How Much Does It Cost To Sell My House?

How Much Does It Cost To Sell My House?

Home sellers on the central coast of California are curious on how much it costs to sell their house and what fees are associated with selling their house.  This will give you a good estimate on what to expect when you list your home for sale. The fees in selling your home are approximately 1%-3% of the sale price of the home to cover the closing cost fees, including title and escrow fees. 5-6% for Realtor Commissions and some small Additional Fees that would be  based on exactly when you close escrow.

The Escrow Fees covered are the following:
1. County Transfer Fees
2. Title Insurance
3. Half the Escrow Fee - (Typically it's a fee shared with the buyer)
4. Natural Hazard Disclosure Report - NHD
5. HOA Transfer Fees - (If you are in a Condo, PUD or Association)
6. 1-Year Home Warranty
7. Termite Inspection
8. Drawing of Deeds
9. Misc. Fees

Realtor Commission
Depending on the negotiated realtor commission you will be paying 5-6% of the purchase price. You as the seller typically pay all of this fee. Depending on the your state, these fees may vary. Don't skimp on these fees. Remember 1/2 the Realtor Commission goes to the buyers agent. A listing with low commission rates may give the buyers agent an impression you aren't easy to work with or the agent may not show your home to prospective buyers. Starting off on a good foot with the right impression is a winning strategy to start with.

Additional Fees to consider:
1. Property Taxes Owed
2. Mortgage Loan Balances
3. Interest Owed on Loans
4. HOA Dues Owed (If you are in a Condo, PUD or Association)
5. Costs for Repairs - Termite, Home Inspection results

If you are considering selling your home, ask your realtor to get you a Sellers Net Sheet from a Title & Escrow company. This sheet will give you actual costs associated with each of the itemized fees I have in this Blog.  Once you get the numbers together you will have a better understanding of what your bottom line will be. When you are ready to put your home on the Central Coast Market, give me a call to discuss getting a Net Sheet and starting the process. I'm here to help!

Please leave a comment if you feel this was helpful. Or share this with friends and family. I always appreciate your referral business.

"I'm Your Central Coast Listing Agent!" Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

Mortgage Impound Accounts - Q&A

Mortgage Impound Accounts - Q&A

I recently got a question from my buyers Alison & Matt who are the process of getting their first home in Atascadero.  She asked me:

Hi Traci!!  I had a quick question for you.  So I've been talking to a few people and we are questioning whether we really want to build our property taxes into our monthly mortgage payment.  I'm wondering if it's better for us to just budget that amount and move it into our savings (which earns interest) and just deal with paying it twice a year (I don't remember what it was).  I guess I would be more concerned about paying it if we didn't have a lot in savings.  My thought's are that it would make our monthly payment a lot more manageable and we could earn a little interest on the money as opposed to paying it with our mortgage. What do you think?    - Thanks!  Alison

My advice to Alison is if your lender is giving you the option to add it to your mortgage payment or not, do what you feel most comfortable doing. Some lenders don't always give you this option especially if you are putting  less than 20% as your down payment.  Adding your property taxes to your mortgage payment is called a Mortgage Impound Account.

Alison is right, she can save the money and build a small amount of interest on the money before she makes her payment. That interest is taxable money, so some may argue it's not worth the hassle of saving in a separate account accruing interest because you're taxed on it anyways.

By having an impound account many people enjoy the peace of mind knowing there is one less bill to worry about and that it's paid automatically. That's the no hassle situation.

Choose what makes the most sense for your situation, is my advice to Alison and to you.

Let me know if you have any questions about anything real estate related. I'm here to help!

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

How Much Home Can I Afford?... So Play House

How Much Home Can I Afford?... Play House

I am a very big fan of Money Queen Suze Orman. On one of her recent shows, she had a wonderful idea about figuring out how much home can a new buyer afford. Today I'm going to give you the tools to figure that out by "Playing House."

Step #1
* Choose how much home you want to buy.
* Only start this process if you have 20% down on this home of your choice.
* Go online and use a mortgage calculator and online resources to figure out the following monthly expenses:
       1. 30-year fixed rate monthly mortgage payment
       2. Monthly Property taxes
       3. Monthly Association Fees, (If it's a Condo, Mobile Home or PUD)
       4. Monthly Home Owners Insurance
       5. Monthly Home Maintenance (Yard, Periodic Painting, Termite Repairs, Roof, etc.)
*Total up all the costs for items 1-5, under step #1, and this will give you the total monthly cost of owning the home.

Step #2
* Use your total at the end of Step #1 and subtract it from the monthly rent you currently pay. This will give you the additional amount you currently would have to pay for a home of this price.

Step #3
* Start saving the additional amount you figured out at in Step #2 for 6 months.
* This will help you see what it feels like to own your own home.
* If this amount is too difficult, then you are purchasing too much house.
* If it's easy, you now have 6 months of saving to use towards your closing costs and down payment and you should call your favorite realtor, me, to begin your home search.

I hope this was helpful! This will also help you see if renting is comparable to the monthly cost of buying a home in this current market. Please comment below to give me feedback on this blog post.

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

Refinancing to a Shorter Loan Time Frame

Refinancing to a Shorter Loan Time Frame

Changing the length of your mortgage time frame can save you big money. Interests rates are still very low and if you haven't reaped the benefits of Refinancing your home to a 3.5-4.5% interest rate, Do it! Many people refinance their home with another 30 year loan. But while you are talking to your lender, see if choosing a shorter time frame on your loan may save you money and possibly keep your payments close to where they are now.

 
I know you like examples like I do and I think this paints a vivid picture:
A current loan on your home of:
$400K at 5.75% interest for 30 years is $2,334.29 monthly

Refinancing the same amount for a lower interest rate and shorter terms looks like this:
$400K at 3.75% interest for 20 years is $2,371.55 monthly.

By adjusting the interest rate and the length of your mortgage you are paying almost exactly the same amount monthly, but the 10 years you took off the loan time frame has saved you over $271,172.13 in interest payments. $ 97,713.67 was saved in interest by doing a 20 year loan and $173,458.46 was saved by refinancing to a lower interest rate.  Isn't that Incredible!

Use my mortgage calculator to see what your monthly payment could be with a shorter time frame. Talk to your lender today to see if you qualify to do a refinance and if you can lower your length of the loan. Contact me if you need a lender referral. You will save yourself Mucho Dinero!

Remember, I'm always available for any of your referrals. Contact me today!

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

Own a Home Close to Work and Save Money

What is the financial impact of living outside the city where you work?

A gallon of gas is currently $3.75 a gallon. A person that lives in Paso Robles and works in San Luis Obsipo uses up approximately 2.5 gallons of gas to go to work and return home on a daily basis. Based on only 20 days of work a month, that’s about 50 gallons of gas a month, or $187.50. This doesn’t include wear & tear, maintenance and automotive repairs costs. The cost for only gas for the year would be $2,250. Based on California's current Milage Reimbursement Rate of .55 per mile,  your monthly expense to commute an average of 35 miles to work would be $770 and your annual expense would be $9,240!

If you lived in the same city you worked you would save thousands of dollars a year in gas, wear & tear, maintenance and car repairs.

If the $2,250 was applied to your mortgage payment every year instead of towards gas, what would be the impact?  Based on a mortgage of $450,000 with a 3.75% interest rate for 30 years, you would be able to reduce your final payoff date to 26 years and 2 months and save $43,055.10 in Interest on the loan because it was paid off faster.

We all can’t live where we work, but if you are looking to shorten your commute, save time and money, give me a call to begin your search. I'm here to help.

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

Looking for a San Luis Obispo Sellers Agent?

Looking for a San Luis Obispo Sellers Agent? ... Well look no further!
I look forward to meeting you and exceeding your expectations in selling your home.

Property in San Luis Obispo County is always desirable. If you are thinking about selling your home I know how to sell your home quickly and for top dollar. Contact me to learn more.

Today savvy buyers are searching the internet looking for great homes to buy. Inventory is low for our Summer Season but there is a flurry of buyer activity looking to buy your home. Now is a great time to put it on the market. Sellers are seeing multiple offers on their homes with typically the home selling for above the asking price. Our distressed property inventory is slowing down and buyers have less homes to choose from, creating this frenzy of activity.

Weather you are looking to down size your home or looking to expand your square footage, I know how to sell your home to get you to your goals. Give me a call or email me today to learn more. Visit my website and use my resource tools.

Again... I look forward to meeting you and exceeding your expectations in selling your home.

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

Top 3 San Luis Obispo Buyer Questions

Top 3 San Luis Obispo Buyer Questions

I have noticed that there have been reoccurring Realtor questions from my San Luis Obispo buyers in the past couple of transactions I have done. I have also heard these questions at Open Houses or just in casual conversation. I thought I would address them and give my best answers for each.

1. "If it's possible prices haven't hit bottom yet why, should I buy now?"

My response: While price is a major concern for anyone selling a home, cost should be you primary concern as a buyer. This means you need to take into account what your monthly payments will be, considering not just the price of the home but also your interest rate of your mortgage and property tax amount. San Luis is 1.125% of the purchase price. Inevitably interest rates will increase, making the amount of home you can afford go down. 
See my blog post "Cost vs. Price" for an expansion on how interest rates effect your "buyability"


2. "When will we see appreciation if I buy a home now?"


My response: Appreciation varies by your local market and you would need to look at local pricing trends. Nationally there are indicators that are feeling positive about 2011 and where the market is going. The National Association of Realtors projects a slight increase nationally of 0.5%. Another company that did a National Home Price Expectation Survey showed that experts think prices will begin to build beginning in the second half of 2011 and a cumulative appreciation of more than 10% between now and 2015 nationally.


3."Does buying still make better sense than renting?"

My response: It depends!... Most people buy a home for reasons other than financial. They may want security in their housing situation. They may want to be able to control where they live and be able to do more with their home. I ask them, "What non-financial benefits would your family have to buy a home instead of renting?" The bottom line is it has to be the right timing and make sense to you and your family to do it.

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

Cost vs. Price - What higher interest Rates can do to your purchasne power

Cost vs. Price in San Luis Obispo - What higher Interest Rates can do to your purchase power.

A good rule of thumb is for every 1% increase of interest rate there is a 10% decrease in purchase power. It's surprising to most buyers. This new year is going to bring many new opportunities to find a home. If you are still possibly considering a purchase you may want to know this very important particular bit of information.

The higher interest rates go, the less home you and your family will be able to afford, finance or purchase. If you were looking at property in the $500,000 range and interest rates were at 4.23% now they will eventually steadily be going up to 5.23%, meaning that if you wanted to keep your mortgage payment the same you would only be able to purchase a $450,000 home. Even with a 1/2% change in interest rate it can effect your purchase power greatly. I recommend getting back into finding a house as soon as possible to get the most house for your dollar, before interest rates go up and property prices stay the same.

Please see this example to show your buying power depending on what interest rate you lock your loan in at.

As a buyer it's vital to know your market and what options you have. I'm here to guide you through the process. If you have any questions about this I would be happy to explain it further.

If you are interested in looking for a home in the San Luis Obispo County area, please call me or email me I'd be happy to help.
 Traci

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

1031 Exchange in San Luis Obispo - What Investors know!

1031 Exchange in San Luis Obispo - What Investors Know!

When you own a home or business and you would like to sell your property and move into a larger home or buy investment property, there is a way you can save on taxes. That you should know.
Recently Jay Peet from  Investment Property Exchange Services spoke to us about how a 1031 Exchange, works and how investors can save on transferring funds from one property to another.

What is a 1031 Exchange?
It's the exchange of property to a like kind property where any capital gains taxes would be deferred. There are rules and guidelines to follow depending on the type of property.

Jay spoke about the four aspects of a 1031 Exchange, the L.T.V.V. :

L - Like Kind: The sale of your property must be of like kind to the replacement property, meaning that they are both being held for investment purposes. You can't go from a sale of an investment property to a purchase of a primary residence.

T - Time Frame: When your escrow closes on the sale of your property the clock starts and the exchanger has 45 days to identify a replacement property and 180 days to close escrow on the identified property.

V - Vesting: Whoever is on title of the sold property will be on the title of the purchased property. The relinquished property must be the buyer on the replacement property.

V - Value: The exchanger must purchase the replacement property(s) using all the cash money from the sale of their relinquished property to defer 100% of the gain. If any of the cash is pulled out from the sale of the sold property that money would then be taxed. The purchase property must be equal to the net sales price of what they sold.


If you have any additional questions or would like help with a 1031 exchange, Contact Jay Peet 805-636-4944 jay.peet@ipx1031.com


If you would like to sell your San Luis Obispo investment property through a 1031 exchange, contact Traci for your buying and selling needs. I'd be happy to help.

"A Realtor that knows homes." Traci Ferguson 805-235-6396 traci@traciferguson.com http://www.traciferguson.com License #01875751, ecoBroker #16082

What Income Should You Have to Get The Home You Want?

Your level of income is only one piece of qualification puzzle when you are in the market for the home of your dreams. Lenders will review other things, such as your credit score and your total amount of debt, when considering you for a loan. Remember, your debt takes away a big part of your income. So even if you meet the lenders general guidelines for income level, you'll be denied if you are paying too much money toward your other debts (because you would have less money left over each month to put toward a mortgage payment).

There are a few factors, but you can use 30% as a rule of thumb. In other words, most lenders want your annual income to equal around 30% of your mortgage amount. So based on this rule of thumb, if you wanted to qualify for a mortgage loan of $300,000, you would need an annual income in the neighborhood of $90,000. If a married couple makes $45,000 each, they should qualify for a $300,000 loan. Your lender can work with your individual situation to get you the largest loan possible.
There are numerous types of loans and ways to qualify. Some first time buyer loans make it very easy to qualify with little money down. Some FHA loans require as little as 3-4% down payment.

It's important to shop around for loans and lenders. Large banks may offer different loan packages than smaller local banks or brokerages. It's important to shop for your loan and see what choices you have. Ask your Realtor for referrals to lenders in your area.

We strive to make it easy for you!
Visit my Mortgage Calculator page filled with additional information.
For more information about Real Estate on the Central Coast, please contact Traci Ferguson by E-mail or by phone directly at 805-235-6396.

Buying a Home in San Luis - Tax Benefits

As a home buyer in SLO you have tax benefits that will save you money every year. Your mortgage interest and real estate taxes are tax deductible and anyone with a mortgage can enjoy this tax benefit.

During the early years of the home mortgage, most of your monthly repayments go towards your interest, with little payment towards the capital. Tax benefits are therefore very useful for first-time home buyers, especially during the early years of acquiring the mortgage. The early part of your mortgage payment is primarily paying on the interest of your loan. This interest payment is fully tax deductible. As you pay more on the amortized home mortgage over a longer time frame, more of each monthly payment goes towards paying the principle, and less towards interest. This means that with time, you lose some of your interest write-off as your equity in the property increases.

It is important for you to note that you can take these tax deductions if you change from standard deduction, which all tax payers are entitled to, to itemized deductions. In the case where your itemize deductions, including home mortgage interest and property taxes, do not exceed the standard deduction amount, it is better for you to take standard deduction.

The following three components of your home mortgage are tax deductible:

1. Interest on your home mortgage
2. Property taxes
3. Loan points for a purchase mortgage fully deductible in the year that they are paid. It is noteworthy that in refinance, the points are written off in increments over the term of a home mortgage. (See my blog post on When to pay down points)

We strive to make it easy for you!
Visit my Mortgage Calculator page filled with additional information.
For more information about Real Estate on the Central Coast, please contact Traci Ferguson by E-mail or by phone directly at 805-235-6396.

How Much Home Can I Afford?

In San Luis Obispo home prices can be higher than the rest of the country. Knowing what you can afford on the income you make is vital to choosing the best property for you and your family. Not only do you factor in the cost of your mortgage, but additional costs such as annual Property Taxes, HOA Fees (for condos), property maintenance, down paymnet and your current debts. Once you can accurately asses your financials, you can work with your Realtor to find the perfect home in your price range.

As a broad generalization, most people can afford to purchase a house worth about three times their total (gross) annual income, assuming a 20% down payment and a moderate amount of other long-term debts, such as car or student loan payments. With no other debts, you can probably afford a house worth up to four or even five times your annual income.

We strive to make it easy for you!
For more information about Real Estate in San Luis Obispo County, please contact Traci Ferguson by E-mail or by phone directly at 805-235-6396.

Why Would You Pay Down Points?

Paying Points
As a new home buyer you have to make many decisions. Buying a home can feel like a daunting task. As your real estate agent, I am here to guide you to get the information you need. You have many decisions to make including what is the best possible percentage rate can you get to keep your mortgage payment low. I have had some clients ask about points, what the benefits are and when is the best possible time to pay them.

Lets start with the definition:
The term points has multiple meanings in the mortgage world. Mortgage points can refer to loan origination fees (fees charged by the underwriter) or discount points (also known as loan discounts). Typically, a point is equal to 1% of the purchase price. By using a Mortgage Calculator you can see how paying money upfront to pay down your interest rate can lower your mortgage payment. The difference in savings over the life of the loan can make paying points a benefit to the borrower. Using a Mortgage Calculator can determine what and how many points you would need to pay down to get the interest rate and monthly payment you are looking for.

When should you pay down points?
If you intend to stay in your home for an extended period of time, it may be worthwhile to pay additional points in order to obtain a lower interest rate. The amount of money you save over an extended period of time will off set the upfront costs you made at the beginning.  Paying points on a short term investment or residence doesn't make financial sense to do.

For more information, or to use my Mortgage Calculator, click here to begin. Or visit my website for additional Mortgage Calculators.

Traci Ferguson
805-235-6396
traci@tracifergsuon.com
http://www.traciferguson.com

San Luis Obispo - Investor Tip: Making it easier to buy a home!

How can home buying be easier in San Luis Obispo? 
In my last blog post I touched on the HomeStyle® Renovation Mortgage. A program available for home buyers or investors who need to make renovations to a home.

A HomeStyle Renovation Mortgage is available to buy or refinance a home (with up to four units) that you will live in as your primary residence.

 Instead of financing the renovation with a second mortgage or home equity loan, you get the lower interest rates of a first mortgage and only have to pay for one mortgage closing. And with a HomeStyle Renovation Mortgage, you can borrow an amount based on the value of the home after the renovations are finished, so you know you will have the funds available to do the job right. For borrowers considering major home improvements, this option provides an effective and affordable way to leverage the future value of a home with a single-close first mortgage.

If you are an investor who is considering purchasing a property that is currently owned by Fannie Mae that is in need of a little work – the Fannie Mae Home Style renovation mortgage (a close cousin to the Fannie Mae HomePath renovation mortgage) is the loan program designed for you.
At closing, all funds for renovation will be escrowed in an interest-bearing account. After all renovation work is complete, any remaining funds in the escrow account will be used to pay down the principal balance of the mortgage.

If this is of interest to you, I can help with finding a Fannie Mae lender partner in your area and find Home Path Properties in the San Luis Obispo County Area. I have the tools and resources to get you a home today. Let me be your Realtor of choice.

I am also available via email for any questions you may have about this or any other program. I look forward to helping you make smart choices.

San Luis Obispo - Home Buyer Tip: Making it easier to buy a home!

How can home buying be easier in San Luis Obispo? 
Well Fannie Mae and Freddie Mac; the two largest purchasers of home loans, set the standards under which they will purchase loans from banks and mortgage companies. They have set up a program to reduce their growing inventory of nearly 1,500 Foreclosed homes called HomePath®

So what's in it for buyers? The benefits include:

• Reduced Home Prices
• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers and investors*
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance (Typically if you don't put down 20%, you would need it.)
• No appraisal fees
• Also eligible for HomePath® Renovation Mortgage*
• HomePath® Mortgage financing is available from a variety of lenders - both local and national.

*If you're an investor interested in renovating a property in San Luis County, you may qualify for financing under our HomeStyle® Renovation Mortgage product. See my next Blog Post explaining this option.

Currently there are 3 homes available under this program in the city of San Luis Obispo. There are many more in other neighboring cities. Email me today to get a list of homes that qualify in your area. Take advantage of a government program that helps you purchase at bargain prices and extremely low interest rates.

This is just another way to learn and be smart about Real Estate with me at your side. For any of your home buying needs look to a Realtor that Knows Homes in SLO County.

Are you on the Home Buying Grid?

Did you know you could afford your own home?
I know what you are thinking, NO WAY! I don't make enough money!

As a Real Estate resource to my clients and friends,  I have put together a scenario that will illustrate how I believe you too can live the American dream and be a home owner.

To buy a $200,000 home you would need to make $55K annually for a 32% housing ratio. The housing ratio is the percentage you spend on your housing costs. $55K annual income can be between a couple making $13.25 an hour each, or $26.50 an hour for a single person.
I just did a search for Homes/Condos/PUD properties under $200,000 in SLO County and came up with 88 of them. Get yourself and your family started on one of the best investments around, a home purchase. Ask me about the great programs that can help you get into your own home with as little as 3% down in some cases.

This moment in our economy is a turning point in housing for all of us. In front of us is an opportunity to live the American Dream and be a part of the best investment that you can possibly make, long term. The decline in Interest Rates and Housing prices have opened the door to a new group of working class people that CAN afford to buy their first home.

Call me to see how I can be your guide: Traci 805-235-6396