Anatomy of a Chico CA Real Estate Transaction
Chico Buyers
5 Reasons to Get Preapproved for A Chico CA Real Estate Home Loan
January 23rd, 2008 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers
A question that is commonly posed to me by Chico Buyers looking for a new home is, “Why do we need to be preapproved for a property?”
Looking for a little approval? by Mike Wiegert, Broker Chico Homes
Many buyers question this common practice and even resent that their Realtor would suggest the necessity of being preapproved. But in the real estate world there are significant reasons that a buyer would want to get preapproved. The bottom line is that even though many of us want to give the benefit of the doubt, people just don’t really trust other people that they don’t know. Having stated this basic premise, here are some important reasons to get preapproved for a mortgage before you make an offer on a home.
1. First and most important is that the preapproval process allows a buyer
to really know what price range he or she should be looking in or what
they realistically can afford. Who wants to make an offer on the home
of your dreams only to be turned down by a lender for reasons such as
insufficient income, poor credit or maybe an inadequate job history. I
promise, you’ll sleep much better if you know what you can afford and
that you can actually get a loan.
2. As a buyer you will be infinitely more comfortable to the Seller if
your offer is accompanied by a preapproval letter from a reputable or well
known lender. This is especially true if you are competing against other offers. If all offers are the same, I can guarantee that the offer that has a preapproval letter attached will be the winner. Also, if the home is offered as a foreclosure by a lender, that lender will probably not even consider your offer if it is not accompanied by a preapproval letter.
3. Preapproved buyers are able to close their escrow more quickly. I recently had a client call me two weeks before her home, which is in foreclosure, was due to go to sale. By the way, if you’re in foreclosure, don’t do this. Foreclosures don’t go away by themselves so call a trusted Realtor or attorney to weigh your options. Luckily, one of my agents had a preapproved buyer interested in purchasing a home in the price range and area of this home. Because of the preapproval, the buyer was able to close the escrow just two days prior to the foreclosure sale. So if you’re in a hurry to get in your new home or you have a Seller that needs to close quickly, being preapproved can really be an asset.
4. Besides minimizing the uneasiness of not knowing if you can qualify, you’ll know what loan programs suit your particular needs. There are literally hundreds of loan programs and a skillful loan agent or broker can really tailor a loan that not only gets you into a new home, but can solve many other financial problems as well.
5. Lastly, your lender will give you a written good faith estimate of closing costs and fees so that you will know exactly what you’re going to need to close your new home. With interest rates well into the fives, it’s not only a great time to buy, but a fantastic time to get yourself preapproved.
Need a recommendation for a reputable Chico lender? I would be happy to assist you!
More on prequalification:
What is the Difference between Prequalification and Preapproval?
Why Should I Get Preapproved for a Chico, CA Home?
Paperwork you need to get approved for a CA Mortgage
Your Chico CA Loan Application- It’s Not THAT Hard!
Lenders beware: How to lose a Chico, CA Realtor (and therefore buyer) in 3 days
| Discussion: 6 Comments »
New Year’s Resolutions: Get Yourself Ready for Your First Chico Real Estate Investment
January 1st, 2008 categories: Anatomy of a Chico CA Real Estate Transaction, Busy Girls Guide, Chico Buyers
Hoping to purchase your first Chico CA home in 2008?
Here are a few items that should be on your New Year’s Resolution list if you want to earn that coveted title: Chico CA HOMEOWNER!!
1. Speak to a local lender. First and foremost, talk to a reputable lender. If you need a recommendation, I would be happy to provide you with a name I respect. A good lender will run a detailed credit history report right away so you know what you have to work with. If the numbers are doable, the lender can then give you an idea of what price range you might be comfortable in searching for a Chico home.
On the other hand, if opportunities to improve your score are available, the lender can offer you suggestions of what to work on, and how soon you might qualify for a more appealing loan package. Read more on the prequalification process:
What is the Difference between Prequalification and Preapproval?
Why Should I Get Preapproved for a Chico, CA Home?
2. Start considering what features in a home are most important to you. Do you need room for 5 dogs to run around? Do you love to cook? Do you need storage space for 50 pairs of shoes? How critical is a garden tub in the master bath? Do you want to be able to walk to the grocery store?
It may seem like putting the cart before the horse, but I would encourage first time home buyers to really put some thought into what home features will fill their individual needs. It’s better to save yourself time trekking in and out of tons of open houses that you won’t end up liking once your common sense kicks in. Try to narrow in on what will actually work for you.
3. Get a feel for neighborhoods and schools. Again, what sort of home will your lifestyle dictate? Do you want your children within walking distance of schools and friends? Or will a 15 minute drive each night to the seclusion of your own acreage be more fulfilling? Do you want to park yourself in between homes full of college kids, just because the house has a “vintage” feel, or would you prefer to be in a more quiet, traditional neighborhood full of working professionals? Whenever I’m researching a new neighborhood, I spend a LOT of time driving around. Consider not only the types and sizes of homes, but the vehicles in the driveway (perhaps on the lawn?), the proximity to local services and your place of business. If possible, talk to the locals! You will find out everything you ever wanted (and more), by simply approach the folks walking around the block.
4. Start packing! You will be grateful when the time comes to actually move that you put in the effort now to start organizing. Clean out those closets, box up unused items in the kitchen and the garage, and prepare yourself mentally to relocate. Get some of that physical work out of the way now and relieve yourself of some intense stress later.
5. Save for that down-payment and good faith deposit. Last, but definitely not least, start saving and planning for your down-payment and closing costs. While there are 100% financing options available, they aren’t always your best bet in the long run. If you can at least come to the table with your closing costs covered, you will be in better shape.
What is a Good Faith Deposit, and Why Do I Need One?
Getting organized, preparing financially, and gaining knowledge about where you will be living will help make choosing your Chico real estate investment as smooth as possible.
Happy house-hunting!
Subscribe to: Chico CA Real Estate Blog and MLS Listings Search!
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 7 Comments »
What is a Good Faith Deposit, and Why Do I Need One?
November 25th, 2007 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico Sellers
I’m always a little surprised when I sit down to write a purchase offer on Chico CA Real Estate for a new buyer, and they don’t have their checkbook with them!
It seems that many buyers don’t know that they are expected to submit a good faith deposit with their offer to purchase a property. I often hear “Oh…. um… JEEZ! I forgot my checkbook!” Unfortunately, in California, a contract must have consideration (a deposit) to be valid.
A good faith deposit is an amount of money that the buyer submits with the offer to show that he or she is acting in good faith and intends to fulfill the terms of their agreement.
The deposit basically says to the seller, “I want your house badly enough, I’m willing to put my money where my mouth is!”
The amount of an acceptable good faith deposit varies widely by region.
In Chico, CA, a good rule of thumb is to offer about 1% of the purchase price for every 30 days in escrow. In other words, if you are offering on a $300,000 home and you are requesting a 60 day escrow, a $6,000 deposit will probably fit the bill. This is a very loose rule, however, and each transaction should be considered carefully. For instance, in a strong buyer’s market, it is likely that a buyer can offer a smaller deposit without too much grumbling from the seller. However, in a competitive situation where the property is bringing in multiple offers, a buyer can help make his offer more appealing by providing a more substantial deposit.
Your good faith deposit is typically held by the broker who is writing the offer for you. If I was acting as your buyer’s agent, I would accept the check on the seller’s behalf. Chico Homes would then hold it in a separately maintained trust account until your offer was accepted by the seller. Within 3 days of acceptance, the deposit is required to be deposited with the title company that will be handling the escrow. Your check should always be made out to the title company, not the agent you are working with, or the company where they are employed!
The seller is only entitled to keep your good faith deposit in the event that you, the buyer default on the contract.
It is important that you are very clear as to the terms you are agreeing to. If the contract says you have 17 days to complete your investigations, and you decide on day 25 that you no longer want the property because the house next door has barking dogs, you may sacrifice your deposit! Be sure to work with your trusted Realtor to adhere to the terms and timelines specified in the contract.
If the transaction proceeds without issues, the deposit is typically applied to the closing costs the buyer will incur during the escrow. In the event that both buyer and seller agree to terminate the contract, the buyer can receive his deposit back minus any inspection costs that he may have agreed to.
Have more questions? I’m happy to answer them! Sandi 530-864-5407
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 10 Comments »
Foreclosures: What you should know BEFORE you make an offer, Part 3
November 18th, 2007 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 3 in a series of helpful hints to purchasing foreclosures in Chico, CA.
Did you miss parts 1 and 2? Read here!
Foreclosures: What you should know BEFORE you make an offer, Part 1
Foreclosures: What you should know BEFORE you make an offer, Part 2
Chico CA real estate buyers and investors LOVE foreclosures.
The problem is, there aren’t that many to go around! Many areas of California have experienced a high influx of foreclosures thanks to the recent mortgage meltdown. Chico, CA however has fared a little better in terms of relative numbers of repossessions.
Chico CA buyers are competing to snatch up the bank-owned (REO) property when it DOES come along. It’s important to remember, however, that purchasing an REO property can be quite a bit different than a traditional Chico CA real estate purchase.
Before offering on a Chico, CA REO property, you should know:
1. It’s important to have a preapproval letter from your lender. Most of the banks I’ve dealt with require that the preapproval be submitted with your initial purchase offer. Without it, they won’t waste their time reviewing your paperwork. While this makes good sense anytime you are offering on a property, it’s critical for an REO listing.
2. The bank also wants to prequalify you themselves.
They want to see the letter from your preferred lender, but they won’t necessarily trust it! Oftentimes, you will be required to fill out their credit application just so they can verify that you do indeed qualify for the loan amount, or are otherwise financially stable. Although they would be happy to process your loan, you are still pursue a loan through the lender of your choice.
3. The bank is picky when it comes to title companies.
Typically, a buyer has some say about which title company they prefer, and even which officer they would like to work with. The bank really doesn’t care if your friend Sue is the best title officer in the county and her office is only 2 blocks from your new house. Most of the time, they already have a title company and officer designated, and the point is non-negotiable. The best part? The title company is usually out of the area, and unfamiliar with local practices.
Like what you’re reading?
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Still want to be part of the foreclosure frenzy taking place in Chico CA real estate? Contact me, and I will work to find you the perfect Chico REO property for your needs.
Sandi Bauman, Chico CA Realtor: 530-864-5407.
Related reads:
Short escrow? Get your ducks in a row BEFORE you make an offer.
What is the Difference between Prequalification and Preapproval?
Why Should I Get Preapproved for a Chico, CA Home?
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 4 Comments »
Foreclosures: What you should know BEFORE you make an offer, Part 2
November 16th, 2007 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 2 in a series of helpful hints to purchasing foreclosures in Chico, CA.
Did you miss part 1? Read here.
Bank-owned property (REO) is some of the most sought-after Chico CA real estate of all time. In a market where many buyers are sitting on the fence waiting for the bottom to fall out, savvy investors are picking up REO‘s as fast as Chico Realtors can churn them out!
It is important, should you be considering purchasing a bank-owned (REO) listing, that you understand up front what exactly you’re getting yourself into. For the uninitiated, a look into the world of REO can be quite surprising. (In case you’re wondering, I don’t necessarily mean that in a good way.)
Before offering on a Chico, CA REO property, you should know:
1. Most REO property won’t leave you feeling all warm and fuzzy.
First time home-buyers are often gleeful when they get their first look at the home they will eventually buy. “It’s just so CUTE!” they declare. They oooh and aaah over the carefully groomed, staged and scented home visualizing Thanksgiving Dinners and Christmas trees.
REO property often takes a little more imagination. You have to try to pretend that the yard is not dead, the house isn’t lime green, the walls don’t have holes in them, the kitchen appliances and fixtures are actually there, and the flooring isn’t all torn up. That is, if you can get past the unbelievable stench and filth of lives gone horribly wrong.
To be fair, there are nice, clean Chico REO properties to be had- there are. But oftentimes, an REO house is one that shows evidence of severe neglect and outright abuse on the part of an angry or desperate previous owner.
2. Don’t expect the bank to pretty it all up for you!
The banks usually prefer to sell “as is.” Minimally, they will do an initial “trash out” to remove the belongings left in or on the property. In addition, they will re-key, board up windows, and winterize. It is unlikely that measures will be taken to add appeal- if the sinks, lights, appliances and windows are missing, they are likely to stay that way. Exception: if the buyer’s lender requires a repair (or 10) to fund the loan, the bank may negotiate the cost of the repairs. In a competitive REO market, however, they won’t need to do any repairs- a cash buyer will snatch it right up in it’s current condition.
3. The bank won’t tell you what’s wrong with the house, because they don’t know.
A traditional seller is required to provide you with a laundry list of everything they know to be wrong with the property. In the case of an REO property, the seller has never even seen the property, let alone lived in it. The bank has no idea if the handrail is loose, if there are barking dogs next door, or if meth was manufactured in the second bedroom. Make sure that you do any inspections necessary to ensure that you have a good grasp on the condition of the property- very little information will be provided to you by the seller.
Coming soon! What you should know BEFORE you make an offer, Part 3.
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By the way, if you like the yellow house in the picture…. it can be yours for ONLY $79,900! That is $55,000 less than any other stick built home in Paradise CA!!
Give me a call right away 530-864-5407– it’ll be gone quick.
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 6 Comments »
Foreclosures: What you should know BEFORE you make an offer, Part 1
November 12th, 2007 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 1 in a series of helpful hints to purchasing foreclosures in Chico, CA.
“Foreclosure” sees to be the new buzzword around Chico, CA these days. Everyone wants to score that awesome Chico CA real estate deal, and people are looking to the foreclosures in Chico to make it happen. In truth, most people are actually wanting “REO” property. In other words… the bank now holds the title.
The process of purchasing an REO property can be significantly different than your average residential purchase. Not always, of course, but often enough that you should know ahead of time what you might run into.
Before offering on a Chico, CA REO property, you should know:
1. Not all REO’s are phenomenal deals!
Just because the listing agent labels it “foreclosure!” doesn’t mean that it is a steal. I work with a least one bank that takes the appraisal price and ups it by 5% to arrive at the asking price. Make sure that you are working with a competent Chico Realtor who can help you ascertain whether or not the property is priced competitively.
2 . The bank has no emotional ties to the property.
Unlike a typical homeowner, the bank is emotionally detached during the negotiating process- it’s completely impersonal. Truly, your offer is just one of many files sitting in a pile on somebody’s desk. The strategies that might help you score in a traditional transaction are unlikely to work with a bank employee located in Texas. They have a specific set of rules and time-lines to follow, and little else matters to them.
3. The bank operates on their schedule, not yours.
“Time is of the essence” in a typical transaction. If, as a buyer, you allow the seller 3 days to respond to your offer, they will usually respond as quickly as possible in order to facilitate the transaction. A bank may respond in an hour, or it make take several weeks to get an answer! Don’t make the mistake of thinking the bank isn’t considering your offer- sometimes the contract has to be approved by a series of 5 or 6 people at the company before you get the good news. Conversely, I’ve found that once an offer is approved, the bank will steamroll over anybody or anything that gets in the way of closing the deal on time. Usually, they want to close within the same month the contract is approved!
Coming soon! What you should know BEFORE you make an offer, Part 2.
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Have specific questions on the foreclosure process? I’m glad to help, whether you are a seller facing foreclosure, or a buyer looking to purchase. Give me a call! 530-864-5407.
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 8 Comments »
Short escrow? Get your ducks in a row BEFORE you make an offer.
November 2nd, 2007 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Real Estate News, Chico Sellers, My Opinion on Things
There is no disputing the fact that Chico, CA is currently in what is commonly known as a “Buyer’s Market.”
That is FABULOUS news for all the buyers out there who have patiently been waiting for this day. The inventory is high, the prices have dropped, and the interest rates are still phenomenal!
Now is the time to get a great deal! 
A “Buyer’s Market” is a wonderful thing. A Chico, CA home that might have cost $400,000 in 2005 may only set you back $350,000 today. On average, prices seem to have corrected between 10 and 15 percent for residential properties.
I have noticed a growing trend with buyers. In an effort to get the absolute lowest price on a property, they attempt to entice the sellers with a very short escrow period. For some sellers, a quick sale in this market is a dream come true! They need out from under that house payment, and will gladly accept less than asking price just to be DONE.
However, when representing a seller, I have had to caution against signing the first contract we see, simply because the buyer promises to make it the pain go away with a 10 day escrow. The offer to close in 10 days is an empty one if the buyer has not done his homework.
The following items must be taken into consideration to close an escrow quickly:
- Is the buyer preapproved?
- Is the lender local and knowledgeable about our issues and resources?
- Is the lender willing to commit to closing on time?
- What kind of loan product is the buyer applying for? A VA loan, for instance, is highly unlikely to close in less than 30 days.
- What inspections does the buyer request? Well potability tests may require 14 days or more to obtain results.
- Can we get the appraisal completed immediately?
- Will repairs be required by the lender to fund the loan? If so, is there a contractor available to bid, complete, and final the work within a days notice?
An escrow that closes quickly can be a wonderful solution for both the buyer and the seller, but it doesn’t happen without forethought, preparation, and a willingness for all parties to be focused on immediate results.
If you are a buyer, hoping to get the best deal of the year by offering to close quickly, get your ducks in a row BEFORE you make an offer. No seller in their right mind will accept your offer if you aren’t prepared to close the deal.
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Shopping for Chico foreclosure property? Give me a call- I’m currently working with several REO departments on bank-owned Chico property. Sandi Bauman 530-864-5407
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 6 Comments »
How to Hire a Chico, CA Realtor and Make More Money!
September 16th, 2007 categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico Sellers
It’s often fascinating to hear how people go about hiring a Chico, CA Realtor to represent them in the sale or purchase of a home. More often than not, I hear things like:
“Jeff has those big bulletin boards all over town- he must be REALLY successful!”
“Ann is our next door neighbor.”
“Bill is my co-workers son. He just got his license, and we thought we’d help him out.”
“Julie always has her picture in those real estate magazines, she must sell a lot of homes!”
Yikes!
A real estate investment is arguably one of the biggest, most costly financial decisions a person will make in their lifetime.
As such, it is critical to choose carefully the professional that will be guiding you through the complex transaction. As nice as it would be to give “Bill” an opportunity to learn the trade, are you willing to put your financial security on the line for him? “Ann” might be the best neighbor in the world, but the worst Realtor in town! One of the biggest mistakes I see people making when hiring a Realtor is ASSUMING that an agent is a top producer, simply because he or she is good at advertising. In truth, the agent might not have sold anything all year!
Ideally, you will find yourself a competent, proven professional who is knowledgeable about the industry, the local Chico, CA market, and your needs as a consumer. By doing so, you will make more money!
“How do I go about hiring the right Realtor?” you might ask.
I suggest that you conduct a minimum of 3 interviews with agents you are considering to represent you. That’s right– INTERVIEWS! Ask the tough questions, and take notes on the answers. Compare the experience, professionalism, and general attitude of each agent.
Here is a great list to get you started:
1. Are you a FULL time Realtor?
(IMHO you can find VERY good part timers… you should just know up front who you’re hiring.)
2. What is your total sales volume this year?
(Consider that an average Chico, CA house is around $350,000).
3. How many transaction sides have you closed this year?
(The top 20 producers in Chico, CA will close an average of 30 per year).
4. How do you rank in your company?
5. What price range does your typical listing fall under?
(If your house is worth $1 mill, you don’t want to hire a $200k agent!)
6. How do you rank in comparison to the other 400+ Realtors in the Chico MLS area?
7. Do you have a personal web site or blog site?
8. Tell me about your Internet marketing programs.
(Do you understand and cater to the 92% of buyers that utilize the Internet?)
9. Tell me about your traditional marketing methods.
10. Are you currently active in your local Board of Realtors?
(Do you keep yourself current on local issues and network with other Top Producers?)
11. Do you offer Exclusive Buyer Agency?
(Will you explain all levels of agency representation, how they apply, and how affect me?)
12. What real estate specialty designations have you received or are you pursuing?
(Do you find continuing education to be valuable?)
13. Before we agree to work together will you do a ‘listening presentation’ so you can learn about all of my ‘wants’?
14. Are you equipped with the newest tools of the trade?
(the latest in software such as Relay, smart phones, scanners … all of those high-tech things that will help you be an industry leader?)
15. Do you have systems in place to insure that you contact me regularly with useful information?
(Will you continue your relationship with me even when I am not buying or selling real estate?)
16. What percentage of your business comes from referrals and how important is this for you?
(In other words, how much time do you spend prospecting versus working on finding me a home?)
17. What sets you apart from all of the other Chico, CA Realtors that I know??
It stands to reason that a top producing agent has a certain level of proven skill, knowledge, and ability to work with people, all of which are crucial elements to getting you the most money possible from your sale or purchase. Your job, as a consumer, is to be aware and responsible for whom you are hiring to represent you. After all, you are the one who will inevitably suffer in the long run!
One last bit of advice: you need to genuinely like the person you hire! Throughout the course of a transaction, you may spend a considerable amount of time with your Chico, California Realtor. Make sure that you are comfortable communicating with the individual, and that you feel he or she truly has your best interests at heart. Many are great sales persons, but lack the personal connections that are critical.
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected]. Specializing in REO, residential, relocation, investment & ag property.
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