Helpful Buyer Tips

Are you looking for a home yet?  if not, you may be surprised to hear that even in this "foreclosure and bank desperate seller" market there is a lot of competition with other buyers.  That's right, most buyers in my area will find themselves looking in a range between 100,000 and 250,000, most likely because that comes with a decent payment and in this market a heck of a house.  With so many buyers in that same price range it makes it hard to get your offer accepted. 

Here are a few tips to help your offer float to the top of the pile.

1. Don't Overbid-  It might seem like that is the perfect way to get your offer accepted, by paying a little more than the next guy.  What happens during the loan process in most of these instances is that the appraisal will come in low and the seller (typically a bank) will be forced to either lower the price OR find a new buyer.  Because the banks are going through this many times a day they watch out for this and will not accept offers when they believe the appraisal will not come in high enough to support the offer, however there is one exception to this rule

2. Make the highest bid-  You may think I've lost it, but read on; as you now know the bank is reluctant to take an offer that will not appraise for the price offered.  However, if you can "put your money where your offer is" and back up your offer with extra down payment that can really set you apart from the other offers.  For example, if a home is listed at 200,000 and your agent feels it will appraise for about that much, and you are putting 3.5% down ($7,000) you may specifically offer 202,000 and then show (have the agent make this clear) that you can put down the required 7,000 and the additional 2,000 in case the home doesn't appraise high enough.  Make sure you read the next tip though, because things can get tricky here.

3. Pay all closing costs yourself-  Unfortunately the best way to get your offer accepted is to have money in your pocket, and that just may not be available for everyone.  Based on tip #1 and #2 you can see what the seller really wants to see, THE MONEY.  Many loan programs allow you to ask the seller to pay some or even all of your closing costs.  If this same 200,000 home gets one offer for 200,000 and the seller has to pay 6,000 in closing costs, and then another offer for the same price where the seller doesn't have to pay closing costs, which one will the seller accept?  yep, the one that makes them the most money.  Without asking for closing costs the buyer could even offer 197,000 and be ahead by 3,000.  Don't have the money for closing costs, but tired of being beat out one home after another?  There is  another tip, and I would be glad to explain, but that is something you will have to call me for. 

George Moring 951-515-5518

Property Tax Information

Property Taxes- Did you know that our area has property taxes that range from 1.1% up to 3.5%+?  Well maybe not entirely true since the County property taxes in Riverside county are 1%, but then you have to consider all the special assessments on the property.  Special assessments are the "mello-roos" of today, and since mello-roos were such a bad word in the late 90's they show them a little differently now.

Special assessments can be for parks, schools, trash, water, lights, bond projects, or a multitude of other things.  They vary from tract to tract or sometimes even from phase to phase in the same tract.  Special assessments can range from several dollars a year, to several thousand dollars a year.  They tend to stay with a property from 15-30 years.

Well, nobody wants high taxes, so what areas have the lowest assessments?  There is not a general map of the area with different tax rates and assessments.  Crossing a street to the next tract can have significant changes in the special assessments.  The only way to know for sure is to look up the specific property.  Riverside county posts bills online at https://taxpayments.co.riverside.ca.us/Search.aspx Just put in the address and you can see the existing owners tax bill.  Unfortunately the site does go down a few times a year for updates so then you will have to contact a real estate professional or myself to get it from other sources.

The 1% base tax will change based on the new assessed value after you buy (most likely the purchase price), but the special assessments will stay the same if the property is valued at $100,000 or $500,000.  Calculating it is not rocket science but it does require a little understanding of algebra.

I encourage all my clients to provide me with property addresses and expected purchase price before they START the buying process.  I will calculate a payment on the exact house using estimated future taxes so you know as a buyer what EXACTLY you are getting into.  Buyers are constantly surprised when, for example, a home for $250,000 and large special assessments has a higher payment then one for $275,000 and lower special assessments.

Call today for a real payment calculation on that property you like.  If you don't call me, at least work with a local professional so they are aware of this phenomenon.  Many areas across the country or even California don't have the same situation with taxes that we do in the surrounding counties.

George Moring 951-515-5518