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"I'm going to wait for prices to go down before I buy." We've heard that before. Here's why that's not a good idea

by Southern Californias Top Producing Mother & Son Te

We have been doing a lot of open houses on our Listings lately.  Part of the reason we like doing them is because it gives us a time to be able to meet buyers face to face and let them know in person the benefit of buying real estate, but also the benefit of buying in this market.  We take the homes that we sell very seriously and we give our all when trying to sell the listings we take for our sellers.   

Recently we were hosting an open house at a home that we currently have for sale on Dolan Ave in the city of Downey.  The very first buyer that came in made this comment after we asked them if they were interested in putting an offer on the house, “I’m just looking, I’m going to wait for prices to drop even more before I decide to buy.”  It is pretty much guaranteed that at least one person throughout the day will make a comment like that.  The following is how we respond to buyers with that mindset:

First off, there is no guarantee that prices will drop even further.  Prices have already dropped about 50% from their peak point and current MLS figures show that there is a leveling off of home values.  So as of right now, we are at a point where yes prices can go lower, but they also have the potential to begin an uptrend.         

Secondly, what is one of the most important things to a homeowner?  The payment!  In the end what matters, how much you paid for the property or what you will be forking out of your pocket per month to pay back the loan you’re about to take?  Let’s look at the numbers…Currently the rate for a 30 year fixed mortgage is about 4.5%.  Let’s say the buyer is going with the most common type of loan in this market right now, FHA 3.5% down payment and they are purchasing a property for $250,000.  With everything included, taxes, insurance, and MI, the total out the door payment comes out to approximately $1,620.90.  Now let’s say the buyer was correct in his hunch that home values were going to go down, and let’s just say that home values went down another 10%.  So the same house that was worth $250,000 is now worth $225,000.  Historically interest rates are lower than they have been in decades so we know that they are not going to stay at 4.5% for very long.  So let’s say rates went up to 6.0% and let’s say that you decide to buy now.  The payment with the same scenario as above except with a purchase price of $225,000 would be $1,664.98.  The payment actually went up about $40 if you bought the property at $225,000 rather than at $250,000 with a lower interest rate.

So all in all, we see with this example that it is actually better to buy a home NOW rather than wait, assuming prices will go down further.  Not to mention you will be missing out on all the tax benefits of owning a home while you’re waiting for prices to go down. 

The numbers speak for themselves.  If you’re thinking about buying, don’t wait any longer.  The figures don’t lie, it truly is a benefit to buy now rather than wait.  Give us a call!  

Families in need of Back Packs for their Children

by Southern Californias Top Producing Mother & Son Te

Families in need of Back Packs for their Children
!!!!







Are you or anyone that you know in need of a back pack for your child to start out the new school year???


State Farm Agent Ena Alcaraz is partnering with Prudential and Maria Palacios (Mother & Son Team) to provide backpacks and school supplies for children in the Bellflower, Pico Rivera, Montebello, Whittier, Downey, Long Beach, and surrounding communities.  

If you know of a family in need please call Chris Gonzales or email at MotherAndSonTeam@Mother-SonTeam.com.

 

Families must be pre-registered and must be available to pick up back-pack on:

Date:  Friday, August 27, 2010

Time:  11am-2pm

Location:  8527 E. Alondra Blvd Paramount, Ca 90723

What buyers and sellers are paying for in Title Insurance

by Southern Californias Top Producing Mother & Son Te

Title:  Where Does You're Money Go?

On almost on every home that we sell, there is a question from a seller or a buyer asking, "What is the title fee for?"  That very question came to us last week from the buyer that purchased a home that we had for sale in North Downey.  There are so many players on a single home purchase that many buyers and sellers many times get very confused as to who pays what, and what fee is for what sevice.  Those are all very valid and important questions so we are providing some information below that gives buyers and sellers the answer to what they are paying for in Title Insurance....

 

 

 

 

Title Insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company will proceed to "clear" those encumbrances which you do not wish to assume.

This theory is different from that of most other insurance where, for example, rates and anticipated losses are based on actuarial studies and premiums are pooled on the assumption that a certain number of claims will be made. The distinction is important: title insurance premiums are paid to identify and eliminate potential risks and claims before they happen.  Medical and casualty insurance premiums, for example, are paid to insure against an unpredictable future event, knowing that risks exist and claims will occur. Furthermore, title insurance involves a one-time premium, paid when you close the real estate transaction, while property, casualty and medical insurance require regular renewal premiums.

The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible -- we live in an imperfect world, where human error and changing legal interpretations make 100 percent risk elimination impossible. When claims arise, professional claims personnel are assigned to handle them according to the terms of the title insurance policy.

Title companies' rates are filed with the California Department of Insurance, and each company is required to publicly post its schedule of fees. As in all competitive business environments, rates vary from company to company, so you should make comparisons before deciding on a particular title company. Your real estate professional can help you do this. In addition, there are many helpful customer services provided by title companies which you and your real estate professional may find helpful to your transaction.

The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title "plant," or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property and property owners are posted to these title plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval. In California, most of the large counties have been converted to computer-based title plant systems which provide retrieval from remote locations, further speeding the process of delivering the title search to the customer. This investment in skilled personnel and advanced data processing represents a major part of the title insurance premium dollar.

Proper title plant maintenance, research, evaluation, and legal interpretation are the foundations upon which a title policy rests. That is where most of your dollar goes, and that is the source of your protection and peace of mind as a homeowner in California.

This article was published by the California Land Title Association. Member companies of the California Land Title Association are dedicated to

facilitating the transfer of real property throughout California and increasing the public's awareness of the value and purpose of title insurance.

Homes selling above listing price [August Real Estate Report]

by Southern Californias Top Producing Mother & Son Te

google map to real pro systems

August Real Estate Report

This summer has been quite interesting when looking at the average monthly sales prices of Downey and the surrounfing areas.  The graph below includes the following cities:  Bell, Bellflower, Bell Gardens, Cerritos, Downey, La Mirada, La Habra, Long Beach, Lakewood, Montebello, Norwalk, Paramount, Pico Rivera, Santa Fe Springs, South Gate, and Whittier.  When looking at the graph below, we can see a steady incline in the average sales price collectively over all the cities mentioned above which is a good sign.  There is also a consistancy and a balance when looking at the the average sales price since January of 2010 which tells us that buyers shouldn't wait much longer to buy if they are considering buying. 
Another interesting thing that we noticed when we looked at MLS reports for June and July is that properties are selling for slightly more than what they are being listed for.  Typically in this market it's the other way around.  An agent ususally lists the house for a certain price and then offers either come in at asking price or slightly below.  For the month of June we saw an average sale price of 1.61% more than what the property listed for in the cities of Bellflower, Lakewood, Montebello, Norwalk, and Paramount.  In July the average sales price was 1.594% more than the listed price in the cities of Norwalk, Paramount, Pico Rivera, South Gate, and Whittier.  One of the reasons that this is taking place is because on many homes currently on the market there are multiple offers being presented creating a slight bidding war between buyers.  Another reason is that since the majority of homes on the market are short sales, and in short sales the banks are the final decision makers on the sales price, banks are then limitting their losses as much as they can. 

View the chart below to get a visual perspective of the what real estate is doing in Downey and the surrounding area.              

 

 

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Photo of The Mother & Son Team - Maria Palacios & Chris Gon Real Estate
The Mother & Son Team - Maria Palacios & Chris Gon
Berkshire Hathaway HomeServices, California Properties
16911 Bellflower Blvd
Bellflower CA 90706
(877) 883-1003
Fax: 562-381-9113