COVID and Real Estate, Foreclosure Moratorium, Pandemic Response, Real Estate

THE END OF THE FORECLOSURE MORATORIUM IS NEAR

Back in 2020, homeowners whose income was affected by the pandemic were given the opportunity to apply for a forbearance on their mortgage payments. According to a report from the Joint Center for Housing Studies of Harvard University, Black Knight reported that 14% of all mortgage holders filed for a forbearance during the pandemic. By March 2021, 68% of them had already exited the program either by resolving the delinquency or paying off their loans. Eight percent were still working some sort of loss mitigation agreement and 4% were still in delinquency in the first quarter of 2021. They also reported that about 22% of mortgage holders still in forbearance by the time the 18 months are up, have 10% or less equity and more likely will not have enough equity to sell with equity. (jchs.harvard.edu)

Recently, it was announced that the foreclosure moratorium would end July 2021. So, what if you are one of those mortgage holders who is in forbearance and at risk of foreclosure?  What is next?

The Consumer Financial Protection Bureau (CFBP) has implemented protections for you that will take effect on August 31, 2021.

  • Servicers will need to give you time to process your options and consider your situation. They must meet certain steps before they can initiate a foreclosure.
  • Servicers can offer streamlined loan modifications, which cannot increase your payment.
  • Servicers will be required to increase their outreach to borrowers before they can initiate foreclosure.

What are your options:

  • Resume regular mortgage payment. You can ask to defer your missed payments by moving them to the end of the mortgage.
  • Lower monthly mortgage payment. Ask to modify your loan. This can be changing the interest rate, principal balance or the term of the loan.
  • Sell your home. If you find yourself not being able to make your mortgage payments and have enough equity, you may be able to sell with some profit. If you find you do not have enough equity, you may apply for a short sale. Foreclosure should be the last thing to consider if you do not have enough equity.

A servicer can initiate foreclosure if you:

  • Abandon the property;
  • Were more than 120 days behind in your mortgage before March 1, 2020;
  • Are more than 120 days behind on your mortgage payment and have not responded to specific required outreach for more than 90 days; or
  • Have evaluated all options other than foreclosure and there is no other options available. (consumerfinance.gov)

Feel free to contact me if you are currently in forbearance and need guidance on exiting the program, or believe you will need to sell your home. I am here to help. I’ll be happy to guide you through the process.

Real Estate

The Sandwich Generation

You might be wondering what is the sandwich generation. This generation usually is between their 40s and 50s; still have children under 18 or grown children they financially support. This generation also cares for elderly parents. A Pew Research Center study found that almost 50% of this generation takes care of a parent 65 years or older and a child under 18 years old. As much as you would like to be there all the time, it can be difficult and you may even have guilty feelings, but there are ways you can still care for your parent and balance your everyday life.

Tips for Caring for Aging Parents

1) If your parent is at home, hire a caregiver or ask a relative to stay with him or her. You can arrange a schedule when assistance is needed the most.

2) If your parent is in a senior home but you are worried about what is going on with the pandemic, consider building a small studio or an accessory dwelling unit where your parent still has privacy and independence but is close enough to you.

3) Consult with a senior care manager to help with coordination and other resources.

4) If space is a concern, consider moving to a bigger home. But, more importantly, take care of yourself; talk about it; and ask for help when you need it.

Real Estate

The Impact of Covid-19 on Homeowners Who are Working from Home

Despite various employers offering telecommuting opportunities prior to the pandemic, the norm for the majority of the employees has always been to be at the office in person. When we had the shutdown last year, both employers and employees had to innovate and learn to adjust to remote work for employees.

They Adjusted to a New Way of Doing Business

Home offices were set in place, office equipment was used at home, and new ways of communicating face to face were implemented. Perhaps, at the beginning it was an inconvenience, but as time went by and social distancing became the norm, both businesses and employees began to see how telecommuting could benefit them.—Businesses would reduce overhead and employees would reduce commuting time.

The Pew Research Center conducted a survey which showed only 20% of employed adults were working from home prior to the pandemic. After the pandemic, it was 71% working from home. And, when asked who would prefer to work from home after the pandemic, 54% said yes.

(Image from Pew Research Center)

How Does it Impact Homeowners

There is no doubt many will remain working remotely whether it’s a couple of days a week or 100%.

Hanley Wood conducted a survey last year asking if employees would consider moving to a new home if they could work remotely, over 36% said yes. And, when asked if they lived in an expensive area if they would move if they could go all remote, 55% said yes.

Homeowners who own their home near their place of employment may now have an opportunity to relocate to the place they have always wanted to live. It may be saving money or simply a change in lifestyle, but relocating may now be possible regardless of where you work.

So, if you have been on the fence about selling your home and relocating, this is the time to do it. The market is hot for sellers. Not only would you be able to profit the most on the sale but you would also be able to negotiate staying in your home until you find your replacement home. Don’t think about it too much. You might miss a great opportunity to sell at the highest profit possible in history!

Real Estate

How Can Parents Help Their Adult Children Purchase Their First Home?

Have you wondered how you can help your adult child purchase his or her first home?  Well, here are 4 ways you can help them:

  1. Gift them a portion of their down payment
  2. Co-sign as a non-occupant
  3. Give them a gift of equity
  4. Guide them on establishing good credit

Gift a portion of their down payment – You can gift your children a portion or all of their down payment.  However, please note, gift tax may be applicable after certain amount (consult your CPA for more information).  Also, consult with your loan officer on the guidelines for gift funds to learn up to how much money you are able to gift.  It is also a good idea to have “seasoned” funds.  This means the money has been in the bank account for a couple of months already when the loan officer runs the credit report.

Co-sign as a non-occupant – If you trust your children enough to have your name on the loan, 🙂 this is another option.  The lender will use your credit score and debt to income ratio along with your child’s for the loan qualification. When you co-sign as a non-occupant, you are signing off on the mortgage loan and taking responsibility if your child defaults.

Give them a gift of equity – Equity is the difference between the value of your home and how much you owe on your mortgage loan.  If you were to choose to sell your home to your child for less than what it is worth, the difference would serve as part of or their down payment (depending on the amount).  This would mainly benefit your child, but it could save you some time and money if you were already thinking of putting your home on the market and you will be helping your child.

Guide them on establishing good credit – From a young age, teach them the importance of staying out of debt but at the same time, help them establish their credit.  Guide them into opening a bank account and applying for a secured credit card.  Teach them to stay organized and pay their bills and student loans on time.  You can also let your child become an authorized user on your credit card so your good credit can benefit him or her.  Depending on how responsible your child is, he or she might want to apply for a student credit card; but remind them to always pay on time, pay off the balance, and keep the utilization ratio under 30%.  Their cell phone and utility bills may also help in establishing credit.

These are just a few ways you can help your children purchase their first home.  Their credit, income, and debt will still be taken into account when a lender is considering giving them a loan, but your support could make a difference in getting them approved for a better type of loan or interest rate.

As always, I am here to answer any of your real estate questions. Click below to schedule your online session to chat about how you can help your adult children purchase their first home.

Real Estate

U.S. Vacation Rentals And COVID-19

As we all know, the impact the pandemic has had in the travel and tourism industry has been one of the greatest.   According to the U.S. Travel Association, as of April 30, 2020, the national weekly travel spending went down from $19.8 billion on 3/7/20 to $2.3 billion on 4/25/20.  That is a difference of $17.5 billion!  The states hit the hardest were the ones with higher tourism and international travel.  For instance, their Total Weekly Travel Spending table reported that for this same time period, states like:

California went from $2,488 million to $298 million

Florida went from $1,883 million to $152 million

Hawaii went from $481 million to $18 million

Nevada went from $712 million to $97 million

New York went from $1,461 million to $170 million

Texas went from $1,423 million to $218 million

Consequently, vacation rentals have been impacted.  Travelers cancelled plans and although not all vacation rental owners have been flexible, most have worked with the consumer in providing refunds.  This means vacation rental owners have been severely affected.   On May 5, 2020, the CEO of Airbnb announced they would be letting go of nearly 1,900 employees, about 25% of their workforce.  The two reasons he stated for determining this were they do not know when travel will return and when it does return, it will look different; so they need to start taking action now.  For instance, as of April 29, 2020, Florida’s governor, issued an executive order extending the prohibition on vacation rentals due to concerns that infected people were going to the state.

This pandemic also affected major theme parks such as Disney. The parks had to close and they are a major tourist attraction in 50% of the six states mentioned above. According to The OCR, Disney theme parks face a $21 billion loss through 2022. According to ClickOrlando.com, as of May 5, 2020, Walt Disney Co. had not revealed when its U.S. theme parks will reopen. However, they are working on safety guidelines so they can gradually reopen the parks. This is probably why on May 11, 2020, they announced they were taking reservations for their Florida attractions in July.

So, in summary, the COVID-19 pandemic has drastically affected the travel and tourism industry, which consequently, has affected the short-term vacation rentals.  In my opinion, it will depend on how soon people start feeling safe to travel and the safety guidelines implemented in the major tourist attractions before we can see the vacation rentals coming back as closely as possible to normal pre-COVID-19.   And, when it does, it will be very different from what we’ve known.  Operators/Owners will need to be up-to-date with local health and safety guidelines and make appropriate modifications in the operations, cleaning and maintenance of the rental.  

It is possible that owners who have experienced a major loss and who are not able to maintain the property while the occupancy is low, might need to sell or pivot to a different type of rental (i.e. home insurance, coronavirus quarantine, corporate leases, etc.).

As always, reach out to me for your local real estate needs. You can schedule you 15-minute online session with questions on selling your investment property.

Real Estate

WHAT FIRST-TIME BUYERS SHOULD KNOW

During this video, I give you an overall view of some things you need to know to be ready to purchase your first home. I would also like to add that in addition to the down payment mentioned, I would also like to mention that buyer closing costs could be up to 2-2.5%. This might seem like a lot at a glance but there are options available for you. Ask me what are your options.

Also, there are some banks who will still lend under a 640 FICO score and might still have down payment assistance programs right now, but with changes in the industry due to the current pandemic, most banks got stricter on their requirements. However, don’t get discouraged by this. An experienced Realtor in partnership with a good lender can help you through the process.

Remember you can always contact me with questions on purchasing your first home.

Real Estate

Selling Your Home in This Digital Age

 

How many times a day would you say you go to your phone to either search something online or check your social media?  According to a study by Asurion, Americans check their phone 80 times a day about every 12 minutes, on average (NYPOST.COM, Americans Check Their Phones 80 Times a Day: Study. 11/08/17). Yikes!  I was surprised too, but honestly, I am guilty of this as well.  It almost seems like having information at our fingertips is a necessity nowadays.  And, as the years go by, I believe we will rely more and more in technology.

Technology changes so many things, including how fast and for how much you sell your home!  Have you wondered why some homes that compare to each other in features and price will sell in different time frames and even prices? According to the National Association of Realtors’ Real Estate in a Digital Age 2017 Report, in 1981, 22% of home buyers would look at newspapers to search for homes.  By 2016, 44% were looking for homes online as their first step in purchasing a home.

So, why wouldn’t the way your home is marketed change too?  The first impression a home buyer will get of your home will be online –more likely, on their phone … so, would it be fair to say professional or high quality photography, drone and video of your home will make a difference in how soon you sell your home?

In this digital age of social media and internet blogs and vlogs it is key to have the right real estate agent doing all this work for you.  Oh! And, it’s not just about posting your home online, it’s about strategically posting your home online.  So, next time you interview a real estate agent about listing your home for sale, ask about his or her strategic marketing plan.

As always, contact me if you or anyone you know is looking to sell or buy.

909-346-3610

LupeRuizRealty@yahoo.com

http://www.luperuizrealtor.com

CABRE#01513573

Real Estate

10 Tips for First-Time Homebuyers

Congratulations, you have gone to your local bank and were pre-approved for a $350,000 home loan! You already know the location and the features you want in your new home, but now what? Where do you start? Do you go calling every listing agent in town? Or, do you just go on-line and see what is on the market? Here are some tips that may be able to help you during your home search.

1. Work with an experienced Realtor who can guide and advise you during the process. It is important you have your own Realtor representing you as the buyer in the transaction. A selling agent, will help you search homes, show them to you, and negotiate the deal for you.

2. Trust your Realtor. Your Realtor is the expert in the industry and can tell you whether or not you should offer asking price; or what terms should or should not be included in the Purchase Agreement.

3. When it comes to viewing homes; take all decision-makers with you (including those who are not buying but have influence in your decision-making). Many times, new homebuyers see a home they love, submit and get an offer accepted, but then get cold feet when their relatives or friends “warn” them about everything they should’ve considered before submitting an offer. Hence, causing the buyer to cancel.

4. Have an open mind. You might not be able find the perfect, dream home so you may need to purchase one that needs some tender loving care. Or, if you do find the home of your dreams; keep in mind it is also someone else’s dream home; so take your Realtors’ advise on the best offer you should submit.

5. Purchase a Home Warranty. A home warranty may save you a lot of money if a large item such as a water heater, air conditioning, plumbing, appliances, etc breaks down.

6. Do not purchase any large items on credit. This may interfere with your loan approval and may prevent you from moving forward with the transaction. This is relevant at all stages of the home search and, even more so, during the escrow process.

7. Communicate and cooperate with your Realtor and loan representative. It is imperative that you maintain constant communication with them as they are working hard to get you qualified and into your new home as soon as possible.

8. Don’t view too many properties. More than three trips and viewing too many properties may create the mentality that the more you see, the better deal you will find. However, instead, this will cause confusion and second thoughts; hence, prolonging the home search and possibly walking away from a good opportunity.

9. Obtain a home inspection. Even if the home appears to be in perfect condition, it is always recommended that a trained professional inspect the property. If the inspection reveals serious defects that the seller did not disclose you are generally able to rescind your offer and get your deposit back.

10. Avoid buyer’s remorse. It is not uncommon that somewhere during escrow, homebuyers may question if they made the right decision. You may avoid this by doing your homework beforehand and matching your expectations and price range. If you’ve done this, your stress level may be reduced and buyer’s remorse may have been avoided.

Real Estate

Knowledge is Power

Have you ever heard the quote, “You learn something new every day?”  I believe it is true.  It starts with our attitude and our hunger for knowledge not only for matters that benefit us directly but also for matters that may benefit others as well.  For example, it could be something as simple as directing someone to the right source.  Or, it could be using your professional knowledge and expertise to inform and educate others needing direction.

This year, I choose to do both.   As a real estate professional, I plan, more than ever, to share my expertise with homeowners so they can make educated and strategic decisions when selling their home; and to guide and consult homebuyers during the whole process of purchasing their new home.

I don’t want to just be the Realtor who sells homes.  I also want to be the expert you go to whenever you have a real estate question.  I want to empower you with my knowledge so you may empower me with yours…like they say: “there is no dumb question.”

So, lets make it a great 2013.   Happy New Year!

Real Estate

Real Estate and Economics 101

Image

When I was in college, I used to wonder why in the world I needed to know about supply and demand.  Now, I understand why.  Real Estate is directly affected by micro and macroeconomics.  (All other businesses are affected too, but as a Realtor, I will focus on real estate for purposes of this blog).

 

For example, in this current real estate market, we have a shortage of inventory and a surplus of buyers.  What does this mean?  Well, since there is high demand and not enough inventory; we will see prices of properties gradually increase. HINT: Homeowners thinking of selling?

 

Of course, there are other factors that come into play like short sales and bank-owned properties.  Nonetheless, we are beginning to see more homeowners selling their homes as standard sales.  Homeowners need to think about why they need to sell.  Perhaps, they want to sell because they are relocating or because they want to downgrade/upgrade.  Or, they might need to sell because they can no longer afford their mortgage payment.  Or, sometimes, there are other unfortunate circumstances like the death of a homeowner, a divorce, or an illness.

 

There is a trend for real estate transactions to slow down during the holiday season.   Usually, homeowners will list their homes after the holidays and buyers will start looking for homes in Spring so they are in their new home by the end of Summer.  With the interest rates at their lowest in history probably until mid 2013; I have great hope that the real estate industry is on its way to recovery—despite the U.S. fiscal cliff conversations.