to give up their low-interest rates by moving. However, life events continue to drive the need for some to sell, ensuring that homes are still changing hands, albeit not at the frenzied pace of the last few years.
The Demand-Supply Imbalance: A Seller's Advantage
With demand outstripping supply and homeowners sitting on record equity, a mass sell-off driven by financial distress seems unlikely. The market is also witnessing a surge in potential first-time homebuyers. However, the affordability of homes is a challenge due to the prevailing high interest rates, leading to pent-up demand.
Looking Ahead: Predictions for 2024 and Beyond
If interest rates fall—and they are expected to, eventually—we may see a resurgence in home sales. Until that happens, the market could experience a period of stability or a slight increase in home prices for 2024, coupled with lower transaction volumes.
The Opportune Moment: Winter 2023
This winter could present a golden opportunity for those looking to invest in property or considering selling and buying a primary residence. The market conditions suggest that for some, this could be the best time to make a move.
How Can We Assist You?
In a market filled with uncertainty, having the right information and guidance is key. Whether you're looking to buy, sell, or simply explore your options, we're here to provide the insights and assistance you need. Contact us today, and let's navigate the future of real estate together.
Curious about what's happening in your neighborhood? You can create a custom market report to see what's active, under contract, and sold in your neighborhood!
Most new home buyers get sucked into the glamour and excitement of new construction and don’t take the time to do their homework. Too many times new home buyers realize after it’s too late they’re in over their head when buying a new construction home.
In the video above and below I'll discuss the TOP 5 Biggest Mistakes MOST Buyers make when purchasing a New Construction Home.
Currently in the Sacramento Region, about 14% of ALL home purchases are new construction homes. Chances are if you are in the market to purchase a home, you will be drawn to tour one of the many perfectly designed and decorated model homes in the area.
Buying a new home can be a super fun and exciting time but more often than not, Buyers make critical mistakes that can cost them big time!
Mistake # 1:
Assuming builders prices are set in stone. This is Totally False! New Construction Homes are negotiable, just like resale homes. The Builder’s sales reps will try to convince you otherwise, because in reality, They WORK for The BUILDER to make them the MOST money! There are several terms you can leverage when negotiating new construction homes such as downpayment, contingencies, financing, upgrades and others. DO NOT Go into a model home without an expert on your side! Having a great agent that knows the new construction homes can be a big help when it comes to negotiations!
Mistake # 2:
Not Doing Your Research or Due Diligence. This is a Critical Mistake and it can cost you THOUSANDS of dollars, huge headaches and even regret. I think this happens a lot because when people just get started they might stop at a new construction development that they saw online or drove by to ‘check it out’ and they end up falling in love and buying the thing without knowing anything about it other than what the builder’s sales rep tells them… The builder’s sales reps are just that, sales reps that are hired to highlight the POSITIVES. What about the negatives?
Let’s discuss what you should research! I’ll discuss these points in more detail in a follow up video, so make sure to subscribe on my youtube channel to get notified when it comes out, but for now here’s a quick overview-
A few of the biggest things you should research are...
1. Resale Values - what are homes already built in the development selling for on the open market?
2. Costs of upgrades - there are smart and flat out ridiculous upgrades you should never get from a builder. And there are items such as landscaping back yards that almost NEVER come with a new home.
3. Builder Reputation - how often to they meet their timelines, what is their Quality of construction?
4. Schools - Schools can massively impact resale value and where your kids go to school.
5. Special Tax Assesments - Got Mello Roos? These can cost you thousands every year! Know what they are!
A good agent will make research easy because they’ll do it all for you :)
Mistake # 3
Not Using an Agent. I know I’m a little biased, but WOW, around 50% of new construction homes in the Sacramento region are sold without an agent. Having an Agent should be priority #1, it cost’s you NOTHING! Builders want agents to bring them buyers! And for the cost of $0, you get an advocate on YOUR SIDE that will provide expert advice, hopefully great negotiation skills, and a sounding board for upgrade costs, missed deadlines, community advice, resale advice, vendors and the list goes on and on. There may be other developments you have no idea about that may be a good fit for you, so make sure you reach out to a great agent to help!
Mistake # 4
Trusting the builder will meet all timelines and deliver a perfect product. There are a lot of factors that can effect the closing date when buying a new construction home. Typically homes take 4-8 months to complete from ground up and I’ve heard many horror stories of builders delaying closing for months causing a ton of stress and hardship for buyers with homes they’re selling or leases ending and not having a place to live!
Some of the most common issues that cause delays are:
Permits, Weather, Change orders and Community approvals
When it comes to the “perfect product” Were all the upgrades done properly? Make sure you take the time to know the construction manager or foreman and do walkthroughs to check the Quality of work. If you need to make changes or you spot problems these things WILL take time to correct and can delay closing, so adjust your timeline wisely and stay on top of the builder to meet their deadlines!
Mistake # 5
Assuming you need to use the Builder’s lender. Typically builders will offer you some incentives if you use their in house lender but this can COST you more than what you’re getting from the builder in incentives. Shop around, you don’t need to use their financing. Your RE Agent should be able to help provide you with a few lenders in your area so that you know you’re getting the best financing. When in house and outside lenders compete for your business, you win.
Those are the 5 biggest mistakes when buying a new construction home, I hope this helps in your pursuit of finding your perfect home!
Check out this page for info on Builders in the Sacramento Area:
iBuyers are swooping in to buy properties and may not have your best interest, what you should do instead...
You’ve probably seen Opendoor advertisements everywhere! Facebook, Google, even in the mail! They are spending A LOT of money advertising, and it is drawing a lot of attention! You Might Be wondering, is this a scam? How does it even work?
Who is Opendoor?
Opendoor is what we call an iBuyer, or an internet Buyer.
The bottom line?? They are a highly funded real estate investment company, they buy and sell homes for a PROFIT. Opendoor has been around for a few years now, but they just recently came into the Sacramento market in 2018. They have bought and sold over a hundred homes in the Sacramento metro, some for a major discount and profit, several have been a loss. Once they acquire a property they will make a few repairs, usually carpet and paint, put it back on the market for 10% or more than they bought it for and attempt to sell it under their own brokerage. You may have seen their ‘self tour’ homes and blue signs around your neighborhood.
What types of homes will Opendoor buy?
According to their website they only buy single family houses and townhouses, but in some markets they will buy condos and duplexes. I haven’t seen any condo’s or duplexes sold in our market yet by Opendoor but that can certainly change. They apparently DO NOT buy homes over $500,000.
If you have a rental your need to sell...They will NOT buy homes occupied by tenants! It must be owner occupied or vacant. If the home has major damage or is located in a flood plain they will also not purchase the home.
They WILL however buy a home that is listed with a real estate agent. Your agent should be versed in getting offers and negotiating with Opendoor.
How does their offer process work?
In a nutshell, you will fill out a form and answer a few questions about the condition of your home then opendoor will respond within a couple days with an offer for your home close to market value, but typically under the real value by 1-2%. What you will need to be aware of is additional fees they charge, around 8% or sometimes more. Moving forward, if you agree on the price and sign the contract, you will enter an inspection period in which they will have inspectors come out to the home to point out repairs needed and request that repairs be done to the home OR they may add additional fees in order to complete the repairs needed. All of this accounted for, between the lower offer price and additional fees.... you might be selling your home for 10-15% below market. On a positive note however, if you do decide to move forward they can typically close in less than a week or when you decide works for you.
Here is a breakdown of the Pro’s and Con’s of selling to Opendoor:
Pros:
Convenience
No Selling Prep
Quick Sale - Close on your timeline
Cons:
Slightly Under Market Offer
Fees upwards of 8% or more
Additional fees for major and minor repairs needed.
Profit leaves the local market into a large corporation’s pocket.
What should you do before getting an offer from Opendoor or any other cash buyer?
The simple answer is talk to an experienced real estate agent to get a clear understanding of: 1. The value of your home
2. What your home selling goals are
3. What you would expect to net from a traditional on market sale
4. How the agent can help you get offers from other Cash Buyers and investors.
5. How each option compares and which option will accomplish your goals as a Seller.
In Conclusion, Opendoor is not a scam, they are however in the business of making money and not representing your best interests. Your local real estate experts are held to the highest standard, look to them for expert advice and to arm yourself with all your options.
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If you have additional or more specific questions feel free to reach out to us by phone or email, we are always here to help! Our number is 916-500-4410.
Are you thinking of buying your first home but terrified by what it may cost? You might be wondering how much money you need to save up in order to buy a home and What unexpected costs should you expect?
Buyers in today's real estate market have it pretty good, in fact, it can be easier to buy a home then to find a good rental home in the Sacramento California market. There are a lot of misconceptions when it comes to how much money you actually need in order to buy a home. As a first time home buyer you may have heard that you will need to save enough money in order to put 10 to 20 % down but the truth is there are SEVERAL programs such as FHA, VA and even Conventional programs where you only need about 3% down.
Now, if you’re having a hard time coming up with that much, there are several downpayment assistance programs available as well that you may qualify for. I’ll be going over those with a lender partner in an upcoming video so make sure to subscribe to our page or feel free to reach out for details on that.
Something to be aware of is that costs can fluctuate a lot from county to county as well as starter home to luxury home right now, I’m going to go over, step by step, all the costs you may expect for an average starter home in the Sacramento area….
For a round number we’re going to use a purchase price of $300,000
In negotiating the purchase there are ways to adjust terms in the contract to help lower the cash out of pocket at closing. Typically, only experienced agents know how to do this well and it’s usually a give and take situation. For example, a buyer will come up $X on the purchase price if the seller agrees to pay $Y in closing costs.
After successful negotiations, you will hopefully have an accepted contract!
At that time, the 1st check you will be writing is the Earnest $ deposit. The deposit will be made payable to the escrow company that manages all the money for the transaction.
A typical deposit in this price range is $1000. The deposit is a credit toward your funds due at the close of escrow. However, keep in mind, the purpose of the earnest money deposit is to secure the purchase contract... and should you default on the purchase, that money could be at risk.
This is where contingencies come into play! Contingencies protect you from losing that money should you find any issues with the house during inspections such as issues with the appraisal value, if something happens with your ability to obtain financing, you find any problems with the house, or run into issues with financing during your contingency period, you have the ability to pull out of the transaction or renogotiate without losing that money.
With that being said, your next step in a transaction is your due diligence period or time to inspect the property for defects. We recommend that you get a pest AKA termite inspection, home inspection, and roof inspection. Some companies will have packages that cover all of those but you’ll want to make sure to hire a competent home inspector and pest inspector. If the property has a pool or septic it’s always a good idea to get a professional to check those critical systems for you as well.
Inspection costs can range from $100 to $200 for pest and $300 to $600 for home inspection based on size, location and type of foundation.
For our example we will assume it’s a townhome. Townhomes are mostly maintained by and Home Owners Association or HOA that you’ll pay monthly dues for. HOA’s typically cover the roof and exterior structure maintenance so you can have an inspector visualy look at it and if there are issues, get a letter from the HOA stating they will make those repairs. For townhomes and condos termite companies will often do a limited inspection of just the interior for under $100. For our example we'll assume the HOA fee is $350 per month.
More often than not, inspectors will find things that need repair or upgrading. At that point you can re-open negotiations to ask the seller to make repairs or credit $ back for the repairs needed.
Let’s assume for our example that there were a few electrical issues and minor plumbing leaks that needed repair. A good agent can then get an estimate from an electrician and plumber to have those issues corrected and use those estimates as leverage for negotiation. For our example let’s assume it would cost $500 for the repairs and we got the seller to agree to credit $500 toward closing costs.
Within the first week your lender should order an Appraisal to make sure the value is there to secure your mortgage. Traditionally your lender would have you pay that fee directly but today that is typically paid through escrow so you will not have to write a check for that seperately.
Inspections are usually the only thing you’ll need to pay for OUTSIDE of Escrow.
All other closing costs your lender will want to see paid through escrow... you will receive a document from your Escrow company called an Estimated Settlement Statement that line items all closing costs AND credits.
Here’s an example of what the Estimated Settlement Statement looks like so we can discuss what other costs to expect when you buy a home.
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This might look pretty confusing but if you look at the columns at the top, the Credit section is where you will see all funds going toward the purchase, such as your deposit, your mortgage and seller credit.
Now, Debits are items that ADD to your COST such as the purchase price, taxes and fees. At the bottom of this column you can see what the TOTAL COST of the home is, including the closing costs. The total cost in our example was $305,500.
Let’s do a little math to show you how much money is actually needed to buy this home:
If we take the Downpayment of $9000, the difference between the mortgage and purchase price and add up all the other closing costs of $4500, the buyer paid only $13,500 through escrow! This doesn’t include the $500 or so you would expect to pay outside escrow for inspections.
Let’s break down the closing costs so you understand what you’re paying for and why.
Under the Financial Section you can see the purchase price, $300,000 in the Debit column, in the CREDIT column your deposit of $1000 and for the loan product in this example we used a 3% down conventional loan so the mortgage is a credit of $291,000.
Moving down to prorations and adjustments there’s an HOA credit of $50 which might seem odd but down further you’ll see a debit of the entire $350 HOA fee for the month and the credit is prorated because closing is 6 days into the month.
Here you see the seller credit for closing costs of $500 and lastly the county property tax owed for the remainder of the tax year of $352. The tax year runs from July 1st to June 30th and is due in 2 payments in December and February. Most lenders like you to pay through an escrow account which means you’re paying the property taxes with your mortgage payment every month and the lender will pay the taxes when they are due. It’s a REAL good idea to have these tax impounds, that way you won’t have a giant lump sum to pay when the tax bill comes!
The next section breaks down all the 'Lender Charges'. The first line is prepaid interest of $805, and since the rest of the month is paid and your payment is due at the end of the month as interest accrues, the first mortgage payment won’t actually be due for nearly 2 months. Woo Hoo! That’s a relief! The next charge of $525 is a lender fee, called points that get paid to your lender. Then the appraisal fee of $450, Credit report $45, Flood certification $8, Tax service fee $85, and a Condo cert of $247. These fees can fluctuate a lot depending on your lender so keep an eye on those.
Lastly the lender CREDIT of $450 is a discount from the lender offered to help offset the fees.
For the next section, 'Impounds', the property taxes are pre-paid for 5 months to an escrow account ($1520). The reason for this is because the first tax payment due in December is paid in arrears, starting July 1st. The next payment in February pays for the remainder of the year up to June 30th meaning the escrow account needs to be padded to cover the entire year’s taxes, hence the prepayment of taxes.
The next section ‘Title and Escrow Charges’ are fees charged to manage the Escrow and pay Title insurance to ensure a clean transferable title to you and your lender. Each county is different on who pays for these fees, so check with your agent or title company on that. In Sacramento county the seller will traditionally pay title and escrow but it’s a negotiable term. In this example the Escrow fee is paid by the Seller and the Buyer only pays half of the Title insurance $583. For signing loan docs the notary fee is $100, and loan servicing fee is $430.
Lastly, the 'Miscellaneous' section... here you see the HOA Fees were paid for the month ($350).
Another often overlooked but important cost is a one year Home Warranty, most of the time in our area, we can negotiate that the Seller pay for it, however, if you can not come to an agreement with those terms, expect the cost to be around $400 - $850 depending on the size of the home, upgrades or coverage on things like appliances, pool/spa equipment and HVAC systems.
I hope this answers a lot of your questions about the costs of buying a new home!
If you're considering buying a home, give us a call! 916-500-4410
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