San Diego Real Estate Blog Gary Kent Team

“We really want to sell our home, but we owe more than our home is worth. What options do we have?”

***ANSWER:
A. Do Nothing / Don’t Sell
That’s an option, though it may not work for you.

B. Come Up With The Difference
Again, this may not work for you, but it’ll save your credit and get you out of the home.

C. Do A “Short Sale”
Get the lender to agree to take less than what they’re owed in order to allow a sale. It’s not easy and has several downsides.

D. Foreclosure
I’m definitely not advocating this, but for some people it’s the only or (dare I say) best option. Obviously, it would severely damage your credit. Not-so-obviously, for owner-occupants in some cases it results in a tax bill for “cancelled debt”.

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“I know the seller has to fix health and safety items, but don’t they also have to fix code violations?”

***ANSWER:
No, no, and no.

There are very few physical requirements a homeseller in San Diego County is legally to fulfill, and they don’t include health, safety, or code items.

Here’s the short list:

1. Operative smoke detectors in all sleeping areas
2. Earthquake straps on the water heater

That’s it.

But, you might ask, what about termites and toilets? Don’t you have to take care of those?

No and no.

There is no law requiring a termite clearance, though it is typically expected by homebuyers and agents.

And the City of San Diego used to require toilets to be low flow at closing. That was changed many years ago, allowing the seller to “transfer responsibility” to the buyer, who had to comply within 30 (60?) days. To agree, most homebuyers expect some form of credit.

Buying A Home In San Diego

“We’re interested in a foreclosure you have listed on XXXXX Road. But we just wasted a lot of time trying to buy two short sales and don’t want to go through that again. Is this also a short sale?”

***ANSWER:
Here’s the sad and scary thing: The person who asked this question is a real estate agent!

A short sale and a foreclosure are two entirely different things.

A short sale is where the proceeds from selling a home are less than what is owed on the mortgage(s). So the bank must be convinced to take this lesser amount…which usually takes about 2 months and is successful about 1/3 of the time. Banks REALLY don’t want to lose this money.

A foreclosure is owned by the bank, who REALLY want to get the property off their books. The sale none of the red tape, delays, or likelihood of failure.

If you’re buying a home, just remember this shorthand:

Short sale = bad.
Foreclosure = good.

San Diego Foreclosure Hotlist

“Hi Gary. With all the dangerous loan programs out there, do you think the safest thing is to get a basic 30 year fixed loan?”

***ANSWER:
I’m about to say something you and many people will disagree with:

There are NO dangerous loan programs.

Not one.
Not the pay-option ARM loans.
Not the short-term adjustable loans that adjust up in 2 years.
Not the negative amortization loans.
Not the zero down loans.
Not the loans to people with bad credit.

Yes, these are the very same loans that people have had and been unable to pay their mortgages and have lost their homes.

But here’s what I mean…

All of these loans can work just fine for 98% of the people who plan ahead, leave enough of a margin, are realistic about their abilities, and set aside money for a rainy day.

And all of these loans can be fatal for 98% of the people who don’t. (Understand: I am not blaming or judging anyone. Those in this group are certainly not “bad” people, though they may be bad planners, etc.)

Now that I’ve gone off on that tangent, perhaps I’ll answer your question!…

A 30-year fixed rate is 100% predictable, so for many people that may make it the safest loan. Though it’s typically also the most expensive.

A fairly safe compromise for many people is a 5-,7-, or 10-year adjustable.

These loans are fixed for the 5, 7, or 10 years, and then they adjust. And since the average person owns their home for something like 7 years (I’m guessing, but it seems about right), it can be a way to have some stability and get a slightly lower rate.

That all being said, if you need a home loan and don’t have a good lender, I have a great one. Call my office at 858-457-KENT and I’ll put you in touch with him.

San Diego Real Estate

“What do you think of having a contractor inspecting my home before I put it on the market?”

***ANSWER:
It’s a GREAT idea.

The one and only downside is it’ll cost you about $350. But the many benefits to you include:

1. If there are any health or safety items, you can have them fixed now, while you’re living in the home, so you and your family are not personally at risk.

2. You can have the inspector correct any mistakes in the report. They DO occasionally make mistakes.

3. It eliminates a huge cause of concern, worry, fear of the unknown.

4. As you’re not in a rush, you have the time get several bids and potentially save money.

5. A clean report is a clean bill of health and will help you with your marketing.

6. Depending on what they are, you fix several items and “brag” about them in your marketing, helping you get a higher price.

7. You’ll know much earlier how much you’ll net from your sale.

8. Having an inspection in hand may make a nervous buyer more comfortable about making an offer.

9. You can shorten the buyer’s inspection contingency period.

10. Dealing with the report helps eliminate the biggest reason homes fall out of escrow.

11. Having your buyer sign off on the report lessens your liability as you have proof that problems have been disclosed.

Buying or Selling a San Diego Investment Property