Wednesday, January 30, 2013

Feng Shui Decorating

Feng Shui is a metaphysical design concept which originated in China thousands of years ago. When feng shui is used effectively, your home and life will be characterized by harmony and balance. The foundation of positive feng sui design begins with the understanding of the feng shui bagua map. Once you understand how this map corresponds with the layout of your home in terms of particular life aspects and natural elements., the sooner you can begin decorating with feng shui flair.

Simple Steps to Feng Shui Decorating
  1. Feng Shui Bagua Map. The first step to incorporating feng shui decorating into your home is to have a basic understanding of the feng shui bagua map. Print out a map that corresponds with your home's foundational layout and you can work from there. You will also want to print a copy of an elements map, which can help with choosing the right colors and textures for decorating with an eye on balancing the elements.
  2. Light. Another key element in good feng shui is light. Light is energy so it is important that all of the rooms in your house are well lit in order to keep your interior space infused with energy. Overlighting or underlighting can create blockages and bad energy. Energy efficient full-spectrum light bulbs are the ideal lighting source if natural light isn't available. Crystals can also be used to help bring light into a space, or diffuse light into an area in which light sources are limited.
  3. Clean and declutter. Dirt, filth, and clutter are the enemy of good feng shui. In the tradition of feng shui, you can only be balanced in a clean and organized environment. Do all you can to keep clutter out of your living space. Buy organizers, build shelves, and train family members to pick up after themselves.
  4. Flow. It is important that energy - or chi, to be specific to feng shui vocabulary - can flow freely through your home. Furniture should be arranged in a way that doesn't obstruct or block the flow. So take a look at your furniture arrangement and see if there are areas that form obstructions or barriers. Rearrange to find a way that energy can flow freely while maintaining comfortable and cozy areas for relaxing or entertaining. Remember that windows, or doors that are directly opposite one another, can be a way for energy to be sucked out of the home. Placing a round table or a plant along the pathway can serve to slow down energy enough to allow it time to nourish your interior space.
  5. Colors, mirrors, and other features. Each of the elements - fire, water, metal, earth, wood - have specific colors and sentiments attached to them. Once you learn these, you can work with ways to decorate your home while balancing these elements and qualities.
So whether there's anything to it, that's really up to you as a matter of faith... but getting your home organized with nice light and decluttering is never a bad thing! Do you have any experience with feng shui? Let us know in the comments!

Monday, January 28, 2013

A Quick Guide to Credit Repair

If you have a credit score at room temperature, good credit may seem like an impossibility. However, repairing your credit is especially important if you are looking to buy a home. Hopefully, the era of predatory lending is over but unfortunately the recent housing collapse has forced lenders to tighten the reins in terms of who they approve for mortgages. By improving your credit score, you will be more likely to qualify for a mortgage and benefit from the lowest interest rates available.

Simple Steps to Repairing Your Credit
  1. Print a report. Remove your hands from in front of your eyes, take a deep breath, and print a FREE copy of your credit report. Then get in the habit of viewing your report every four months to make sure it is accurate. Each of the three major credit bureaus is required to provide you with one free report per year:
    If you see anything that is inaccurate, you can proceed via the credit bureau's instructions to report it and begin working to remove it. Also, remember that credit bureaus are not the enemy. They are simply the middleperson. They know nothing about your accounts or history, only what is reported to them by various creditors.
  2. Payment Plans. Did you know payment history is the number one contributing factor to your overall credit score? You may be surprised how willing creditors are when it comes to working out a payment plan. Rather than missing payments, which will constantly ding your credit report, try to work with all of your creditors to arrange payments you can afford on time.
  3. Automatic Debits.  If you usually have the money but often forget to make them, start going online to set up automatic debits. You can log in to the creditor's website and add your checking account or you can use online banking to set up recurring payments. Either way, this can help to get you back on track and make sure your payments are made consistently from here on out.
  4. Secured Credit Card. No credit can be as equally detrimental as bad credit in the eyes of prospective lenders. Or, if your debt was so heinous you cut up all your cards in a fit of frustration, it's time to obtain a secured credit card. Ask your bank if they offer one. These cards require a "deposit" which is used as your credit line for a certain term. Once you have established a regular payment routine, the bank will refund your deposit amount and begin to increase your credit line, which then boosts your credit score. You are often able to "upgrade" to an unsecured card at this point.
  5. Don't cancel old cards. If you haven't canceled your old cards, that's a good thing. Length of credit history is important. If you want to eliminate cards, cancel new cards and keep the old ones active as you pay them down.
Repairing your credit is definitely a one-step-at-a-time process, but once you have good credit again, your diligent efforts will be worth it.

Friday, January 25, 2013

Fire Safety Tips for Your Home

Did you know fires kill as many as 2,500 people per year, and injure approximately 12,600 annually? Fortunately, fire related deaths and injuries can be prevented! Two of the most important things you can do to prevent becoming an fire statistic is understand the risks, and create a clear plan of action to be rehearsed by your family bi-annually. The more you are prepared to confront the reality of a house fire, the more likely you and your family are to escape quickly and safely.

Be Prepared for a House Fire and Then Help to Spread the Word

The following information was gleaned from's Home Fires page. We recommend spending more time reading their detailed information and instructions in order to be as Fire Ready as possible. Are you a member of Neighborhood Watch or an alternative community safety group? Consider spreading the news to friends and neighbors by participating in FEMA's Pledge to Prepare program.
  1. Understand the Basics. Many people assume escaping a fire is simply a matter of hearing a fire alarm, or seeing flashy orange flames, and then getting out. Unfortunately, it's not that simple. Fire is:
    • Fast
    • Hot
    • Dark
    • Deadly
    These are the poignant words used to remind people it only takes about 30 seconds for a small fire to get out of hand. The hot smokey air is usually more deadly than the flames themselves. Simply breathing scorched air can be fatal. Rather than the bright flames people anticipate, fire is usually covered by black, dark, smoke which makes it difficult to see and breathe.
  2. Fire Escape Plan. Make sure your family has a solid "Fire Escape Plan" in place. This should include things like:
    • Establishing a primary route out of each room
    • Coming up with a secondary plan in case rooms/exits are blocked by fire
    • Purchasing fire escape equipment which has been safety tested by a reputable third-party agency, such as UL (Underwriter Labs).
    • Ensuring windows open freely and screens are easily popped out, even by young children
    • That everyone can escape by feel - with eyes shut - in case the smoke is so thick it prevents clear vision
    • Make sure all security bars have a quick release option and that every family member knows how to operate it
    • Prepare children for firefighters in full uniform and/or masks. They can often look scary so children need to learn firefighters are there to help and to approach them without fear.
    By practicing your fire escape plan two times a year, your family is much more likely to remember what to do, especially as everyone's roles will change as children grow older and larger.
  3. Install smoke alarms. There should be a smoke alarm located in every bedroom, the hallways outside of sleeping areas, and on each level of your home. Test the alarms monthly and change the batteries twice a year to ensure alarms will function properly in case of a fire. Never disable a fire alarm while cooking.
These three simple tasks may end up saving the life of you or someone you love. Click Here for information on preventing house fires.

Wednesday, January 23, 2013

Are You in the Market for a Specialty Mortgage?

When it comes to mortgages, there are traditional loans and non-traditional loans - also called specialty mortgages. These mortgages are used for situations such as remodeling, buying a second home while you still owe money on your first, and other real estate scenarios which don't fall into the traditional mortgage categories.

Here's a quick overview of some specialty mortgage loan types which may be of benefit to you at some point in your real estate career.

Five Specialty Mortgage Loans
  1. Piggyback Mortgage Loans. These loans are sometimes called combo loans. They're a way for home buyers to save a little money by avoiding private mortgage insurance (PMI) fees. PMI is required by mortgage companies when home buyers put less than 20% down on their home. By getting two smaller traditional loans, buyers have a first and second mortgage, and get out of paying for PMI.
  2. Streamlined K-Mortgage Loans. This is a loan offered by the Federal Housing Administration (FHA). It's available to qualifying home owners who need to update or remodel their home. While the HUD's 203K program helps people qualify to buy fixer-uppers and renovate them, the Streamlined K-Mortgage Loans assist current homeowners in obtaining loans to rehabilitate their home. There are "price restrictions" so to speak on how much money can be spent on particular repairs and updates but the loans are an affordable way for middle- to low-income earners to make valuable improvements and all of the funds are included in one loan.
  3. Bridge Loans. Are you relocating, or wanting to purchase a new home but you haven't sold your old home yet? You may be the perfect candidate for a Bridge Loan, also called a Swing Loan. These loans are created to act as financial "bridges", allowing home buyers to continue making the mortgage on their old home while beginning to pay the mortgage on their new home. They can also be used to finance a down payment for the new home. In most cases, the loan terms are between two weeks and three years. The equity from your old home is used as collateral for the loan. Once your old home is sold, the bridge loan is repaid.

  4. Equity Mortgage Loans. If your house has accrued equity, you can usually qualify for a loan in order to gain access to a certain percentage of those funds. Your house becomes the lender's collateral and you get a check and begin paying the loan back. In many cases, these loans are an affordable way to remodel your home, put children through college, etc.

  5.  Reverse Mortgage Loans. These are available to home owners 62-years and older who have significant equity in a home. There are fees involved, of course, but ultimately the lender pays the borrower money every month or in a lump sum. The borrower maintains the title to the house. The loan is repaid when the house is sold.
Now it's up to you to put your newfound specialty mortgage information to good use. You never know when you might need it.

Monday, January 21, 2013

One Size Doesn't Fit All! Types of Mortgages

Unless you're planning to pay cash for a home, you will need to apply for a loan. Once your offer is approved and it's time to apply for the loan, it's a good idea to have a basic understanding of traditional mortgage options. There are all different types of loans so it is important that your mortgage broker works with you to select a loan that will keep your mortgage payment as affordable as possible.

Here is a list of some of the more common loans available to you.

Basic Types of Mortgage Loans

FHA Loans. FHA stands for "Federal Housing Administration," so yes - FHA Loans are backed by the government. They are also one of the most popular and common mortgage options for first time home buyers because there are minimal down payment requirements and your FICO score (your credit score) is less of an issue. They are also beneficial when buying a fixer-upper and for senior citizens.

Fixed-rate. In the "old days," this was one of your only mortgage loan options. In many cases, this is also the best and least risky mortgage option if you aren't a first-time home buyer. With these loans, your loan amount is based on current interest rates and those rates are locked in for the life of your loan. These are an ideal option in the current housing market since interest rates are still low. Should a homeowner wind up with a high interest rate, a good credit history will allow him/her to refinance the loan in the future when rates go back down. In the meantime, you can deduct the interest-portion of your mortgage payments on your annual income taxes.

Veteran's Administration (VA) Loan. If you're a military veteran, or a surviving spouse of a veteran, you probably qualify for a VA Loan. Similar to FHA loans, they are backed by the US Government, require minimal to no down payment and will provide low interest rates. They can also be used to adapt your home in anyway necessary to accommodate special needs, or to fix-up an old or run-down home.

Adjustable Rate Mortgages (ARM). Tread cautiously with these. They became very popular during the previous decade's real estate boom - especially amongst the arena of predatory lenders. The idea is that a low-interest payment now will create an enticingly affordable monthly mortgage. The problem is that when interest rates go up, so do your mortgage payments and the increase can be alarmingly steep. These mortgages created a large percentage of new home owners who now have a foreclosure on their credit report.

Interest-only Loans. Another "buyer beware" mortgage option is the interest-only loan. The initial payments are awesome because they are super-low and very attractive. However, at the end of a given period you will begin paying the "real" mortgage amount or will have to supply a balloon payment to pay-off the loan.

Hopefully this information will help you to make an educated choice about the loan-type which is best for you and your family. Happy house hunting!

Friday, January 18, 2013

Baby Proofing Your Home

For most of us, home is a kind of sanctuary - a respite from the dangers of the outside world. Then we become parents. All of a sudden, danger is lurking around every corner. You used to love your sunken living room - now those stairs conjure images of tumbling toddlers. Remember how proud you were of the new Pottery Barn coffee table? Now all you see are endless hard edges and corners just waiting to make contact with your precious baby's body. We won't even mention the word "electrical outlets."

Childproofing your home is actually pretty easy to do. We recommend that you begin early, rather than waiting for your child's accidents to prompt the safety proofing. Little ones can jump from one mobile stage to the next (sometimes literally) in the time it takes to fold one more pair of jeans.

Must-have Childproofing Products for New Parents
  1. Baby Gates. Take a look around and list the baby gates you will need to prevent future accidents. All stairways should have their own gate. Install them when you see your baby first begin to scoot so you are adept at operating them one-handed once they're truly necessary. We learned not to skimp on this one - after breaking our third low-priced gate, we regretted not springing for the higher dollar gates from the get go!
  2. Electrical Outlet Covers. Once your baby is born, you will want to cover every exposed electrical outlet with covers and keep cords out of their reach. Babies just love to fiddle with these things until they can be removed so we suggest buying the heavy-duty models which require you to push a "magic" button or lever before it can be taken out. They'll eventually figure that out too, but there is only so much one can do.
  3. Corner Covers. There are multiple sizes, shapes, and colors of padding which can be stuck to the corners of coffee tables, entertainment centers, end tables, and any other hard surface which is right at baby's, "I'm learning to crawl/pull myself up/walk" head and face height. Your child will still obtain his/her fair share of bumps and bruises along the way but these pads work to mitigate the more severe varieties of baby boo boos.
  4. Cabinet door latches. There are multiple versions of these and they are essential unless you plan to spend your child's entire toddler-hood guarding cabinets, saying "NO!" 100 times per hour, and learning the names for the entire volunteer staff of the poison control center. It only takes the first 300 or so times of using them before you learn to open your own cabinets without thinking about it.
  5. Door Knob Covers. These are about as adult proof as they are baby proof but while you keep your sweet angel from entering rooms s/he isn't supposed to, you will also acquire finger, hand, and wrist agility you never knew you had.
These five items will help to get you started along your baby proofing path. And just remember, this too shall pass...

Tuesday, January 15, 2013

Don't Skip the Home Inspection!

If you haven't watched an episode of HGTV's Holmes Inspection, we highly recommend you do. Any questions you have about home inspections and why they are important will be answered. The show always includes a home buyer who didn't get a good inspection, or (unbelievably) skipped the home inspection altogether. Unfortunately, this major mistake on their part has resulted in major issues which cost tens of thousands of dollars to repair. Enter Michael Holmes, licensed building contractor extraordinaire; he comes in, gives them a sound lecture, and then fixes everything for them using the most up-to-date building methods/materials.

While you probably won't be as lucky as the Holmes Inspection home owners, to have a famous TV show pay for all of your repairs, prioritizing your home inspection is a key element when buying a new home. A home inspection ensures that the major infrastructure of the house is intact and will identify any major - and minor - repairs which you might want the owners to take care of before the purchase.

A Qualified Home Inspection is Part of a Smart Home Purchase - Don't Skip It!

Hire a licensed and experienced contractor

It's so awesome that your cousin has built three homes of this own without ever having a construction license. It's equally awesome he's willing to do your home inspection for free. But when it comes to spending hundreds of thousands of dollars on a home, which may have thousands of dollars-worth of "invisible" damage/construction errors, you need a licensed and experienced professional to take a look for you. Many professional home inspection companies offer limited warranties on inspections, which gives you 90-days or so for your cousin to locate any defects which were missed.

Don't just go with the cheapest bid. Spending a small(ish) amount now is the difference between walking away or being stuck with a Money Pit.

Is the home up to code?

In addition to major construction issues, like a roof that's about to cave in or shoddy electrical wiring, your home inspector is going to be looking at little nitty-gritty details you would never have even thought about such as:
  • HVAC wear-and-tear
  • Potential pest damage
  • Chimney status
  • Pool leaks/cracks
  • Siding/windows/seals
  • Foundation/basement cracks or improper slopes
  • Presence of harmful chemicals/materials
Are there health risks?

The last bullet point is key - without a home inspector who knows what s/he is doing, you could purchase a home with outdated asbestos infested flooring or insulation. There may be lead paint on the window sills you caught your toddler cheerfully chewing on when you toured the home. NOW is the time to locate and remedy these issues.

Honor the Inspection Results

Getting a poor report back from your home inspector isn't the end of the dream. You can negotiate with buyers as to what repairs they will make beforehand, and/or a price reduction which will allow you to make the repairs after you home is purchased. At the end of the day, you want to feel 100% satisfied with your new home purchase and a professional home inspection is one way to make sure that's the case.

Saturday, January 12, 2013

How NOT to Sell A House

Your agent calls, the first prospective buyers are on their way. Yes! They open the door, step into the foyer and their noses begin to crinkle. The husband whispers, "what's that smell?" and then they silently begin to tour the house with their hands inside their pockets. Sure, you knew there was a bit of a musty smell in the air from time to time. But what do people expect? C'mon!

Reasons People Won't Want to Buy Your House

Wrong. Actually, unpleasant odors are a major turn off for buyers. There is a plethora of articles out there on ways to help sell your house, such as improving curb appeal or tips to stage your home. But sometimes it's a good idea to learn what not to do since a staged home that smells like mildew isn't a good idea either. Keep these items in mind as you prepare your home for its upcoming sale.

What's that smell?

The only odor people want to smell when they're touring a home is fresh baked cookies or a clean, mild, neutral scents. Wet dog, cigarette smoke, a hint of mildew, and Eau de Kitty Litter are not very inspiring. Sometimes we get so used to living with our own home's scents, we don't realize they might be off-putting to others. Ask a friend or family member who doesn't live with you to give an honest assessment and then take action if they notice an odor. If you're a smoker, you will probably have to replace the carpeting/pads and repaint walls at the bare minimum and then keep your smoking outside until you move.

Pets Galore

Is this a residence or a pet shop? We all love our pets, but some of us love more pets than others. If you're a multi-pet person, it's a good idea to crate them and remove them when the house is being shown. A dog or cat here and there is usually okay, but when three St. Bernards, four cats, and two parrots greet potential buyers they imagine a lifetime of excrement tainted carpeting - and that doesn't feel like home.

Cleanliness is next to...

Buyers want to walk into a clean home. End of story. You might think they can imagine the place cleaned up. They can't. Or they don't want to. Ew. They don't want to buy something caked in others' dirt and grime. Bathrooms and kitchens are some of the worst offenders. Do your best to clean it up.

Out of sight, Out of mind

Believe it or not, no matter how cheerful, friendly, or supportive you are about your house, buyers don't usually want to see you. They want to imagine the house is theirs, and that's difficult to do if you are standing around or worse - following them as they tour the house. Try to be elsewhere so buyers can view your home objectively and imagine it being theirs.

Paying attention to the "Dos and Don'ts" of real estate sales will help your home sell as quickly as possible.

Thursday, January 10, 2013

Identifying Over-Priced Homes

Until you become more accustomed to the real estate market in your area of interest, it can be tricky to determine if a home is accurately priced or not. This is especially true when you know you're in a bidding war and need to make the most sensible - yet competitive - offer.

The following is a list of clues which indicate the house you are interested in may be overpriced.

5 Signs of an Overpriced Home
  1. True Love. Sometimes the owners of a home have so much emotional investment, they can't imagine their home only being worth $XXX,000 dollars. Being overly sentimental about a piece of property will cause perfectly logical people to plug their ears and sing La-La-La while their real estate agent attempts to give them sound pricing advice. If you come across one of these, you are best to leave it alone for a while until the owners are forced to concede and lower the price.
  2. The Neighborhood Star. Sure - all of the existing comps in the area come in about $25K less than the home you're looking at, but the owners insist their house is way better than those. What they don't realize is that while upgrades can improve the value of a home to a point - the value will be somewhat regulated by similar houses in the market - even if they don't have granite countertops. Your best bet is to have an idea of what the "Sold" prices are, rather than the "For Sale" prices - these are the true indicators of realistic housing prices.
  3. Playboy Mansionette. You'll know when you're touring a Playboy Mansionette - the master bedroom has a built-in wet bar, the living room has motion sensitive multi-colored lighting which coordinates to the "Now Playing" soundtrack, and the dining room wall has an inset living reef (which can't be moved) worth $XX,000 on the underground tropical fish market. Unfortunately as mentioned above, upgrades only bump home values by so much - and extra-super-custom upgrades don't increase a home's value by much because they're so personal they actually become house selling hazards.
  4. 457 Days and Counting. If you notice a home has been on the market for days, and weeks, and months, and years, it's either way overpriced or is in hideous condition. It may be worth a look just in case but odds are you will want to set your sights elsewhere. This buyer is hoping "just the right buyer" will come along. But if they haven't come along in six-months or more, they aren't coming. Ever.
  5. You're the First! "Wow! It's so great to finally have someone look at the house! It's been on the market for weeks...". If those are the words that greet you at the door, you're about to tour an overpriced home. However, this could work in your favor since an actual offer might be so exciting the sellers might instantaneously accept.
There's nothing wrong with viewing an overpriced home of your dreams, just make sure you take enough time to choose the right house for the right price.

Wednesday, January 9, 2013

New Photos of Pacific Place

Haven't had a chance to visit our sales office yet? You might want to after you see some of these new pictures of Pacific Place! Come on by!

Tuesday, January 8, 2013

The Pros and Cons of Buying and Owning a Timeshare.

If you've ever stayed at a timeshare, or attended an "Information Meeting" as a means of getting free stuff - then you understand the allure. There are more than 1,548 timeshare resorts in the United States alone. Timeshares offer a comfortable way to travel - especially for families - as they usually come equipped with kitchen facilities and a resort-like feel. However, like everything in life - there are two sides to every story.

For every timeshare owner who loves their property (and hands out "Free points" to family and friends like candy), there is another who will tell you how they were burned by their timeshare experience. First, a little on how most timeshares work: you pay a lump sum up front - which varies according to the type of resort you are buying into and the length of time per year - and are responsible for annual maintenance fees.This allows you to stay and average of one to two weeks per year.

Pros and Cons of Timeshare Ownership

One thing we should note is that as the process has evolved with time, most timeshare companies now operate on a point system. So, rather than owning a particular share in a specific facility, you own "Points" which can be used at any facility in their network. Most companies have formed alliances with other timeshare networks, which allows you to use your points with another exchange network. This has made the process more appealing for many former timeshare critics.

Pro: Cheaper Vacations

When you stay at your timeshare, you have a kitchen to make meals and snacks in, your unit is fully furnished (much cheaper than furnishing your own vacation home) and includes free laundry as well. If you are a family, a resort-style atmosphere will cut down on the expenses of attending other outside attractions. You might get away with lounging poolside while the kids play all day "for free".

Con: Long-term Financial Commitment
On the flip side of cheaper vacations is an annual maintenance fee which stretches to eternity. Depending on the company you invest in, you will also have to pay miscellaneous fees/taxes when you switch locations, extend your stay, etc.

Pro: You can travel anywhere

With more than 5000 timeshare resorts, spanning 100 countries, you can have a home-away-from-home almost anywhere you would ever want to travel. Because timeshares are pretty consistent, you are guaranteed a certain level of accommodation and customer service.

Con: Good luck getting out.

They are hard to get out of. Once you are in, it is difficult to sell your share because there are so many other companies and offers out there. You could potentially be stuck with infinite annual maintenance fees and bye-bye original investment.

Pro: You're guaranteed an annual vacation

Timeshare investments can serve as the means of forced vacation time so you aren't tempted to just "skip this year". Vacations are good for the mind, the body, and the soul.

Overall, timeshare resorts are becoming more flexible in order to increase memberships, which makes them a wonderful option for those who love to travel.

Monday, January 7, 2013

The Real Estate Dictionary Part 2

Welcome back for Part 2 of our Basic Real Estate Definitions Blog Series. Click Here if you missed Part 1.

Basic Real Estate Definitions - F - Z

Foreclosure. A foreclosure occurs when a home owner is no longer able to pay their mortgage. If they are not able to refinance, work with their lender, or qualify for one of the current government assistance programs, the foreclosure process will begin. Eventually, the bank/lender takes the home back and works to resell it - hoping to get (at least) a return on their original investment. Fortunately, current California foreclosure rates are beginning to decline.

Home Equity Line of Credit. If the real estate market continues to go up over time, your home will become more valuable. If the difference between the current cost of your home, and the amount you originally paid, is positive - then you have gained equity. You can use this equity and apply for a loan which is granted on the amount of your equity, rather than your income, and receive payment for a predetermined amount.

Home Inspection. A home inspection protects you, the buyer, from purchasing a home which has inherent structural damage which you would be forced to deal with in the future. Depending on the outcome of the inspection, you may forgo the home altogether, or negotiate for a better price to compensate for the repairs which need to be made.

Homeowner's Association. (HOA
). If you are buying new construction, or a condominium, you may be joining an HOA. The responsibilities of the HOA vary, but you will pay a monthly fee and that fee will cover certain improvements, upkeep, and amenities.

Lease Option. This is a creative option which allows the buyer and seller to negotiate a sales price and a monthly rent. A certain portion of the rent and/or additional funds can be put towards the down payment on the house. This is a good way for buyers to see if they really want to purchase a house before committing.

Loan Servicing.
Just because a certain lender issues your loan, doesn't mean you will always make payments to that lender. Loan servicing companies can "buy" the loan, or manage the loan, and you will receive paperwork regarding the transfer and make your payments to the loan servicer.

Mortgage Insurance (MI). This is usually required by lenders if your loan is for more than 80% of the total purchase price. You will pay a little extra to insure them should you eventually default on your loan.

PITI (Principal, Interest, Taxes & Insurance). These days, most loans are "compounded" and each of these fees is already built into your monthly mortgage total. However, if you opt not to take a compounded loan, your lender will incorporate PITI costs when calculating your debt-to-income ratio.

Title Company. This is the agency that examines and insures that the property title(s) is clear before the transaction is complete. In California, most Title Companies also handle the escrow funds.

Now you can conquer the real estate world with new-found real estate vocabulary fluency. Good Luck!

Friday, January 4, 2013

The Real Estate Dictionary Part 1

If you are relatively new to the real estate market, real estate terms and acronyms can start to make you feel incompetent. Just like any other experience with new vocabulary, a little time and experience is all you need to begin conversing fluently about ARMs and PITI with the best of them.

In order to lend a hand, we though we would offer a two part blog series, outlining basic real estate definitions you're likely to come across throughout your real estate experience- whether you're a first-time home buyer or beginnings your future real estate investing career. Don't worry, we won't conduct any pop quizzes or final exams...

Basic Real Estate Definitions Part 1

Adjustable Rate Mortgage (ARM). Here's that first pesky acronym. An ARM is a mortgage in which the total amount you pay is completely dependent on current interest rates. In other words, your mortgage payments increase and decrease over time. These are normally a risky proposition - just ask anyone who purchased a house between 2005-2008.

Annual Percentage Rate (APR). This is not the same as the percentage rate shown on your loan docs. The APR is derived from a value-based government formula which (as a guideline only) can be figured by subtracting your closing costs from your total loan amount. Use this total to calculate the interest based on your payment amount. This will yield an approximate APR, which will be slightly higher than the one on your loan doc.

(Real Estate) Broker. Who is the "broker" anyway? All real estate agents must work under a real estate Broker. Broker's have taken additional classes and hold the ultimate responsibility should anything go awry as the result of your agent's error. That's why the Broker gets paid too, even if you never saw him/her. Some real estate agents are also Brokers, allowing them to work independently.

Closing Costs. You thought you agreed on a final purchase amount. Your escrow is about to close and the Title Company (to be defined later) wants a check from you for X-thousand dollars. What??? Closing costs consist of a conglomeration of fees, such as recording costs, misc. legal fees, surveying fees, etc. Your real estate agent should be able to estimate these for you beforehand, OR you can ask the seller to pay them if you're negotiating a deal.

Escrow. Escrow is an item of value - such as money or documents, which are held by a third party entity until certain conditions are met. In real estate, it's usually money which is distributed to the seller when the sale is final.

Fixed Rate Mortgage (FRM). This is a mortgage option in which the loan is offered at the current interest rate and won't change during the lifetime of the loan. They are great when the interest rates are low - such as now - and not so great when interest rates are high - like back in the 80s. However, buyers can refinance if their credit is good and interest rates go down.

Check back for Part 2: Basic Real Estate Definitions F-Z

Wednesday, January 2, 2013

Fair Housing 101

If you are interested in becoming a real estate investor, it's important to have a clear understanding of Fair Housing issues. If you are sued for a violation of a Fair Housing law, it will be time consuming, energy consuming, and will cost a significant sum - even if you win.

Fair Housing Issues 101

For a more comprehensive guide to these issues, make sure you consult with a lawyer who specializes in landlord tenant laws.

What is Fair Housing?

In a medium-sized nutshell: The Fair Housing act was first implemented in 1960s and was created to prevent landlords and sellers from discriminating against prospective tenants/buyers due to their race, nationality, color, religion, etc. Since then, the act has been a constantly evolving entity, designed to keep landlords, sellers, and other members of the real estate community from using anything other than financial data to facilitate the sell or rental a residence. Currently, it's overseen by the US Department of Housing and Urban Development (HUD).  It is incredibly complex and difficult to understand in its entirety, however failure to understand your tenant/buyer's rights can land you in a heap of trouble. Here are some of the basics:

What types of housing are covered?

Pretty much everything. There are certain circumstances which are excluded, such as a building with four or less units which is owner occupied, residential real estate sold by the owner, rather than a broker, or housing which is owned by a private club/organization which only rents/sells spaces to its own members.

What is Prohibited?

Whew! Here we go...each of the following restrictions applies if they are based on an applicant's race, color, handicap, religion, national origin, sex, or family status:
  • refuse to rent or sell housing
  • deny housing negotiations
  • create different terms, conditions, for sale or rental of a residential space
  • erroneously deny that a space is for sale or rent
  • restrict a person's access to a facility or privilege attached to a dwelling
  • provide unequal housing or facility services
The Fair Housing Act also applies to mortgage brokers and lenders. Based on the same protected groups identified above, mortgage brokers and lenders can't:
  • deny a mortgage or loan without just financial cause
  • refuse to provide information regarding home loan options
  • set differing loan terms, such as interest rates, extra points, or hidden fees
  • refuse to appraise a property
  • create differing terms for purchasing a loan, or refusing to purchase a loan altogether
Similar restrictions and terms apply to multiple areas of the real estate market.

As a landlord, the Fair Housing Act protects your tenants in additional. For example, you cannot refuse to let a handicapped tenant make an appropriate modification to your property. If an individual is a licensed owner of a certified Assistance Dog, you must allow the dog even if you traditionally have a No Pets policy.

If you plan on becoming a real estate investor, understanding the ins and outs of the Fair Housing Act will help to facilitate the road ahead. It is a good idea to consult an attorney to make sure you are doing everything to the letter of the law.

Tuesday, January 1, 2013

Happy New Year!

Hi everyone! We want to thank you for being loyal readers of the Pacific Place of Redwood City blog! If you've got any suggestions on what you'd like to see us write about or comment on, just leave a comment below. Also don't forget to follow us on Facebook and Twitter!

Don't forget, we're still running our promotion to pay your mortgage for 6 months!