Orange County Real Estate Podcast with Alex Yu

Here's how you can find your debt-to-income ratio and qualify. “What exactly does it take to qualify for a mortgage?” Interest rates are rising, and I've received this question a lot recently as a result. Many buyers want to find a new home before rates increase further. If you're in that boat but don't know what you qualify for, today I want to break down what you need to qualify for a mortgage. If you want to find out what you can qualify for, the first thing you need to do is calculate your debt-to-income ratio. If you're a traditional employee, your lender will use something called a gross number, which is calculated by taking your gross income and dividing it by 12. If you're self-employed, this number is your average net income from the last two years after subtracting all your business expenses. From here, there's a front end and a back end. The front end consists of all the expenses associated with the property you want. So if you want to buy a home, your front end would include your mortgage payment, property taxes, HOA fees, insurance, and Mello-Roos taxes, if applicable. Typically, the front end has to be below 36% of your gross income if you're employed or your net income if you're self-employed. “Your lender won't look at your grocery bills or how much you spend on gas.” The front end is important, but the back end might be even more so. Back-end expenses include all your scheduled and paid expenses such as car loans, credit card debt, personal loans, and student loans. Typically, this needs to be below 45% of your gross income for employees and net income for those who are self-employed. We're in an inflationary period right now, so it's more important than ever to understand your budget. You may qualify for a loan, but your lender won't look at your grocery bills or how much you spend on gas. Be careful, and make sure you purchase a property you can afford. If you are looking to purchase a home, please call or email me. I have relationships with a few specialized lenders ready to help no matter what your situation is. I look forward to talking with you!

Here are a few things you should not do until your home purchase is final. If you're in the process of trying to secure financing for a home purchase, there are certain things you should avoid doing at all costs. There are three, in particular, that you should watch out for: 1. Avoid making large purchases. It's exciting to be so close to the finish line, but don't count your chickens before they hatch. If your debt-to-income ratio changes due to a large purchase, your financing may not go through. I've seen it happen before, and it's a nightmare. 2. Avoid planning trips out of the country. During the escrow process, there are a number of documents that you'll have to get notarized. If you're out of the country, you'd have to go to the U.S. embassy to get the documents notarized. You might not be ready for that adventure, so it's be a good idea to postpone your trip to Italy until after closing is over. 3. Avoid aggregating your funds. This will turn your loan approval process into a huge headache. All of your documents have to be reviewed by an underwriter. When they do that, they have to track any large deposits or withdrawals that are made while you're in escrow. If you deposit a bunch of funds at once, you'll have to document every one of those items. If you must, wire funds from separate accounts to your escrow to avoid the paper chase. “If you're out of the country, you'll need to visit the U.S. embassy.” If you're planning on buying a home, keep these things in mind. They can delay or even destroy your transaction. If you have any questions for me, don't hesitate to reach out via phone or email. I look forward to hearing from you soon.

Here's what buyers and sellers need to know about rent-back agreements. Today we're going to talk about renting a home back. Typically, renting is something that you want to avoid as a seller, but when you rent a home back, you'll be renting it from the buyer. This gives you more time to find your new home and transition smoothly into it. Let's go over some of the specifics and advantages of rent-back agreements. “A rent-back gives the seller more time to move and makes the buyer's offer more appealing.” When you're renting back, the cost typically falls into three categories. Sometimes the buyer will only charge you $1, so it's more or less for free. They may base the rent off of the market rates in your area, or they might base it off of the buyer's down payment and closing costs. No matter what the price is, the buyer effectively becomes a landlord, and the seller becomes a tenant. From the buyer's perspective, rent-back agreements make your offer more appealing if the seller needs that time to figure out their move. It can be a bummer because as a buyer, you've bought a house, but you can't live in it yet. Keep in mind that the maximum time for a rent-back agreement is 60 days if you're using financing on your offer. Any rent-back scenario needs to be negotiated at closing, not after the fact. Even with that, we see it in a lot of our transactions. Our last three listings all had rent-back agreements in place. One was as short as two weeks, and one was as long as nine months. If you have any questions about renting a home back or other real estate topics, feel free to call or email me. I would love to help.

Here are the basics about what buyers will pay for in closing costs. What do buyers have to know about closing costs? In addition to the down payment, buyers need to factor in closing costs of 1.25% and 2.5% to pay for prepaid items, lender fees, escrow fees, and title fees.  Here's an example of prepaid items: If you're closing on your purchase in July, the seller has likely already prepaid their taxes until November, so you need to pay them back for that. Another prepaid item is for if you set up a new escrow impound account. With that, you'll be paying one-twelfth of your taxes and insurance every month. However, to set up that account, the mortgage company usually needs six months' worth upfront, which increases your closing costs. Mortgage interest starts the day you close and goes until the end of the month, so you'll have to pre-pay that as well.  “Due to all these different factors, your closing costs can vary.” You'll have to pay basic lender fees if you're getting a loan. As of the recording of this video, interest rates are around 3%, but if you want a 2.75% rate, for example, you'll need to buy down the rate. You can speak to a lender about that, but it's essentially pre-paid interest to help you get a lower rate and payments in the future. When it comes to the escrow process, some states use attorneys. In California, we use an escrow company as a third-party intermediary. You'll pay the escrow company to manage the transaction between the buyer and seller, and usually, the buyer pays their half, and the seller pays their half.  Title fees protect the lender in case there's a lien filed on the property while you own it, and you need lender's title insurance if you're getting a loan. There's also owner's title insurance, which protects you as the owner, but typically the seller pays for that.  Due to all these different factors, your closing costs can vary. We can give you a baseline of what all this generally looks like so you can plan ahead. You'll want to create a savings plan ahead of time for any house you plan to buy to pay for closing costs.  You can work with a lender to help you with all this, but we can help you too. We get questions about closing costs all the time, so if you have questions about them or any other real estate matter, call or email us. We would love to be your real estate resource.

Here are the pros and cons of making or accepting a cash offer.   What should you think about when dealing with a cash offer? According to Atom Data Solution, 26% of homebuyers used cash in 2020. A cash offer means there is no financing in regards to the mortgage of a home. There are a couple of reasons why a buyer might put up a cash offers: • They might be an investor with lots of cash to spend. • They may have sold another home and used the equity to buy this home without a mortgage. • They may want to stand out by using cash. • The home may be a fix and flip, meaning they have to use cash to buy it due to the condition. • They might have a tight deadline to close the home. For sellers, there are a couple of advantages to a cash offer. The timeline for closing with a cash offer is much shorter. According to a recent study, most mortgages take 37 days to close. A cash offer can close in 14 days or less. These offers don't require a loan contingency since there is no underwriting and less paperwork associated with it. Cash offers don't need an appraisal either. This will make the offer more likely to close since the valuation will never be in question.  “There are pros and cons to cash offers, both for the buying and selling sides.” The downside is that cash offers will want to pay less, but if you're on a tight timeline of if the cash offers are comparable to the financed offers, it might be advantageous.  Seven homes we listed this year have sold with cash offers. Again, it is good for the seller if the timeline is a big concern, but we've also seen these offers be a little more flexible with other terms. One of our clients negotiated a nine-month leaseback since the buyer was an investor who was planning to rent the property out anyway. As a buyer making a cash offer, there are some obvious benefits: it's faster, there are fewer contingencies, and it gives you a competitive advantage. Even if you're going to use a cash offer, you'll still have to work out the title and sign loan documents, but overall, there are fewer moving parts.  However, with mortgage rates being as low as they are, cash offers have a downside: You're going to be tying up a lot of your cash into an asset that's hard to sell, meaning it'll be tied up for a longer amount of time.  It may be better to put in a combination of cash and mortgage. You can do the same as a few of our investor clients who have put down 50% instead of paying all cash. With these, they diversified and bought a couple of extra properties this same way. As long as the numbers add up, this is a great strategy with the cost of money being so low right now. As with anything in real estate, there are pros and cons to cash offers, both for the buying and selling sides. However, as long as you're aware of them and the numbers add up, you might find that cash offers actually work best for you. If you have questions about this topic or anything else real estate-related, please give me a call.

Are low appraisal values still an issue in today's market? Though things in the market have changed this year, we are still seeing homes appraising low in today's market. Why does that happen? Oftentimes, the appraiser is an independent third party, but they have to substantiate the valuation of the home using the data that's there. Typically, they need at least three closed sales to substantiate the value they give. In this low-inventory market, sometimes there aren't enough sales to match the asking price, so there's a gap in the appraisal value.  What happens if you're a buyer and the appraisal value doesn't come in? In previous markets, you'd be able to negotiate with the seller. Suppose you're under contract for a $900,000 home, and the appraised value came in at $875,000. You could negotiate with the seller to drop their asking price down to the appraised value if there are no other offers. However, there's little room for negotiation in this market, and buyers often waive the appraisal contingency at the very beginning. In that case, the buyer would have to make up the $25,000 gap. “If we make their job easier, appraisers are more likely to lean on our data for their valuations.” How do you prevent a gap? The best way is to maximize the valuation of your home to reduce the friction on the transaction. When we're under contract with buyers, we look for the relevant closed sales that we want the appraiser to factor into their valuation.  On the selling side, we find everything we can about the home in terms of upgrades and see how that compares to other homes. Appraisers don't get paid a whole lot to do what they do, so if we make their job easier, they're more likely to lean on our data. In this way, buyers get excited because they won't have to fill in a gap, and sellers are excited because they're getting all the money they need to close the transaction. If you'd like to chat more about these strategies or have any questions, reach out to us via phone or email. We'd love to help you.

What's behind the low inventory of homes here in Orange County? There are four reasons that the inventory in Orange County remains so low: 1. There is a foreclosure moratorium. The moratorium preventing foreclosure expired, but it was extended in August. However, we don't anticipate that there will be a lot of foreclosures, at least in the short term. Many people who were behind on their mortgage during forbearance have seen their equity positions grow quite a bit. Where 15% of people were in forbearance, now only 5% are. Another aspect of this is the eviction moratorium. Some people who own rental properties haven't been paid in close to 18 months since COVID started and protections were put in place to protect renters. Since then, rents have increased quite a bit. It's believed that a number of these owners, if they're not professionally managed, will decide to sell their units. Historically, that means the owners of units in the lower price ranges will be the ones to sell. However, because the moratorium prevents the eviction of tenants, that inventory hasn't yet hit the market. “We can reach out to potential sellers to find you off-market properties.” 2. Would-be sellers don't have many places to go. There are under 2,700 homes available across the MLS. Just three or four years ago, there were between 4,000 and 5,000 available homes. Due to this lack of availability, many sellers aren't certain they'll be able to find another home to buy if they sell. 3. Some transactions are done off-market. Since many still have concerns about COVID, instead of listing their homes to the general market, some homeowners have been selling off-market to avoid having all those people coming through their homes for showings. When homes are sold off-market, they don't enter the MLS. 4. Investors are looking for rental properties. Investors are looking for long-term rentals that they can improve in value because interest rates are currently low. They're looking for ways to increase their returns, and the properties they buy are also sometimes purchased off-market. If you or someone you know is looking to buy in this market, know that it is challenging right now. However, we can reach out to potential sellers to find you off-market properties. If you have any questions about buying a home or the market in general, reach out to us via phone or email. We'd love to be a resource for you.

Is purchasing real estate still a good idea? With home prices as high as they are, does it still make sense to buy real estate in 2021? It all depends on your circumstances, but by and large, yes, it is a great time to buy.  The reason is that the return on money is historically low. Often, it's under 1% even for a certificate deposit that runs five years. We can't predict the future, but when it comes to real estate, you don't actually lose money over any seven-year period. Many of the people who are thinking about buying a home are currently renters. Rents this year increased between 20% and 30% across Orange County, and there are a number of reasons why. For one, some landlords have raised rents for tenants to offset the ones who aren't paying rent due to COVID-related financial stress. Whatever the reason, if your rent rises by 20% or 30%, that can affect your lifestyle because incomes haven't increased by a comparable amount. “Real estate is a great vehicle to save up and plan for your financial future, but there are a lot of things to consider.” Another thing to consider is that when you buy a home, your mortgage is typically fixed. When you rent, you're paying someone else's mortgage anyway, so you might as well pay your own. A mortgage is like having a forced savings account that grows as you pay down your balance and gain equity. Buying investment real estate also comes with its own benefits. My parents didn't have huge pensions or 401(k)s set up for them over the years, so when they could afford to, they purchased homes. They owned a total of four homes, which we've sold off, and used the equity to fund their retirement. You can also turn your investments into other assets through a 1031 exchange and roll the gains forward until you actually need them. In the end, real estate is a great vehicle to save up and plan for your financial future, but there are a lot of things to consider. If you have any questions about buying a home or you're looking to purchase an investment property, please reach out to me via phone or email. I'd love to be a resource for you.

Thank you for all of your support. We did it! Thank you for all of your support. We collected over 200 pounds of dog and cat food, 147 pounds of cat litter, 77 towels, 11 gallons of detergent and countless toys. We're grateful for the incredible community for supporting our local event, benefitting shelter animals with Priceless Pets, A No Kill Shelter. Our commitment is to make a difference in the community, while serving our clients. Thank you for your support!

Here's how the market has changed in the last year. We've just hit the third quarter of 2021, and that means it's a perfect time to look at the emerging trends in our housing market. Today we'll be going over all the important stats you should know in order to see where our real estate market has been, where it's going, and where it is now. Now that many people are vaccinated and more places are opening up, we're seeing a slight drop in buyer demand. School is out, so families are going out, taking vacations, and spending time away from home. Just a few months ago, almost everyone was still stuck at home, and many people were trying to buy a house to have more space. Though demand has subsided somewhat, home inventory is still very low. Looking at the graph at 1:16 in the video, you can see the sudden drop in inventory we had when the pandemic began. The numbers never quite recovered—from August 2020 to now, there has been a 40% decrease in inventory. Home supply increased slightly over the summer, but this was only due to the mild decrease in demand. “From August 2020 to now, there has been a 40% decrease in inventory.” Although year-over-year numbers show demand is slightly lower and inventory is slightly higher, we're still in an incredibly strong seller's market. Additionally, you can get a great deal on your home sale because prices just keep rising.  These recent changes in supply and demand also allow us to find our buyers fantastic homes that fit their needs. And with interest rates remaining at all-time lows, buying a home is still incredibly affordable—even when prices are skyrocketing. If you're thinking about buying or selling a home, reach out to me. I'd be happy to answer any questions you may have about our market or provide you with more information. In the meantime, I look forward to hearing from you soon.

Getting top dollar requires more than simply preparing the home for sale. Right now, we're experiencing one of the strongest seller's markets ever. How can you maximize the sale price of your home? You obviously need to get the property ready, but there are other considerations. First, make sure every buyer knows about your home. As soon as we get one offer, I reach out to all the other real estate agents who have shown the home to let them know that there is competition on this property. To understand the potential buyers, we put all their information into a comprehensive Excel document. “Make sure that your agent has checked the numbers, reviewed the agreement, and knows how much the buyer has in the bank.” It's easy to mistakenly think that the highest possible price is the best offer. What you truly want is the highest price that will reach closing. Make sure that your agent has checked the numbers, reviewed the agreement, and knows how much the buyer has in the bank. In this market, the property may appraise below list price. That gap needs to be made up somehow. I like to reach out to the buyer's lender and get all the information about their eligibility and qualifications to make sure they can actually reach closing with their offer. The most attractive offers will be the ones with the fewest contingencies. A contingency gives the buyer the ability to cancel the transaction before it closes. You want to determine which offers are the most competitive and negotiate with them to reduce their contingencies or waive them altogether. If you have any questions, please reach out to me. I'm happy to help.

Here's how you can buy another home without first selling your current one. One of the most common questions we've received lately is, “How can I buy a house without selling the one I have now first?” With inventory being as low as it is, homeowners are concerned about not being able to find a new home if they sell their current home. Luckily, there are a couple of different options for those who find themselves in this situation. Your first option, if you have the requisite down payment funds already, is to speak with your mortgage lender to see if you qualify for both homes at the same time. If you do qualify, sometimes they can take the current home you own and assume that you're going to rent it out in order to reduce your monthly obligations. Keep in mind, though, that there will be a period where you own both homes at the exact same time. If you don't have the down payment funds available to buy the new home, you could look at a cash-out refinance, which would allow you to take out some of the equity you have in your current home to be used as a down payment on the new home. Alternatively, you could look into getting a 401(k) loan or a home equity line of credit to pull out some cash for your down payment.  As with the first option, you will need to qualify for both homes at once to take advantage of these options.  “Bridge loans are beneficial, but they're also more costly than traditional mortgages.” Your third option is also set up through a financial institution: a bridge loan. A bridge loan allows you to use your equity to guarantee another loan for the next house even as you still own your current house. Under the terms of a bridge loan, you're usually given six months to sell your existing house before the loan is due.  Bridge loans work well in situations where you're buying a house that needs work, as they give you a period of time to improve the property before you move in. These kinds of loans are beneficial, but they're also more costly than traditional mortgages. Other clients of ours have been very fortunate to be able to borrow money from family as a gift, but not everyone has those resources. These options will give you more certainty during that process that you won't have to move twice. If you have any questions about these options or you'd like more information about your own situation, feel free to reach out to me. I'd love to have a conversation with you.

Should you sell your home in the current real estate market? We're in an aggressive seller's market in most price points under $2 million. So yes, you should sell your home right now if you're looking to maximize your sale price. If you're looking to move up in the present market, you may have to trade equity. If you're downsizing, you might have to trade a higher amount of equity for a lower-priced home to end up in a positive position.  Prices are at historic highs because of the lack of inventory. Imagine if we had 100 homes for sale and 300 buyers entered the market, and next month 300 more buyers entered the market—that's essentially what's happening these days. It's the age-old story of supply and demand—not enough supply and overwhelming demand. If you're open to doing a rent-back, you can step back into the market when prices change. If you're moving out of the area or state to a market with slightly less demand, that's a great opportunity. “Whether or not now is the time to move depends on your circumstances.” You shouldn't buy a home in the present market if you're committed to having your kids in the school district they're in or if you're uncomfortable with moving twice. The market is extremely competitive, so getting a contingent offer accepted will be difficult. More so today than before, sellers will rank the offers they receive based on the amount of risk involved.  Everything in real estate comes with pros and cons, so whether or not now is the time to move depends on your circumstances. I want to be a resource for you and break down your situation and run the numbers to see what makes sense for you. If you have questions or if there's anything I can do for you, please let me know via phone or email. I would love to help you.

Here are the key market changes we saw in our first quarter. The first quarter of 2021 is behind us, so today we’ll be talking about what happened in our real estate market from January to March and how it compared to last year. Interest rates are going to be affecting the market. The rates of 30-year fixed mortgages have gone from 2.65% to 3.09%, which is a 16.6% rise. If a person buys a home, their mortgage costs will have increased by that same amount. Rates may be slightly higher in some areas as well. “We saw high demand from buyers in our listings, which allowed sellers to reach prices they never thought they could get before.” It’s been a strong seller’s market since around June 2020. Still, we saw that inventory decreased by another 1% to 2,349 homes available throughout Orange County. In February, there were 209 homes on the market. At the same time last year, there were 4,159 homes on the market — that’s 77% more than we had this February. Needless to say, there’s a huge lack of inventory. Rising interest rates are affecting buyers slightly, especially those searching in lower price ranges. However, we’ve seen little change in the luxury market (homes priced at over $1 million). We saw high demand from buyers in our listings, which allowed sellers to reach prices they never thought they could get before.  Here’s an example of a home we sold in Irvine. A home like it had recently sold for around $692,000, but we sold the Irvine home for $750,000. The only reason the other property sold for $692,000 was that they went with a cash buyer and there was no appraisal. Remember that when you need an appraisal when you get financing, and they’ll only give you a loan that covers the appraised value.  In Costa Mesa, one home had sold a while ago for around $850,000. Recently, it sold for $922,000 with 21 offers. It didn’t end up appraising at that price, so the buyer paid $47,000 to bridge the gap. It’s not happening everywhere, but it’s not uncommon. Going forward, a few things may affect the market. Interest rates could rise, inventory could increase as sellers get comfortable with listing, and job growth could continue to stagnate. These factors may pull us out of this aggressive seller’s market. For now, demand is decreasing slightly due to higher rates. If you have any questions or would like more information, feel free to reach out to me. I look forward to hearing from you soon.

Here’s why home prices keep rising in our real estate market these days.   Why do home prices continue to increase? While yes, we’re still in a global pandemic, there are a few other factors to consider when asking this question.  “More bedrooms mean more opportunities in the market right now.” First, there are currently fewer houses available to purchase than there have been in the past two years. Just since last year, there are 40% to 60% fewer properties available on the market in most price ranges. That means competition is fierce for these homes. Also, interest rates are 30% lower now than they were at the end of 2018, which means buyers are getting houses for about 30% less, even though prices have risen.  During this health crisis, children are being schooled from home, and they need space for that. We also have many people working remotely from home, and they need office space. So all these people are looking for the same properties. We’ve seen family home prices grow more than condos or townhomes. More bedrooms mean more opportunities in the market right now.  Many people are also considering moving up, and that’s challenging. However, when you have a specific goal and plan, you can achieve it.  If you have questions or want to discuss how to plan for your next move, call or email us. We would love to be your real estate resource.  

Here’s what you need to know about closing costs as a homebuyer.   A lot of potential buyers focus solely on saving up for their down payment, be it 3%, 5%, 10%, or 20% of the purchase price. There are, however, several other costs you should be aware of. The associated expenses of buying a home, known collectively as “closing costs,” typically account for 1% to 1.5% of the purchase price. One of the most common closing costs has to do with the seller’s tax payments; if they’ve already covered their tax obligation well beyond the period that they’ll be living in the home, you have to pay them back.  “In most cases, buyers will have to bear the appraisal costs.” Another big one is homeowners insurance. Just like car insurance, you usually pay upfront for coverage for the ensuing 12-month period. Then there are escrow fees to worry about. An escrow company is a third-party intermediary that protects the respective interests of both parties by managing the funds of the transaction, and its services aren’t free. Next up, we have the title fees. If you’re financing the purchase with a loan, you can expect to pay lender title fees, as well. These protect the lender if something happens to the property’s title while you’re its owner and they have a loan on it.  Did you know that you have to pay for the home inspection upfront? In most cases, you’ll also have to bear the appraisal costs. Thankfully, those two costs are the only ones that you have to deal with before closing. For financed buyers, things like administrative fees will be tacked onto the mortgage, and so will private mortgage insurance should your down payment amount necessitate it.  While these costs aren’t exactly “hidden,” they can sure be surprising to buyers who haven’t done their homework. If you schedule a buyer consultation with us, we will provide you with a helpful sheet that breaks down all of this information in more detail. Don’t let the process overwhelm you; reach out to us by phone or email and take advantage of our real estate expertise. Of course, if you have any other questions pertaining to real estate, we’d still love to hear from you. Our goal is to help you gain the knowledge you need to buy with confidence.

Here are the things you should and shouldn’t spend money on when selling.   What improvements should and shouldn’t you spend money on before you list your home for sale? Some updates will net you more, while others will cost you. You want to focus on the areas buyers will concentrate on the most. From the moment they walk into your house, the predominant thing they’ll see is the main floor living area. Focus on creating a personality in the main living area; installing updated floors such as vinyl planking will help. The other area to concentrate on is the kitchen because it’s where people gather; many of us center our lives around food! You could paint the cabinets, install new cabinets, change the countertops, or you may want to do a full renovation to create a more open floor plan.  Second-most important to focus on is the master bedroom and bathroom because people looking at the home will remember the areas they will spend the most time in, and for many, that’s the master suite. No matter which area you’re upgrading, only spend money on what will get you a great return on your investment. “Focus on the areas buyers will concentrate on the most.” So what shouldn’t you do? There’s no need to overhaul secondary bathrooms—don’t spend a ton of money on them. You also don’t need to update the major systems such as the heating and air conditioning systems and water heater. 99% of buyers will ask for a home warranty plan, which will cover all those major systems and protect the seller. Requests for repairs on these systems can be negotiated later.  Additionally, painting accent walls or adding wainscoting or crown molding isn’t necessary. These will help a house sell quicker, but they won’t net you more money.  There are different levels of home refurbishment, but if you’re considering selling in 2021 or later, you may want to choose medium-level enhancements so you can enjoy them before putting your property on the market. Before you make any large decisions, feel free to reach out to us because we have access to excellent contractors who can put the finishing touches on your home to ensure a better sale. If you do what matters most to buyers, you’ll be in a position of strength and can call the shots. If you have any questions or you’re thinking of buying or selling next year, contact us via phone or email. We’re here to be with you each step of the way.

Here are the top three things today’s homebuyers are looking for.   Due to the fact that people have spent more time in their homes than ever with COVID-19 restricting social capabilities, homebuyers are thinking differently now. Demand remains sky-high in our market, but sellers would do well to note how today’s home-buying trends are a departure from the past decade. Here’s a list of what homebuyers in our market currently want:  1. Properties with pools. With the closure of public pools this year (and the foreseeable future), families have been looking for ways to stay entertained all year long. Prior to 2020, we rarely saw buyers place a premium on homes with in-ground pools, but nowadays, this feature is at the top of many “must-have” lists. Some are even willing to pay more for a property that simply has a pool-ready lot.  2. Remodeled and turnkey properties. Many of the buyers we’ve been working with are saving up for a 20% down payment on a home purchase sometime in 2021 to bypass the burden of private mortgage insurance. However, just a 10% down payment on a $700,000 home doesn’t leave these buyers with much (if any) extra cash for renovations—especially when you factor in closing costs.  “The condition of a home is more important than ever.” So, if a property needs $50,000 of out-of-pocket upgrades, it’s getting knocked off buyers’ lists right away; they’d rather pay that $50,000 in the form of a fully upgraded $750,000 home that’s  move-in ready. In that scenario, their 10% down payment goes a lot further.  3. Properties with extra bedrooms and loft areas. More companies than ever before are greenlighting work-from-home arrangements for their workforces, so today’s homebuyers are looking for extra rooms that can be used exclusively as office spaces. Additionally, many schools have transitioned to remote learning, creating a need for dedicated learning spaces within the home. The roomier your home, the faster it will sell. This year alone, we helped five families sell their one- and two-bedroom properties so they could move up into larger, more accommodating homes.  There you have it—the three most important home features for today’s buyers. If you’ve been considering selling your home that has one or more of these features, it’s a fantastic time to jump into the market and capture this demand. If you’re a buyer looking for these things, be aware that competition is high, so you’ll need plenty of patience.  If you have questions on this or any other real estate topic, or you’re ready to start the buying or selling process, just give us a call or send an email. We’re here to help through the end of the year, and we’d love to hear from you.

Here’s why we’re immensely grateful for your support this past year.   As we look back on 2020 and gaze ahead into 2021 with excitement, we recognize the unique challenges that this past year brought all of us. For some, 2020 was a great year, or perhaps a mediocre one; for others, it just felt like one wave after another kept crashing down on them. Through it all we were able to help 106 families make the right moves into their new homes. Making a move in the market isn’t something to be taken lightly—especially amid a pandemic—but they trusted us with one of the largest investments of their lives.  Our commitment is not only to provide a service, but an experience. Amazingly, 85% of those 106 families were referred to us by past clients or other referral partners; that’s something we’re incredibly grateful for as we reflect on 2020. Additionally, we were able to bring on two new agents, Carlos and Kino, to help them build their careers and create a lifestyle that truly satisfies them. We’ve also added Melissa, who has been absolutely instrumental in helping us market our listings to a wider audience.  Here’s what I’m most proud of, though: We donated 3% of our profits back to community causes (as we do every year) and were able to spotlight six awesome local restaurants in an effort to help drive new business their way. Beyond that, we had the privilege of partnering with phenomenal charities like Team Kids, an organization that empowers kids to change the world and learn important leadership skills. Thanks to your support, we were also able to donate to Working Wardrobes, Priceless Pets Rescue, I.C.A.R.E. Dog Rescue, and Girls Inc.  “Our commitment is not only to provide a service but an experience.” None of this would’ve been possible without your support. Our goal is to enrich the community we serve through our real estate business. On behalf of our entire team, I want to express a deep sense of gratitude for everything you’ve done to help us grow this past year. Together, we can make a larger impact on our community and change lives for the better.  I hope your 2021 starts off on a fantastic note. As always, we’re here to help with any real estate needs or questions you may have; just give us a call or send an email. Thank you again, and we look forward to hearing from you!

Here’s why so many home sellers are excited about our real estate market.   As we finish 2020, I remember the first Christmas tree I ever had as a child. It was a sad-looking plastic Christmas tree that was stored on its side, but we brought it out every year and decorated it while listening to holiday music. Earlier sunsets and cooler evenings are taking hold as the holiday season ramps up, but that’s the opposite of what’s happening in this extremely hot holiday real estate market. Homes priced according to market value and in good condition are selling quickly, often with multiple offers. That’s what we’ve seen on the last five listings we’ve put on the market. These homes have sold for $35,000 to $40,000 more than their list prices.  “The last time we saw a market this strong was in 2012.” Even during a pandemic, home prices are on the rise. Inventory is so low that there’s not much for buyers to choose from, and there are more buyers out looking because of low interest rates. It’s a very busy market, but there aren’t enough homes to keep up. In 2019, the average days on market for homes was 71. It’s a measure of time from when a home goes live on the market until it goes under contract. In 2020, homes priced below $750,000 are selling in an average of just 30 days. In the $750,000 to $1 million market, that average drops to 25 days. This is a result of an ultra-low supply and record-high demand for move-up homes. Back in October 2019, we had 2,564 home sales. In October 2020, that number jumped to 3,365, a 31% increase. This means that buyers need to move quickly if a home is priced correctly, because they’re selling just about as fast as they can get listed. In order to act quickly, you must be prepared. The last time we saw this strong of a market was back in 2012. In this market, every home is an opportunity, but you have to take the right steps to win. Buying a home isn’t necessarily more challenging in this market, but it requires more preparation. If you have any questions for me about our current market or what you need to do to come out on top as a buyer or seller, don’t hesitate to reach out via phone or email.

Here’s what you should consider before buying an investment property.   Here’s what you should consider before investing in real estate:  1. Who? You must decide whether you’re investing on your own or bringing in a partner. You may not want any exposure or to passively invest in real estate. An alternative option is to invest in a real estate investment trust, such as a mutual option.  2. What? Many of our clients want to invest in something they’re most familiar with—usually either a condo or house. However, buying a multifamily property (e.g., a triplex or quadplex) often brings a better return. There are many types of properties and asset classes to invest in, and over time you may become successful and learn enough about investing to perhaps invest in something larger, like an apartment complex, office building, or commercial warehouse. It all boils down to what you’re comfortable with.  Keep in mind that when it comes to condos, houses, duplexes, or four-unit properties, the buyer is the one who qualifies for the property. If the property involves five units or more, such as an apartment or commercial building, the property itself has to qualify.  “If you want to buy a fix-and-flip, that process can last anywhere from three to 12 months.” 3. When? When do you want to acquire your first property? How long do you want to own it? Look at your horizon and see how your schedule fits. If you want to buy a fix-and-flip, that process can last anywhere from three to 12 months. If you want to buy a property and use it as a long-term rental, you’ll have to factor in the time and cost of remodeling. In our experience with fix-and-flips, if the property doesn’t sell at the target price, we use it instead as a short-term rental until the time is right to sell it.  4. Where? We’ve found that most people are comfortable where they are, but the returns are greater in areas you may not consider living in yourself (or even out of state). You have to find the right balance between your comfort level and profit objective. If you’re considering investing out of state, we have several out-of-state associates who can help you acquire and manage your property.  5. How much? This is arguably the most important consideration to make. After all, you need the capacity to purchase a property. With most properties that have four units or fewer, you’ll have to put about 25% down to buy. For commercial property, you’ll have to put down between 25% and 30%. The Small Business Administration does offer a loan that allows you to qualify for up to 90% of the property’s price.  These factors are just scratching the surface of what you must consider when investing in real estate. If you’d like to know more, get in touch with my team and me and we’d be happy to schedule a free consultation to discuss your short-, intermediate-, and long-term objectives.  We’re passionate about helping our clients achieve their long-term goals, and we can do the same for you. If you have any other real estate questions, feel free to reach out to us as well. We’d love to hear from you.

Here are the three steps all buyers must take to prepare for their purchase.   What do you need to do if you’re preparing to buy a home? Here’s a three-step guide to help you: 1. Decide which area works best for you. You need to know which areas are important to you and why they’re important. Certain areas have fantastic school districts, for example, while others offer more options in terms of nightlife.  2. Understand the capacity to purchase. This means knowing your debt-to-income ratio and credit. I recommend meeting with a lender because they have the ability to provide you with the information that illustrates your eligibility. They’ll also be able to pre-approve you. Who knows—you may get a raise soon or switch jobs. Either of these would increase your home buying bandwidth.  “You need to know which areas are important to you and why they’re important.” 3. Recognize the investment you’d make as a down payment. Many buyers have savings goals they want to reach, but it’s been frustrating for some of them this year because the market has moved up on them. Even though they’ve been saving each month for a down payment, prices keep going up (although interest rates are low). If you’re having trouble saving up enough money on your own, you can do a disbursement from a Roth IRA or use a 401(k) loan. Family and friends can also gift you money to purchase your home.  If you’d like to know more about preparing to buy a home, my team and I have a specific four-step buyer process that I’d be happy to send you. Just give me a call or send me an email. If you have any other real estate needs, feel free to reach out to me as well. I look forward to hearing from you.

Learn the three most common mistakes to avoid during your home buying adventure. We’ve been receiving a lot of questions from homebuyers about what pitfalls and traps to avoid during their search. To prevent you from falling victim to these errors, today I’ll be diving into the three most common mistakes that homebuyers tend to make. The most common mistakes include: 1. Not understanding the “F” word—finances: Somewhere along the line, many homebuyers begin to focus more on the home they want instead of the payments they’ll be making. It’s important to know what your payment will look like, so we suggest consulting with a lender to better understand what your monthly costs will be and what homes you can afford. There’ll be variation regarding down payments, property taxes, and HOA fees, but your lender will clarify specific costs. Additionally, you should never take online mortgage calculators as fact; just use them as a rough estimate. 2. Falling in love with photos: Most agents hire professional photographers who edit everything you’ll see of the property online. The rooms may look bigger, and the upgrades may seem even better. In reality, though, the home may be completely different. It’s similar to online dating—someone’s photo may be so edited that you don’t even recognize them in person (it’s happened to me before). The best way to verify that what you see is true to life is to schedule a virtual or in-person tour of the home.  3. Not clarifying needs vs. wants: It’s a good idea to pin down what you absolutely need in a home compared to what you’d prefer. You may need a certain number of bedrooms and bathrooms or a big yard for a dog, but things like fancy flooring, marble countertops, and lavish bathtubs are just what a person may want. You don’t want to let a house that perfectly suits your needs go because it doesn’t have a chandelier, for example. Those are the three things to look out for while shopping for a new home. There are many more buyers on the market today due to record-low interest rates, so if you’re in this category and are ready to begin your search, reach out to me. I look forward to hearing from you soon.

Here are three tricks to help you sell for more in today’s market.     If you want to sell your house for more money in today’s market, here are the three tricks you must remember: 1. Outreach. You need to have an aggressive outreach program because most agents work in bands, both geographically and in terms of price point. Your goal should be to make every agent with a pre-qualified buyer and every buyer in your price range know about your house. Greater exposure creates more demand.  “Greater exposure creates more demand.” Bigger isn’t always better, but when I search for something online, I could use Yahoo or Bing, but most people use Google. That’s exactly why I joined First Team Real Estate; they have more offices, agents, exposure, and opportunities. It’s the same for each property we represent.  2. Pictures. As they say, a picture is worth a thousand words, and that’s never been truer than it is right now. Ever since the COVID-19 pandemic hit, buyers have depended on listing photos more than ever. There are several tips to remember to make your home’s listing photos appeal to more people, including decluttering, removing personal items, and repositioning furniture to make the interior look more spacious. Technology has come a long way to benefit sellers, so there are several ways to retouch your photos, and you can even stage your home virtually.  3. Pricing. Homes are flying off the shelves due to low interest rates, so it’s important to price your home strategically. If your home is priced strategically in comparison to other homes, it allows you to gain more traction and attract more offers. Buyers are out there looking for homes, and since most homes are selling within a week, they’ll think something is wrong with yours if it stays on the market longer than average. Once your home is hidden from their search, they’ll never look at it again—even if you reduce the price.  We utilized strategic pricing with two of our recent listings, and one of them sold for $6,000 over asking price, and the other sold for $25,000 over asking price. On top of that, these were cash offers with shortened timelines.  If you or anyone you know is thinking of upsizing or downsizing, give us a call and we’d be happy to introduce you to our four-phase seller process so you can win in today’s market. If you have any other real estate questions, feel free to reach out to me as well. I’d love to help.

Here’s a story about how I made a negative experience positive.   About five years ago, I flew into Chicago’s O’Hare International Airport. It’s an airport notorious for delays and cancellations of flights. My story is not very different. When we arrived at the airport, there was a delay at the gate and I missed my connecting flight, the last flight of the evening. I ended up sleeping in the airport. I was extremely frustrated and upset. “Our four-phase process maximizes your sale price.” Last year, I flew out of West Palm Beach and, after mechanical issues, I missed my next connecting flight. In the second instance, though, I realized that no matter how frustrated I was, there was nothing I could do to fix it at the moment. I called the airline, and we found a flight that flew into LA from Miami. So I drove about an hour to Miami via Uber and eventually made my flight from Miami to LA. I ended up getting home before I would have arrived home originally. Right now, there are many parallels to this story and our real estate market. We can’t change the challenges that have arisen during the pandemic, but we can change the way we deal with them and come up with unique solutions to these problems.  We have an extreme seller’s market in most price points. At this time last year, there were over 6,000 homes on the market. Today, there are 61% fewer homes available. Homes are selling with multiple offers and well above asking price right now if priced correctly. For our sellers, we follow a four-phase process to maximize their sale price and ensure we don’t leave any money on the table.  We’ve also been able to help buyers win. We are helping them find homes that are overpriced and not marketed well, and make opportunities out of them. Both of the accepted offers we had this last week were actually below asking price. If you have any real estate needs, we can help you come up with the right strategy to reach your goals. If you have any other questions, don’t hesitate to reach out via phone or email. I look forward to hearing from you.

I’m sharing the top five reasons to love Costa Mesa.   I’m excited to share the five main reasons I love Costa Mesa, California, one of the many areas I service here in Orange County. It has much more than wonderful weather and the yearly Orange County Fair (though those are great too). 1. City of the Arts. Costa Mesa is known as the “City of the Arts.” The Segerstrom Center for the Performing Arts not only includes a 3,000 person opera-style hall for Broadway musicals, but also a 2,000-person concert hall that brings shows and music to the city. It’s an excellent venue to enjoy the very best of Costa Mesa musical arts. 2. Conveniently located. The city has the 405 freeway, 55 freeway, and the 73 toll road. Unlike New York, San Francisco, and London, here, we need a car to get around. However, no matter where you’re trying to go, Costa Mesa has convenient roads to get you there. 3. Close to all the beaches. As a kid, the beach was too far away from where I lived, but in Costa Mesa, no matter where you are, you’re about five miles away from a beach. If you’re looking for sand and waves, they have beautiful Huntington Beach and Newport Beach.  4. The South Coast Plaza. This is the largest shopping mall on the West Coast. Originally, it began as a lima bean field. The first department stores were Robinsons-May and Bullock’s. Every year, 24 million people shop and dine in the plaza. It’s a fantastic place for retail therapy! 5. Amazing restaurants and bars. “Mesa” means “table” in Spanish. You could eat at a different restaurant every day of the year and still not have tried everything. There are also plenty of gyms and yoga studios to burn off the delicious calories.  I would love to hear the reasons you love Costa Mesa and what some of your favorite places are. Please comment below! If you’re considering moving to this exceptional city, call or email us; we love helping people find their place here. Also, contact us if you have any questions about real estate. We would be happy to help you.

You may have heard through the grapevine that home values are dropping, but is that accurate? Here are the numbers that prove this is not the case.   The big question we’ve been hearing lately is, “Are home prices dropping?” The short answer is no. If you look at our market activity over the last 30 days, only 1,142 homes have been listed and 1,750 homes sold. More homes are selling than have been coming on the market, which is keeping prices up.

I’m providing a guide to the CARES Act to show how you could benefit from it.    Recently, many clients have been asking about how the CARES Act works, the $2 trillion that will provide relief to several groups impacted by the coronavirus pandemic. Today I’m covering a few of the main points from the Act. For example, an estimated $560 billion will be given to individual people in need, and $377 billion will be provided to small businesses that require assistance. Senate Majority Leader Mitch McConnell defined this legislation as necessary emergency relief and promised to put partisanship aside to get it done. For individuals, if you earn less than $75,000, you’ll gain $1,200 from the government.

For today’s video, I’m spotlighting the world-famous Wahoo’s Fish Taco restaurant chain by visiting their very first location at 1862 Placentia Avenue in Costa Mesa. Owner/founder Wing Lam started out serving hungry Orange County surfers with just a portable stove right on the beach while he was on academic probation at San Diego State University. After his parents sold their Chinese Restaurant in Newport, they gave him $30,000 to open his first restaurant and the rest is history. The amazing part of this story is that it’s one of the first instances of Asian-infused Mexican cuisine being brought to the market. They also offer vegan and vegetarian options in their menu—all at a low price. Watch the video above in its entirety to get a quick tour of the restaurant and a glimpse of what they offer. The first three people who mention “taco” in the comment section below will receive a $5 gift card from me so they can sample their very own Wahoo’s taco. If you have any questions concerning real estate, please don’t hesitate to reach out to us by phone or email. We would love to help you.

Recently we partnered with Priceless Pets, a no-kill shelter, at a local community event. As a team, the only thing we enjoy more than helping people find homes is helping pets find homes. I interviewed Becca to assist in explaining what Priceless Pets is all about.  “Priceless Pets’ motto is ‘Saving one by one until there are none.’ So, I feel strongly about finding pets great homes as well. We love to work with community partners to help our animals find the right home, just like those in real estate help families find the right home. We are a  100% no-kill shelter. We have dogs and cats mostly, but we do get some rabbits, turtles and other great animals as well.” “The only thing we enjoy more than helping people find homes is helping pets find homes.” “We accept volunteers, donations, and ‘of course’ adoptions. All of our animals are spayed, neutered, microchipped, and have their shots. We love them all, they all have wonderful personalities, and rescuing is a strong choice to save a life. Our animals are unique, many of them are potty trained and trained in other ways.” At 1:25 in the video above, you’ll see some footage from our event, complete with cute animals that can be adopted today!  For more information about Priceless Pets or anything concerning real estate feel free to reach out to us by phone or email, we would be happy to help you.  

Moving up is an exciting topic, but it’s also one that generates a lot of questions from homebuyers. There are three questions, in particular, we get asked most commonly, and asking yourself these questions will help you get a better idea if now’s the time for you and your family to move up.  1. What is my current home worth? There are a lot of factors that go into this, but the majority of offers you’ll receive for your home will be using financing, which means your home will undergo an appraisal.  Aside from knowing what your home is worth, you also need to know what makes it unique and what features make it stand out. It’s not just about how nice your home is and what other homes are selling for in the area—it’s about what other homes people can buy in your community, your city, or the surrounding cities.  2. How do I time the move? Once you know your home’s value, you’ll know what kind of proceeds you’ll get that you can carry into your next home purchase. In this scenario, we create a net sheet for our clients to use. If you can buy without needing to sell your current home first, that makes you more attractive as a buyer because you’re not a contingent buyer. However, the downside is you may have to pay two mortgages at once for a short time. There are strategies around this scenario, such as renting out your home, that we’d be happy to discuss with you further.  “Aside from knowing what your home is worth, you also need to know what makes it unique and what features make it stand out.” 3. What happens if I sell but I don’t find the right home to move into? On our team, we always put our buyers in a strong position. To prevent this from happening, we only accept offers that are subject to you being able to find a suitable replacement property. If you can’t find one, you don’t have to sell. This reduces your risk all around.  Buyers will want assurances that you’re looking for other properties, and once you’ve found the next home you’d like to purchase, that seller will want to know that your current home is on the market and is desirable.  This can be a stressful situation, but certain life events (e.g., a new addition to your family or a job promotion) either necessitate more space or allow you to buy a bigger home. In any case, we’ve created an in-depth guide for moving up that we’d be happy to share with you if you’d like to know more about this topic. Just send me a comment with the words “move up” and I’ll send you a copy.  If you have any other real estate questions I can answer for you, feel free to give me a call or send me an email. I look forward to hearing from you.  

Summer is in full swing here in Orange County, and our real estate market has definitely seen some interesting changes throughout this season. Today, let’s take a look at some of the most notable developments. For one thing, inventory is way down. This July, there were 11% fewer listings available on our market than there were during that same month last year. The number of new listings hitting our market has also slowed, with a growth of just 2% year over year this July. “Buyers, sellers, and investors alike can enjoy the unique opportunities presented by today’s dynamic market.” However, given that homes are still taking approximately 91 days to sell, our market remains fairly balanced. Neither buyers nor sellers have a distinct advantage. This might surprise sellers who have fallen for the myth that summer is the hottest time of year to sell, but the truth is that spring, not summer, is actually the most active season for real estate.  Once spring passes, the rate of home sales (and the rate of new inventory coming to the market) tends to slow down. And activity drops even more significantly by the time fall arrives.   This year, though, low interest rates have prevented our market from slowing down quite so severely as we progress further into summer. This is because demand is rising more quickly than supply, which allows our market to keep moving forward even as fall draws near.  In short: Buyers, sellers, and investors alike can enjoy the unique opportunities presented by today’s dynamic market. Whatever your goals, we would be happy to help you meet them.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

For the past three years, our real estate team has partnered with [Organization] to source backpacks for local children, so that families without the resources to provide them on their own can still send their kids to school with all the necessary tools.  In addition to The Purist Group, we also work closely with local law enforcement to create these opportunities year after year for our area’s youth.  I like to think of our impact on the community as being similar to the old folk tale of the young boy throwing starfish back into the sea after a storm. In the story, thousands of starfish have been stranded on a beach. The boy throws back as many as he can, but is obviously unable to save them all. As he’s working to help the starfish, an old man approaches him and says, “You aren’t making a difference. You can’t save them all.” “Every good deed matters.” Throwing back another starfish into the sea, the little boy looks at the old man and says, “I made a difference to that one.” In this same way, even knowing that we can’t help every child in America, our team is proud to know that we are making an impact at all. Every good deed matters. One local woman, a special education teacher named Karina, exemplifies this point.  Three years ago, it was Karina who came to us with the idea of beginning our now-annual backpack drive. Fast forward to this year, and we’re about to donate 2,000 supply-filled backpacks to children in our community. Katrina’s idea has grown into something amazing, and each of us has the capacity to make a difference, just like she did.  In our real estate business, for example, we strive to do this every day. More than just selling properties, it’s our mission to connect families with their next home. The bottom line is that there are many ways to make a difference. Even something as simple as smiling at a stranger or holding open a door for someone has a positive impact.  If you have any other questions about today’s message, would like more information about how we can serve your real estate goals, or would like to talk about other ways to give back, feel free to give us a call or send us an email. We look forward to hearing from you soon.

A recession is looming, but there’s no reason to believe it will look anything like the crash of 2008.   The stock market is close to all-time highs, unemployment is extremely low, and inflation is still seemingly in check. And yet, this might be the last party before the crash.  A recent Wall Street Journal poll of 73 economists found that the majority believe a recession is coming in 2020. Current homebuyers in the market echo these predictions, with 70% believing a recession will come in the next few years. What does this mean in terms of our housing market? Nationwide, home prices continue to slow in growth. On top of that, the number of homes sales has slowed down too. This reminds me of the time between 2006 and 2008, but do we automatically think history will repeat itself? I don’t think so, and there are a couple of reasons why. First of all, unlike in 2008, there aren’t a ton of bad mortgages out there. Back then, practically anyone could qualify for a mortgage. These days, a lot of rule changes have been implemented to protect the future of the housing market.  “A lot of rule changes have been implemented to protect the future of the housing market.” Second, the looming recession will not be an exception. In recessions past, the housing market as a whole wasn’t affected the way it was in 2008. In my opinion, homes that are still desirable will continue to sell—even in a recession. Homes that are overpriced, don’t have the same features as the rest of the homes, or are somewhat affected by this recession will take longer to sell. That’s just the reality of the situation.  If you’re a home seller, this means you need to focus on your needs, goals, and circumstances. After that, examine the market environment and look toward the future to see what makes sense for you. If you’re curious what your Orange County home is worth, you can use our home value calculator right here on our website.  If you’re thinking of buying a home and are wondering if now’s the time to do it, you need to figure out what your short-, medium-, and long-term goals are. It might be in your best interest to rent, but it’s a good idea to get a feel for the available inventory before you make a final decision. Whether you’re looking to buy, sell, or invest, everyone’s needs are different, so if you have any more questions about our current market and how it affects you, don’t hesitate to give me a call or send me an email. I’d love to speak with you and help you reach your future goals.  

Real estate investing is hotter than ever, and it’s no wonder why.  Mortgage rates are low, home prices continue to grow, and demand for rentals is strong. But if you’re interested in investing in real estate, where do you start? And what do you need to know? Here are five crucial tips I’ve gathered from successful real estate investors to help you out: 1. Don’t stick to your own backyard. Many fledgling real estate investors limit their search to neighborhoods they know well. This might cut into your potential for profit. The best deals might be a bit further away, and emerging neighborhoods might offer better growth potential and tax incentives. 2. Use the 1% rule. A good rule of thumb for real estate investing is to look for properties that will offer a monthly return that is greater than 1% of the sales price. In other words, if a home costs $100,000, you should only invest in it if you expect to get at least $1,000 a month in rent. “It pays to know the many possible tax benefits associated with real estate investing.” 3. Don’t over-rehab. An investment property doesn’t have to look like a Pinterest photo shoot. Instead of trying to convert an investment into your dream home, go with middle-of-the-road fixtures—and save yourself both time and money. 4. Look to single-family rentals. Single-family homes tend to consistently appreciate. They are also most likely to attract good tenants, and they are something you have direct experience with—and can evaluate personally.  5. Understand the tax benefits. It pays to know the many possible tax benefits associated with real estate investing. These include deductions for depreciation, mortgage interest deductions, and maintenance, as well as the benefits that come from investing through qualified plans like self-directed IRA accounts. Now, these five tips are valuable—but they are only a start. If you’re seriously considering real estate investing, I’d advise you to first take a look at some of the great homes available around the Orange County area. And if this gets your investment appetite going, give me a call. There are two reasons why.  First, I can give you my impressions about which types of homes (and in which neighborhoods) might make for a sensible first investment.  Second, I can also point you to other professionals I personally trust—mortgage brokers, tax advisors, contractors—who can help you make that first investment profitable with the minimal amount of fuss. If you have any other real estate questions, feel free to reach out to me as well. I’d love to help you.

If you’re in the market to buy a new home, I’ve got some advice for you today. Here are the top things you should take into consideration before making the plunge: 1. Location, location, location. You’ve probably heard this phrase before. When you’re looking at a new home, it’s important to know where you’re at and what school district you’re in. Even if you don’t have kids, the future resale value of your home is going to be affected by the district it’s in. Also, how close is the home to local shopping, dining, and entertainment options? These are all things to consider. 2. Financial commitment. Real estate is a long-term investment. If you want to move in a few years, you might want to consider renting instead. Having your money tied up in a home is not a great short-term investment.  3. Running the well dry. Most buyers spend every penny that they have to get into their new home, especially first-time buyers. Even though we’ll make sure you have a home warranty for your first year, it’s important to have a home savings fund for any repairs or maintenance that happens outside of that. “These are just five of the things that you need to consider.” 4. Loving your space. The reason that you want to love your space is that it’s not just the indoor area that you’re going to enjoy. You’re going to want to set up an entertainment area or spend a nice night in the backyard. However, if you’re busy, you might want something a little lower maintenance like a townhouse or a condo.  5. Untapped potential. The truth is that there are a lot of different neighborhoods, but finding one that’s undergoing a renaissance is ideal. You might be able to find a home at a great price in a neighborhood that’s a little rough at the moment, but you’ll have the opportunity to be part of something great going forward as the neighborhood grows, improves, and changes. These are just five of the things that you need to consider as a buyer. If you need help in your home search or just have any questions at all about the process, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

As home buying season really kicks off, sellers are in a prime position to earn top dollar—that is, assuming they take the time to properly prepare their properties for the market.  If you want to sell quickly and for a great price, you need to make sure your home is in the best possible shape before you list it. But not all home upgrades are worth making.  Today I’d like to share a list of three projects that will bring a high return on your investment so that you can avoid wasting money on projects that won’t.  1. Improve your curb appeal. A fresh coat of paint and some landscaping can go a long way. The way your home looks from the outside serves as a buyer’s first impression, after all. Updating your curb appeal tends to cost between $3,000 to $5,000—an amount you’ll more than likely earn back (and then some) because of the positive impact this upgrade has on buyers. If you need design ideas, check out local new construction properties in your area. This will help you understand current popular styles, color palettes, and more. “If you want to sell quickly and for a great price, you need to make sure your home is in the best possible shape before you list it.” 2. Upgrade your bathrooms—but not too much. Mid-range bathroom upgrades bring about $1.71 for every $1, while high-end bathroom upgrades could actually hurt your bottom line. In other words, you need to choose your projects carefully. Adding in dual sinks, swapping out flooring, and changing out cabinets are all good upgrades to make, but make sure you don’t choose the most expensive options for each of these projects. Otherwise, your bathroom will look out of place compared to the rest of your home.  3. Install new windows. Mid-range, energy-efficient windows can bring you $1.15 return for every $1 spent. Not only do these new windows look nice, but they will also help your home’s new owner save money on their energy bills.  If you have any other questions or would like more information, feel free to give me or my team a call or send us an email. We look forward to hearing from you soon.

First-time homebuyers often focus on two things: the price of a home and the monthly payment they’ll be bound to after purchasing it. This is quite understandable. However, there’s one more thing you need to consider when buying a house: the future value of the property. In a nutshell, appreciation, or the increase in prices over time, is how a majority of wealth is built in real estate. That’s why homeownership is a great, stable, long-term investment. There are ultimately two ways to take advantage of your home’s equity: actively and passively. “Homeownership has traditionally been one of the most stable opportunities to build wealth.” By paying off a mortgage during your working years, you actively eliminate a big expense from your plate during your retirement years.  What’s more is that if you’re not great about having a savings plan, owning a home is a great opportunity to passively create a financial cushion that renting can’t. If you start when you’re young, it gives you a longer opportunity to create wealth. Now, owning a home doesn’t necessarily guarantee that you can have a greater net worth, but homeownership has traditionally been one of the most stable opportunities to build wealth. Obviously, real estate values do fluctuate over time, but it’s still a great vehicle for stable growth for many people. It gives you an opportunity (and a structure) to build wealth.  After all, a home isn’t just four walls that provide you shelter—it’s a place for you to grow. If you’re interested in buying, selling, or investing in real estate, feel free to reach out to me. We’re here to help you make the right moves every step of the way. I hope to hear from you soon!

Spring is here, and if you’re a buyer, there are plenty of things to love about buying a home right now. However, there are also a few things to hate about the spring buying season. I recently came across an article from Realtor.com that outlines all the major positives and negatives you need to be aware of before taking the plunge. To read the full article, click here.  In the meantime, here are some of the main points to take away from it. Things you’ll love: Increased inventory. There are more homes to choose from, so you need to focus your time effectively and distinguish between areas you love and areas that are less desirable.  More open houses. As more and more homes hit the market, there are more and more open houses taking place that give you a great opportunity to match what you see online with what you see in person and size up the competition from other buyers. As always, use your time effectively when sightseeing open houses. “You need to focus your time effectively and distinguish between areas you love and areas that are less desirable.” Things you’ll hate:  More competition. This means you need to fine-tune what you’re looking for and make your choices quicker. In an active market, new listings don’t even make it to their first open house before they’re snatched up.    Time-related pressure. Like I said above, you’ll have to make decisions quicker in this market. If you have to sleep on it, odds are, you won’t get to sleep in it. Doing as much prep work up front as possible while working with an agent who has their finger on the pulse of the market will help tremendously in this regard.    Increased prices. It all boils down to supply and demand. If there’s a lot of demand and many different buyers vying for the same homes, prices will go up.  If you have any questions about buying in the spring or you have any other real estate needs I can take care of, don’t hesitate to reach out to me. I’d love to help you.

With the onset of Daylight Saving Time, the times have changed, and so has the spring market. There are currently 44% more homes on the market than there were last year at this same time, increasing from 4,420 to over 6,000 homes. Overall, demand for housing has picked up, rising 91%. A big portion of that increase can be attributed to our interest rates, which are directly entangled with housing demand in the market. Interest rates peaked during the worst time in 2018—right around the holidays, rates hit 5.05%. As of this video recording, rates are only at 4.45%. What does this mean for you? For buyers, it means you have 10% more buying power than you did just four months ago. “Our current market is different from previous years, but that also means there are different opportunities to take advantage of.” For sellers, it means that your home is a little more marketable and, more importantly, more affordable to potential buyers at the same time. We can’t say for sure what will happen this year, but we do expect that market times will continue to decrease as spring approaches and that inventory will continue to grow. The current average days on market is 140 days, which means we’re in a different market entirely compared to last year. In past years, there was a quick run-up of multiple offers on every home, but these days, you’ll need to be a little bit more selective: Market aggressively, but also be sure to price your home in a way that will get the most attention from buyers in the shortest amount of time. No matter if you’re looking to buy, sell, or invest in real estate this year, feel free to reach out to us. We’d be happy to provide you with all the information you need to make the right moves.

One thing we’re noticing in the world of real estate design trends is that there’s a shift occurring. Modern styles are becoming more popular where rustic was once en vogue. For colors, blacks, mattes, and grays are wending their way into the forefront of the market. Even though modern styles are resurging in popularity, that doesn’t mean that rustic designs will disappear altogether. Instead, the two styles will meld together. Rustic chic will incorporate more modern colors, as well as asymmetry. We’re also noting a focus on effortlessness in regards to technology these days. Products like Google Home, Amazon’s Alexa, and Apple’s HomePod will undoubtedly impact home design. The way that we’re experiencing our homes is different in today’s world, and it’s helping us modernize and automate our lives just with the sound of our voice. It’s expected that we’ll see a continuation of the industrial focus in home design, with matte black and bronze really complementing the industrial look. Colors like grays and moody blues will continue to demand top dollar in the market when you’re selling your home or setting it up as a vacation rental. HGTV’s popular show “Fixer Upper” really ushered in the farmhouse chic look. However, one thing we’ve seen is that the farmhouse door made with reclaimed wood (popularized by the show) is giving way to the same farmhouse barn door, though refined with a modern appeal—you can expect wood that’s been more squared out, as well as more glass and metal accents. “Colors like grays and moody blues will continue to demand top dollar in the market when you’re selling your home or setting it up as a vacation rental.” Bold, trendy colors like ‘millennial pink’ that were all the rage a couple years ago are slowly moving out, making room for more earthy tones and other colors that can appeal to a wider audience, from light gray to matte black. Whether or not they inspire you personally, these are the colors that will help people stand out in multiple markets. When you’re thinking of selling your home, you need to show it at the very top of your game, which means appealing to a broad audience. If you have any questions about this or are thinking of selling your home, reach out to us. We’ll do a first-time walkthrough of your home and give you some ideas of things you can do to really make your home pop so that buyers will be drawn to it. I hope to hear from you soon!

When it comes to buying a remodeled home, there’s usually more to it than meets the eye. Here are five tips to help you avoid buying a remodeled home that might be more than what you bargained for: 1. Make sure all of the major systems work. Having new floors and counters is great, but if you have to replace the home’s heating system or electrical system, that might cost you more than the remodel itself. 2. Make sure the kitchen doesn’t disappoint. A good way to make sure the builder didn’t cut corners in this area is to double check that the backsplash is even. 3. Make sure there was attention to detail in the bathrooms. If they remodeled the bathrooms, you need to make sure they invested heavily in them—not only with high-end tile, but also with new supply valves, shut-off valves, trim rings, etc. This will tell you whether they finished the job or not. 4. Make sure the home is on even footing. Poorly installed laminate or hardwood can buckle and pop over time. A good way to know if your floors are even is to kick off your shoes, slide across them, and see if you catch any corners (think of Tom Cruise in “Risky Business”). 5. Make sure they took pride in the work they did. A good way to do this is to check the molding in the corners and frames of each room. “Having new floors and counters is great, but if you have to replace the home’s heating system or electrical system, that might cost you more than the remodel itself.” As a Realtor, I’ve seen just as many terrible remodels as I’ve seen great ones, so if you have any more questions about how to tell if a remodeled home you’re thinking of buying is a good investment, don’t hesitate to reach out to me. I’d love to help you.

I recently read an article in The New York Times titled, “Why Do All Home Repairs Cost $1,000?” The author was complaining that it didn’t matter much what went wrong at home—be it a leaky faucet, broken garage door, or failed water heater. In each case, the bill came out to at least $1,000.  Most homeowners underestimate the costs of various home repairs, often by as much as four times the actual cost. Can anything be done about this? Here are three recommendations to help you deal with home repair costs: 1. Save for a rainy day and create a special account for repairs. The average homeowner spends $2,000 a year on maintenance. As a homeowner myself, I have a tax fund, a “happy fun day” fund, and a rainy day fund. When you use the rainy day fund to pay for your repairs, you’ll be in a much better financial position.  “Sometimes it can make sense to look for a new home that won’t require frequent repairs.” 2. Enjoy being a homeowner. $50 in parts and a YouTube tutorial or a Google search will be enough to repair most home maintenance issues, so try focusing on the smaller, simpler fixes yourself and delegate the more complicated ones to the professionals.  3. Negotiate smart. This means getting multiple quotes from different professionals so that you get the best price. Also, don’t pre-frame the cost of a repair. A lot of contractors will agree to do something for $1,000 if you assume it costs that much, but not everything does, so don’t automatically pay them $1,000 for a job that doesn’t cost nearly that much.  Of course, if you reach a certain point where you’re constantly needing things fixed, it might just make more sense to look for a new home that won’t require frequent repairs.   If you’re considering buying or selling a home or if you need recommendations for contractors to fix those things you don’t want to deal with yourself, give me a call or send me an email today. I can recommend several reliable businesses and I’m always here to help. 

Today we’ll be going over our latest market numbers, as well as recap what we’ve seen throughout the year. 2018 had an incredible start with a limited amount of inventory, record-breaking prices, and multiple-offer situations for nearly every property sold. This is a stark contrast to today. Currently, homes spend an average of 127 days on market—the longest since the recession we saw in December 2010. Though our market has definitely shifted, it’s a normal shift for it to go through. Interest rates peaked on November 7 at 5.05%, but have since lowered to 4.74% as of December 15. This means buyers have more buying power and the demand for homes should increase. “Though our market has definitely shifted, it’s a normal shift.” Inventory is up 59% from this time last year. Sellers need to ensure their homes are in top shape for showings and are priced competitively. Buyers, you have a lot of options right now, and you also have the room to negotiate a good price on a home. Whether you’re looking to buy or sell a home, have any questions, or need more information, feel free to reach out to me. I look forward to hearing from you.

One thing that some people don’t know about me is that I actually worked for the REO Division at JPMorgan Chase. ‘REO’ means ‘real estate owned’; we dealt with the bank-owned foreclosed properties. Since then, I’ve been able to help a number of clients successfully purchase foreclosed homes.  Sometimes, however, foreclosed homes are more than people bargain for. Every foreclosed home is sold in as-is condition, meaning that no repairs will be done. This is why it’s very important to have a thorough and effective property inspector go through all the major systems, including the plumbing, electric, water, and HVAC systems. These are all things that could end up costing a lot of money to repair if they’re not in good shape. Additionally, don’t forget that California is termite country, so be sure to have pest control come through to look for signs of potential infestations. When a home is foreclosed upon, sometimes there are unpaid contractor liens, homeowner association dues, and tax liens on the property. These are all things that will come up on the title report, so it’s a good idea to review that to be sure there aren’t any nasty surprises. It should come as no surprise that when a home is foreclosed, the seller may not have left on the best of terms. Sometimes, fixtures have been removed or there are other damages on the property. I once purchased a foreclosed property myself; all the toilets removed, door handles were missing, windows were broken, and there were holes in the walls. It’s wise to go into a foreclosure home purchase understanding that these types of things are typical. “It should come as no surprise that when a home is foreclosed, the seller may not have left on the best of terms.” Because these homes have often been vacant for a long time, it’s also smart to get a home warranty. That will protect you for all the major systems in the home, and it offsets some of the costs you might be incurring when you buy one of these properties. In the previous downturn of the market, foreclosed homes were plentiful and often ignored. However, in our current market, there are investors that are specifically looking for these types of properties. This can lead to frenzied bidding wars that raise the price up to market value. Be sure to review all other relevant sales in the area that are comparable in neighborhood and in the content of the property. The bottom line is that there’s definitely an opportunity to get a value when purchasing foreclosed homes if you’re educated and have someone on your side who knows the ins and outs of what to expect. I purchased a home at $45,000 below market value, after which, I invested about $30,000 in upgrades. Recently, we closed on a home that was worth $800,000 for the neighborhood, but we got it for $750,000. If you do your homework and then create and execute a smart plan for pursuing a foreclosed home, you can definitely be successful. If you have any questions about foreclosed properties, you are encouraged to reach out to me. I’d be happy to help you.

To fully understand what I mean for today’s topic of bad real estate photos, follow along in the video above, or use the timestamps I’ve provided below to navigate the video at your leisure: 0:20—Distracting colors on the walls. Lurid wallpaper or paint can make a room look even smaller. To counter that effect, use lighter, more neutral colors. 0:50—Mirrors above the bed. This look reminds me of the first time that I went to the Tropicana Hotel; I’d recommend something more neutral and less reminiscent of Las Vegas. 1:20—Upside down photos. I was initially very confused about this photo; how and why did the homeowner manage to install an elevated washing machine? Then I realize they had uploaded the photo to the MLS upside down. You only get one chance to make a first impression, so double-check your photos before making this mistake. 1:45—This photo looks like every horror movie I’ve ever seen was filmed here. To make it less creepy, I’d move the sparing items on the right and showcase the floor to brighten it up. 2:20—Carpet in the bathroom. Alone, carpet in the bathroom is a turn-off for buyers, but this photo really takes it over the top: They not only have a toilet, but also a bidet and a sitting chair all in the same bathroom. This photo should have focused on the countertops and less on the urinal in the middle of the room. 2:50—A woodsy, surf-and-turf disaster. Instead of focusing on the mounted deer head, marlin, and monkey, the photographer should have focused on the room, instead of the just the corner in which this odd arrangement of mounts. If taken from a different angle, the photo could have shown off the room’s size or flow and helped a potential buyer appreciate the space more. “Alone, carpet in the bathroom is a turn-off for buyers, but this photo really takes it over the top: They not only have a toilet, but also a bidet and a sitting chair all in the same bathroom.” I always tell my sellers that you should always want to make sure the home speaks to as many buyers as possible. The sound of one tree falling is always going to be louder than a thousand trees growing, so eliminate those things that may turn people off and focus on things that will appeal to more people. If you have any questions on home staging or about how to make your home appeal to a wider audience, please feel free to reach out to me.

Julie Hudash started Team Kids 18 years ago in part because of her own children. She wanted them to have the opportunity to know that they were powerful, to understand that the community was counting on them, and to be exposed to critical issues in the community. She started the organization to let all children learn that they’re strong enough to make a difference in the world. Since its founding right before September 11, 2001, Team Kids has accomplished a lot. Julie’s proudest achievement in that time has been orchestrating the Team Kids Challenge Program, a month-long early-intervention program run in public elementary schools by both staff and trained police and firefighters. They spend the duration of the program learning about homelessness, hunger, kids with terminal diseases, and how to support our troops. The program is run in Orange County, Los Angeles, and Arlington, VA; just this spring, they launched the program in New York City. Julie is proud to mobilize our youngest citizens to become change-makers, to connect with social issues, and to create a country that truly invests in our kids and puts our resources where our words are. “Julie started the organization to let all children learn that they’re strong enough to make a difference in the world.” We have recently partnered with Team Kids to develop a new program here in Orange County: The Superhero Program. Modeled after the Team Kids Challenge Program, the Superhero Program serves to involve children with their communities to create a positive impact by learning how to support their heroes, the hungry, the homeless, and those who have undergone tragedy. With each project, they earn stickers and are eventually launched as superheroes to address key issues. If you’d like to learn more about the Team Kids organization and see what they’re doing to create change in their communities, visit www.TeamKids.org and follow them on Facebook, Instagram, and Twitter. If you think your children would be interested in participating and becoming superheroes themselves, or if you have general questions for me about real estate, please feel free to reach out to me. I hope to hear from you soon.

What questions should you be asking your mortgage lender? Today I’ll discuss eight of them. 1. “What type of loan is best?” This depends on your scenario—how long you plan to own the property, if it’s a primary residence you plan to live in for a long time or if you plan to rent it out at some point. 2. “What is the interest rate and annual percentage rate (APR)?” The interest rate is the rate the loan is at, but once you include the cost of obtaining, that is how you get the APR. It’s a better indicator of the overall costs. 3. “What are discount fees and origination points?” This is a percentage of the loan amount, and its often between a quarter of a percent and 1%, depending on the loan amount you obtain. In a way, it’s prepaid interest to buy down your interest rate. It’s also another expense related to your loan, so review it accordingly. 4. “What are all the costs?” There are discount points of origination fees, application fees, appraisal fees, and others besides the costs of general homeownership. Be sure to ask for a detailed list of fees so you can review them and plan accordingly. “It’s a better experience when they can approve the loan in-house because it’s much faster; they can walk over to an underwriter to review the loan directly at that time.” 5. “What is a loan estimate?” This is a breakdown of all the expenses related to obtaining the loan. 6. “Do you offer rate locks?” Sometimes you can obtain a rate and your lender can lock it for a period of 30 days, which is the average escrow timeline to close. However, they’ll also sometimes float the rate, meaning they can’t lock it until it’s been approaved. This means that if the interest rates go up during that time, you’re at risk. 7. “Do you offer in-house loan approval?” It’s a better experience when they can approve the loan in-house because it’s much faster; they can walk over to an underwriter to review the loan directly at that time. 8. “How long is it going to take to fund the loan?” This is important especially in the case in which you’re purchasing a house and you only have 30 days to accomplish the transaction. If you’re just refinancing and looking to reduce your payments, 60 days is the average time. You will want to review this with your lender to make sure. If you have any further questions about loans, please feel free to reach out to us. We have access to some of the best loan specialists to help you.

Having a home security system comes with both benefits and drawbacks, and if you’re thinking of getting one for yourself and your family, there are a few facts you should know before making a decision.  A study by HomeFacts found that just having a theft deterrent was beneficial, but one of the main reasons homeowners decide against getting a home security system is the cost involved—there’s usually an upfront setup fee and ongoing maintenance costs. Between these two expenses, the overall cost of a home security system can vary widely.  “The average home break-in costs $1,725” Having a home security system should go beyond providing peace of mind and also make sense in terms of dollars and cents. An FBI study found that the average home break-in costs $1,725 in terms of stolen valuables and damage. Another study also found that one in four homes is likely to be broken into.  These days, there are plenty of programs that are less expensive relative to the amount of monitoring you get in return. You can also purchase an ongoing monitoring system so that when a door or window is open, the police are automatically notified. It’s all a matter of deciding which option is best for you. If you’re curious about the best kinds of home security systems out there or you have any other questions about this topic, feel free to give me a call or send me an email. I’d be glad to help you.

Is there a housing crash on the horizon? We don’t think so, and there are eight key reasons behind our perspective:  “Right now, loans are of higher quality than they have been since before the last crash.” The state of subprime loans. Before the crash in 2008, subprime loans constituted $620 billion and made up 20% of the total mortgage market. Today subprime loans account for just $56 billion (5%) of the total mortgage market. Right now, loans are of higher quality than they have been since before the last crash.  Credit scores have increased. Over the last 15 years, FICO scores have been steadily rising. In 2009, the average credit score for borrowers seeking a loan was 686. In 2001, it dropped down to between 490 and 510. Since then, though, we’ve seen significant improvements.  Lending is far more strict. CoreLogic’s Housing Credit Index reports that loans originated in 2016 were of higher quality than any filed in the last 15 years. Tightened lending standards have reduced the impact of fix-and-flip investors. Currently, lenders only finance 55% of home value in the “flip” market. This is a major shift from the 80% or more banks lent out during the subprime crisis.  The number of homes sold right now is 20% below the pre-crash peak. Right now, there’s less than two months’ worth of available inventory in Orange County.  Young people are having to save more money due to the past recession. As a result of this, homebuyers are submitting larger down payments in recent times, which provides an additional level of security in their real estate investment.  Total home equity is still significantly lower than in 2006. Instead of an explosion of home values, recent growth has been steady. There was $85 billion in equity in 2006, and today there is about $14 billion.  Home prices today make sense if you factor in inflation. Between 2012 and 2017, home prices have risen 6.5% per year on average, and surpassed their 2006 peak as a result. However, these increased prices actually indicate an adjustment for the 11 years of inflation we’ve seen. Home builders are focusing on high-end properties. This is likely due to changes in demand, but the question of whether demand is stronger today than in the past is one no one can definitively answer.  The bottom line is this: No one has a crystal ball, but looking to recent market data and forming an educated perspective based on that information can help you gain a general sense of where things may be headed.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

Earnest money deposits are a crucial component of any real estate deal. This sum shows sellers how serious you are about purchasing their home, so today let’s discuss a few of the most common, and most crucial, questions people have on this subject: What is an appropriate amount to offer when submitting an earnest money deposit? On average, a good earnest money deposit should be between 1% and 3% of the total purchase price. This will, however, depend on your area.  “If a real estate deal proceeds without issue, the earnest deposit will be applied toward your down payment or closing costs.” When is the earnest money deposit due?  As a general rule, earnest money must be submitted within three days from the time you sign the purchase agreement.  Where does the earnest money deposit go after it’s been submitted? Earnest money deposits will be held by the bank in a third-party escrow account until closing. How do you get the earnest money deposit back? When you sign a purchase agreement, certain contingencies will protect you against losing out on this deposit. So long as you don’t violate the terms of the contract, the earnest money deposit can be refunded to you if you withdraw from the deal within the due diligence period. If the deal proceeds without issue, the deposit will be applied toward your down payment or closing costs.  If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.