Are Your Eyes Bigger Than Your Stomach?

by qinfovio 4. March 2014 16:14

Good afternoon,
 
I am meeting a lot interesting peoples with our new office location. I always like to have my real office to be located at the street level as close to the down town as possible. (But I will not pick Alvarado St in Monterey, why? Go check it out...).
 
That way, you can have a better feeling of the community, businesses around yourself. But according to our city in Seaside with their new zoning concerning the West Broadway Development, all offices are supposedly to be at the second floor in this project or heavy penalty for their use permit.
 
Just before noon today, someone, a lady, was walking through our door, looking for a rental. I listened to her story mentioning that they used to own a real estate office in Seaside. They lived through the creasy time of our last real estate boom, had many agents, were making a lot of money. From one single family home, went to buy a 5 acres mansion in the Prunedale area, Jaguar car....living a millionaire life.
 
And suddenly the market started to change, their real agents were living the industry with the up coming bubble, they lost all their properties, through foreclosures and end up in a 2 bedrooms, 1 1/2 bathroom apartment in South Salinas. Her husband went back to sales in a different industry. Then health issue came up, they have health insurance but not enough to cover all the bills at over a $1 million.
 
It is a true story that they tried to move on and get their lives back and it was not a long time ago, only 2009. But it seems that we try to forget this story that happen to millions of American family.
 
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We have been assisting buyers in the San Mateo area where the housing market is getting crazy. Since we are getting closer to larger cities, you will find better paid jobs. The price range that we were looking at around $650,000. Home prices were up 40% in less than 3 years, mostly due to low interest rates and more ARM loan coming available.
 
First choice of buyers to get the property would be a cash sale, conventional loan 20% down and both are usually "As Is" and the cash sale has no loan contingency.
 
And the last horse to come is our FHA's buyers that have absolutely no chance to get this property. And it is good news!
 
FHA loans required only 3.5% down payment and is a federal insured loan, just like a student loan. They cannot be discharged through bankruptcy with the court.
 
At the height of our bubble market, we all have at least two mortgages into a property 80/20, 80/10/10...and most of them had no down payment and we were able to dispose the debts if we were insolvents.
 
I said that FHA buyers should stay away from 3.5% down payment with FHA mortgage and 0% down payment USDA type of loans.
 
If the property value go back in reverse, let 's say 3.5% or back to 40% for San Mateo area, not only your property will be upside down but you will have to repay the debt. And it is the reason that I brought you the story from this lady walking through my door at noon.
 
The lesson that I learned from our previous "Crisis" you should not forget the word "Never" and don't get your eyes bigger than your stomach, don't consume more than your produce, and what ever will never happen to you will happen.
 
 
 
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When I am looking to invest or buy a condo: I first check the location within the city, the city itself, location in the complex, the condition of the unit, condition general aspect of the complex. I will rate this unit a A+. Once it comes to the price, it cannot be sold more than appraisal price.
 
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I went to visit a dozen of homes in the Seaside area, from asking price of around $250,000 up to $550,000 and I will said that the type of buyers from the high of the market in 2005 compared to 2014 are more demanding. All these buyers are properly pre-approved and they will not buy if property is not close to perfect condition or are over price.
 
First impression is the best impression, so if you are a seller, take an extra week to clean up the inside property and another couple thousands of dollar on the outside/backyard. For every dollar that you put in it, you will at least double the return.
 
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I noticed that agricultural commodities prices have been low, in a bear market for the last three years. Falling food prices have masked the increase in prices of other things-like health care, utilities (electricity and water).
 
But as you can tell by walking into any grocery store, food prices are going up –
 
Yesterday, I paid $8.99 for a pound of bacon. It wasn't the fancy, gourmet bacon, either. It was the pre-sliced, shrink-wrapped stuff you find in the packaged-food section of any supermarket. It was $4.99 a pound a few weeks ago.
 
Bacon isn't the only food going up. Beef, chicken, milk, and cereal prices are all headed higher in the U.S. and around the globe.
 
Expect higher food prices coming up the next 3 years until this cycle revert.
 
Thank you and I will see you next week!
 

 

Christian Viollaz
License 1318338
9 Buyer Traps and How to Avoid Them
 

 

 

03.04.14 NOD List.pdf (10.52 kb)

03.04.14 REO 3 Party.pdf (5.36 kb)

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Real Estate

Hack Facebook
Hack Facebook United States
5/29/2014 12:19:19 PM #

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Julio Rigazio
Julio Rigazio United States
11/7/2014 5:20:47 PM #

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