Median Home Price Bounces Back

After hitting a two year low in January, the median price for single-family re-sale homes tacked on 4.9% in February from January. Year-over-year? Not so good. The median price was off for the sixth month in a row, falling 7.2%.

Home sales fell to their lowest level since January 2009. The 116 home sales last month were 5.7% lower than last February.

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Things To Know About Buying Foreclosures

Things to Know about Buying Foreclosures

Are you thinking about buying a foreclosed home for yourself or as an investment? Due to the fact that foreclosures are sold below market price, you will definitely get a great investment when purchasing a foreclosed home.

Even though you might not spend as much money on a foreclosed home as you would on a conventional home, before making a lifetime investment you should know in what you invest. Therefore you should start getting familiar with foreclosures and how to prevent from the risk to invest in the wrong property.

What does foreclosed mean?

Foreclosed means, that a borrower/owner cannot pay the loan or mortgage payments back. The lender has to secure the loan and starts the foreclosure process.

The pre-foreclosure process in California starts from the time the borrow/owner misses his first payment. The owner will receive a “Notice of Default”. From then on the owner has 90 days time to find the missing payment, within this 90 days of notice the mortgage company will prepare to bring the home on the market. The foreclosure sets in after the 90 days and the owner will receive a “Notice of Sale”.

How you benefit from buying a foreclosed home

  • Buying a foreclosed home means you spend less money on a property with more market value
  • Some lenders are willing to lower the down payment or interest rate or will not charge closing costs since the mortgage is in default
  • You have a wide selection on foreclosed homes
  • The property can be sold for more money later

What you should know before buying

It’s important that you work with an agent or broker who is experienced with the process of buying foreclosed homes.

Before putting down an offer you need to know what you are buying. It is important that you have the property inspected by a home inspector and find out about the real conditions of the property.

Don’t buy a property you have never seen at an auction. Instead buy REOs through a real estate agent.

The foreclosure process has 4 steps. For you the buyer it is important to know in which state the property is for your strategy to buy.

You need to know that many laws that usually protect you in a conventional real estate transaction do not apply to a foreclosed property.

The property will be sold under market price but might need some renovations. When buying a foreclosed property you have to keep that in mind when making your calculations.

Always do a title search on a property. You have to know if there are any existing encumbrances or liens on the property. Oftentimes property taxes need to be considered.

In some cases the previous owner refused to move out and vacant the property even after the title was transferred. This will lead to an eviction process and you as the new owner have to evict the tenant.

Jump Start Your Relocation

Relocating to a new city can be a big challenge, especially if you are not familiar with the rental and real estate markets, or you are not familiar with the different neighborhoods.

Working with a local housing expert can be an asset. Licensed real estate agents, relocation companies or rental companies offer a variety of services to ease your move to the Bay Area.

Want to read the full article on how to Jump Start Your Relocation?

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How to Qualify to Buy a Home – Mortgage Guidelines

How to Qualify to Buy a Home – Mortgage Guidelines


When you are considering buying a home, the first step you should take before looking for your dream house is getting pre-approved for a mortgage. Find out if you qualify for a loan, and for what type of loan and mortgage rate you qualify for.

The variables a lender is examining

A lender will review all your financial data to see if you qualify to buy a house. The variables a lender is examining are your income, debt, credit and savings.

The most important of this is your income. Not only your gross monthly income has to be reviewed but also the type of work and the lengths of employment.

If your income is based on a commission your income will often be examined on a required two-year history.

In case you are self-employed, you must be self-employed for two years. Your income will be determined based on your federal tax return after all the deductions.

How credit scores affect mortgage rates

Your credit score affects your mortgage rate. Most lenders use a credit score designed by Fair Isaac Corporation (FICO). As a borrower you should access your credit report and ensure that your credit score is as strong as possible.

Scores range from 300 – 850. A score below 620 is considered sub-prime and indicates high-risk to lenders and would cause in a charge of higher rates and fewer choices of loans, 620 to 650 is good but you may still be viewed as a high-risk candidate, and above 720 is seen as excellent credit.

To qualify for the best mortgage rates and to have more loan choices you should at least have a score of 720.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to one free credit report from all three major credit reporting bureaus – TransUnion, Equifax, and Experian – for every consumer every 12 months (visit annualcreditreport.com to order your free report). Make sure that your credit history is accurate and request the reports from each company and check if there are any errors.

The ratio a lender uses

There are two calculations a lender uses.

The first or front mortgage ratio, are your total monthly housing expenses to income ratio. Which include principle, interest, taxes, and insurance (PITI).

The second or back mortgage ratio is your total housing expense (PITI) plus all other monthly debt divided by your gross monthly income. Which is your income before taxes are taken out.

Mortgage debt to income is the ratio a lender uses to calculate if you qualify for a mortgage. A house payment should not exceed about 30 % of your gross monthly income for a conventional loan.

How to prepare in advance to get approved?

  1. Since the most important factor is income, you should have a verifiable source of income.
  2. Get your finances in order. Pay your debt on time, which includes all your loans, leases and credit cards. Loans can be paid off to qualify for a mortgage, but credit cards sometimes cannot, depending on the lender.
  3. You should check your credit report for errors and monitor your credit score.

How to find the right lender or bank?

Do you know what you should be looking for in a lender or bank? On of the most common criteria when it comes to choosing the right lender or bank are credibility, dependability, and longevity in the marketplace.

When you are like most people you probably ask someone you trust for a recommendation. But when it comes to your mortgage, you should always consider that your situation might be different from your friend’s situation. Therefore always consider that you should find a lender or a bank that fits your needs the best.

Visit our website for more information about buying a home visit.

Home Prices Start Year on Down Note

Local Market Trends San Francisco

The median price for single-family, re-sales homes plunged in January, falling to its lowest level since January 2008. The median price dropped 15.1% from December and was off 12.8% year-over-year.

Sales also dropped from December, but that hap- pens every year. Home sales were actually 19.8% higher than the year before. That’s the second month in a row home sales have been higher than the year before.

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