What We Do…

/by

Below is a comprehensive list of what we do and how we differentiate ourselves from other banks, broker’s and credit unions…Any questions, please contact us.

Residential Financing for Purchases and Refinances on 1 to 4 unit properties:

  1. First Time Buyer Programs that include CalHFA (0 Down Program when Available https://101loan.com/blog/calhfa-financing-zero-down-financing/), Home One (3% down (no limits on income or geographic location with Subsidized Rates), FHA at 3.5% Down up to $1,087m in loan on 1 unit to 4 unit up to $2,095m), VA at 0 down with no MI. USDA and 203k (Not used very often).
  2. All Non QM programs (DSCR, Bank Statement Programs, Stated Income Programs, Foreign National, No Income Verification, Hard Money (1st and 2nds)
  3. Every type of Bridge Financing (https://101loan.com/blog/category/bridge-financing/ )
  4. Jumbo Financing up to $3.5m at 20% Down (Most Retail Banks want 25% to 30% down)
  5. Real Preapprovals (https://101loan.com/blog/category/preapproval/)
  6. Access to over 60 Banks

Commercial & SBA Financing (to include Multifamily, Office, Retail and Light Industrial):

  1. Purchases, Refinances and Cash-Out with access to over 21 Lenders
  2. Hybrid Financing where the income of the property and the borrowers income is used (Most commercial banks don’t do this)
  3. Construction Financing for Owner User and Builders
  4. Unique Property Financing (Financed Silicon Valley Ferrari as example)

Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s:

  1. HECM’s and Jumbos
  2. Smart 2nd’s (Propietary Fixed 2nd’s with No Payment)

Seminar Series for Consumers, Realtors and Other Power Partners

  1. We Offer Many (https://101loan.com/blog/seminars-at-101-loan/)

About 101 Loan:

  1. Over 300 “Five Star” Reviews on Yelp or at Google
  2. Over 30 years of lending experience.
  3. Have Closed over 2 Billion dollars in Loan Volume.

Happy to Discuss any of the above with you.  

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

650-465-8957 c  408-377-4123 o

CA DRE #01205444  NMLS #326829

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 300 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

New Loan Program – 10% Down up to $2.2m in Price with No MI!

/by

Yes…You heard right! 

We now have a program that will allow a buyer with a mid fico score of 740 or higher to purchase a home up at $2.2m in price at just 10% down with no MI.   In addition, we can underwrite these loans in-house at our office with a complete credit package to fully preapprove a client before they make an offer.  This would allow them, to make an offer, not contingent upon the loan approval (not including appraisal and inspection).  With a complete credit package this can be done within 2 to 3 business days (sometimes sooner).

This is a game changer for those that have always been told they need 20% down or more to purchase at this price point and to avoid mortgage insurance (also known at MI or PMI).  In addition, for the client that has 20% down, now they only need to put 10% down invest the other 10% into the stock market or keep available for another property purchase or remodel.

(In some cases, the lender will also allow 15% down up to $3.52m in price or $3m in loan, but this approval over $2m in loan amount, would need to go to the investor taking us 1 week or more to obtain the loan approval for a no loan contingent offer.  This is why getting preapproved is so important, especially as the market changes/demand increases on home purchases.

About Rates…

Currently the rate on the 10% down program is at 6.5% (APR 6.71) at 1 Point on a 30 year fixed or 6.25% at 1 point on the 7/1 ARM (fixed for 7 years but amortized over 30 years).

If you would like to get preapproved for the above, please let us know.

101 Loan

Senior Mortgage Advisor

www.101Loan.com

650-465-8957 c  408-377-4123 o  408-608-1921 f

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

101 Loan LLC – CA DRE #01205444  NMLS #326829

101 Loan is an Associate of General Mortgage Capital Corporation

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 300 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.

The New Jumbo 2 to 1 Buydown…

/by

I have a new loan product that helps developers sell more property in today’s high-rate market.  It’s called 2 to 1 Jumbo Loan and no retail bank offers it.

The concept of this program works like this… Current jumbo rates are approximately 6%.  The buydown (which is priced a tad higher than current market), allows the borrower or seller (builder or developer) to buy down the rate by 2% year 1 so instead of the borrower paying 6.5%, they pay 4.5% for the first 12 months.  Year 2, the borrower pay’s 5.5%, then year 3, 6.5% for the remainder of the loan but will most likely refi in 1 to 2 years when rates go lower.

The cost of the buy down averages between $35k to $40k and put into an escrow account to cover the buydown over the life of the loan but is usually paid by the developer, builder or seller as a way to incent the buyer to purchase and close on the unit.  In return, they get the following:

  • On the price of $2m at 25% down, the P&I payment on the mortgage of $1.5m at 6.5% would be $9481/month.  At 4.5%, the payment would be $7600/month saving the buyer/borrower $1881/month year 1 for 12 months.
  • Year 2, the payment would be $8517/month saving $964/month over month 13 to month 24.
  • Over 2 years, that’s a saving of $34,140 over 2 years.

Note:  Payment above is P&I only and does not include property taxes and property insurance paid monthly.  Above based on a purchase with borrowers having a 780 mid fico and above.  Apr on 6.5% is 6.879.

This program will help more property be sold and we are the only lender in the US currently offering this program.  Let me know if you’d like to discuss this further.

Thanks.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

650-465-8957 c  408-377-4123 o  408-608-1921 f

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

101 Loan LLC – CA DRE #01205444  NMLS #326829

101 Loan is an Associate of General Mortgage Capital Corporation

 

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 300 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.

Lower Interest Rates & Payments in this Market?

/by

This is something relevant to the market that could help buyers and sellers in this competitive real estate space…

Lower Rates and Payments in this Market?  How?

By 101 Loan – 101 Loan LLC dtd 10/26/2022

I recently wrote this article (https://101loan.com/blog/2-1-buy-down-to-lower-rate-and-payment/) on 2 to 1 buy downs (or 3 to 2 to 1 buy downs) where a buyer purchasing real estate could have the seller credit points to temporarily buy down the buyers rate as an example:

Starting Rate is 6.5% (current for a 30 year fixed) as an example.  With a 2 to 1 buy down, the starting rate would be 4.5% for year 1 and then the next year, 5.5% and then the 3rd year until the end of the loan, 6.5%.  This would allow the buyer to get into the property with much lower payments the first 2 years with the idea of refinancing in 2 to 3 years when interest rates come down as analysts predict.

Here’s the Challenge…

These buy downs are only available for conforming loan amounts of $970,800 and less.  What does one do if the buyer is obtaining a jumbo loan which is higher in loan amount?  Also…what if the buyer wants a hybrid such as 7 year or 10 year fixed which is lower than a 30 year fixed in rate?

We have a Solution…

On a jumbo loan, you can still buy the rate down but instead of it dropping 1% or more in rate, if you choose a 7 year fixed (amortized over 30 years), the rate is .75 lower than a 30 year jumbo fixed (currently at 6.375% at 0 points) and is fixed for the next 7 years.  This gives the buyer, plenty of time for interest rates to drop; meanwhile the buyer gets to pay the lower payment for the next 7 years compared with the 30 year fixed with a significantly higher payment and rate.  Note: Rates are subject to change without notice and are only provided here for educational purposes.

“Most important” the Buyer can have the Seller cover the points/buydown to sell the house.  This is something more sellers are willing to do, to unload their property in a timely manner!

See the Examples of Different Price Points and Loan Amounts below where the Rate is Being Bought Down…

  • 1 Million in Price with 20% down payment = $800,000 loan amount – 7 year arm – 5.625% @ 2.25 point cost ($18,000) = $4605 mo/payment.
  • 2 Million in Price with 20% down payment = $1,600,000 loan amount – 7 year arm – 5.625% @ 2.25 point cost ($36,000) = $9211 mo/payment
  • 3 Million in Price with 20% down payment = $2,400,000 loan amount – 7 year arm – 5.625% @ 2.25 point cost ($54,000) = $13,816 mo/payment

Important Notes:  As a buyer, you have the seller pay for the 2.25 points as a condition of accepting your offer.  Those points lower your rate, lower your payment and lower your interest cost over time and are tax deductible to the buyer based on their tax bracket.

Attention Buyers:  In today’s market, with increased inventory and homes sitting on the market longer, you not only have more control in what you pay, but what the seller provides you credit wise so the payments are lower and more affordable.  Be sure to take advantage of the above.

Attention Sellers:  Now you have a tool you can provide potential buyers, something other sellers are not using.  Be sure to use the above so your listing is more competitive and sells quicker.

If you would like this priced out and would like to get preapproved, please let me know.  Thanks.

BTW…See our real estate and market report for what’s happening in the interest rate world right now.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

101 Loan LLC – CA DRE #01205444  NMLS #326829

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

 

 

Want a Lower Payment and a Lower Rate Below Market…A 2-1 Buydown May be the Trick!

/by

Want a Lower Payment and a Lower Rate Below Market…A 2-1 Buydown May be the Trick!…(Read Below for More Info)

 

What is a 2-1 Buydown?

A Buydown temporarily reduces the mortgage payment for the borrower. This happens because the seller offers a credit that pays the difference between the full P&I payment and the reduced P&I payment. The seller only needs to provide the credit and the lender handles supplementing the payment. So, it’s a seller credit used in a different way!

Why would a seller want to give this credit to the buyer?

A Buydown is paid for by the seller instead of the traditional lowering of the sales price when a listing doesn’t sell.  This potentially attracts more buyers because they get a much lower rate and payment for the first 2 years.  It also provides a lower payment helps buyers ease into their new home given all the new expenses they may have.  It also allows them to refinance when rates drop.

This also allows the seller to maybe not have to lower the list price.  This keeps home values as high as possible!  Since this is also a cost to sell the property then the sellers potentially get a tax break by lowering any capital gains (of course sellers should always contact their tax advisor on this).

You can also have a situation where the list price is fine and the sellers don’t need to lower it or give a credit to the buyers.  So then the buyers can counter to increase the sales price to cover the buydown subsidy and then have the sellers give that buydown subsidy!  Sellers get the same net sales price and of course the buyers are getting a much lower payment on their first 2 years!  Of course to do this the property has to appraise for the higher purchase price.  The buyers have to have the extra couple thousand for the down payment because of the slightly higher purchase price in order for this scenario to work.

Basically this is the borrower “financing” their buydown with the higher purchase price in order to get the seller to give the credit to fund the buydown!

Here Is an Example for Educational Purposes Only:

Interest Rate is 6.50%       Loan Amount is $715,000

P&I at $715,000 with a rate of 6.50% is equal to $4519.29/month

If a Seller credits the buyer with a subsidy, this amount can be applied to the buydown and reduce the 1st, 2nd or 3rd year payment, depending on the subsidy amount.

Let’s say a seller agrees to supplement the payment difference for years one and two.

The first-year payment for the borrower would be a rate of 4.50%.  The second-year payment for the borrower would be a rate of 5.50%.  Years 3-30 would be the normal rate of 6.50%.

Year One@ 4.50% = $3622.80 – P&I/Month

Year Two@ 5.50% = $4059.69 – P&I/Month

  • Keep in mind that the borrower still has to qualify at the NOTE RATE and not the buydown rate so in this scenario the borrower qualifies at the note rate of 6.50%
  • In this scenario with the 1st year rate being 4.50% and the 2nd year rate at 5.50% then this means their average rate for the first 2 years is at 5.00% which is still 1.50% LOWER than the current market rate!!

Seller Subsidy:

The difference between the Normal Payment of $4519.29 and Yr. One of $3622.80 is $896.49/Month.

The difference between the Normal Payment of $4519.29 and Yr. Two of $4059.69 is $459.60/Month.

If the Seller offers a subsidy of $896.49 x 12 = $10,757.88 (for 1st year) plus $459.60 x 12 = $5515.20 (for 2nd year) they would offer the borrower a total subsidy of $16,273.08 which would pay for the payment difference the first two years.

This strategy helps a homebuyer ease into their house payment and frees up funds for other things that would have normally gone to a house payment. NOTE: Seller credit cannot exceed maximum seller contribution for program selected.

 

For More Info, please contact me.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

101 Loan LLC – CA DRE #01205444  NMLS #326829

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.

Rob’s Report – Covering the Market, Why a Heloc May Not Make Sense and How a Concurrent Closing May be A Great Solution in Buying in Today’s Market…

/by

It’s been some time since I sent out a newsletter on rates, the market and food for thought in the world of real estate…

What’s prompted me to send a report now has a lot to do with rising home inventory, rising interest rates and the Dow Jones, down by 11.32% year to date currently resting at 32,654 down from 36,799 back on January 4th.

About RATES…

First a foremost as we have seen rates increase from 2.75% in December of 2021 to 4.75 (and higher) to date with only a .75 increase in rates by the Federal Reserve, the Federal Reserve is expected to increase rates 4 more times pushing Prime from a current 4% to 6% in the future and who knows how much higher residential, commercial, and reverse rates will go.

About HELOC’s…

With rising rates, why would a consumer choose a HELOC for cashout over a fixed rate 1st, when HELOC’s can only keep pushing up in rate as most of them are tied to Prime plus a 1 Margin or as of today, 5%.  If the Fed continues with what they said, then a HELOC’s future rate, will be closer to 7% in the near future based on what they are predicting.  In summary, why not lock into a fixed rate now?  In addition, there are some things to consider on why a HELOC may not make sense:

  • Were in a rising rate climate with prime now at 4% plus a margin of 1 (or higher) resulting in a rate of 5% or higher in rate
  • Due to changes in the tax code back in 2018, one cannot write off HELOC’s or 2nd’s, interest wise.
  • Due to their volatility…In the past if property values dropped, HELOC lenders would cut the “line” amount or freeze the account all together.

If you’d like to look at a 1st mortgage refinance, please complete the following…

https://101loan.com/refinancing/

REVERSE MORTGAGES’s…

With rates climbing, home values potentially leveling out and the Dow Jones down by 11% in 2022, much of what we have seen ever 10 years seems to be starting over again and consumer confidence is dropping.  If your over 55 years of age and have at the least 45% equity in your home, you might want to consider the benefits of a fixed rate reverse mortgage.  To determine your options without running credit, please go to https://101loan.com/reverse-mortgage-start/ and complete and we will research your options and provide them to you.

CONCURRENT CLOSING’s and Their Benefits…

If your thinking of buying a home and bridge options don’t work for you at https://101loan.com/blog/do-you-want-to-buy-first-and-then-sell-later-bridge-financing-may-be-the-answer/, you might consider a concurrent closing based on the following steps:

  1. Get pre-approved based on selling current home.
  2. Start looking at new homes and list your current home.
  3. Accept an Offer with a flexible long closing and with a flexible long rent back after you close.
  4. Make a contingent offer or no contingent offer depending on when your closing date is on selling.
  5. Close on the home you are selling and then close on new home or concurrently close at the same time.

Since the market is still strong and more inventory comes on each day, this is a solution you may want to consider as the incredible savings compared with any of the options in the above lin

If you would like to purchase or refinance a property or obtain a reverse mortgage and rid yourself of mortgage payments, 

BTW…To Learn More About Inflation and the Market, go to here.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c

101 Loan – 14435 C Big Basin Way, Saratoga, CA 95070

101 Loan LLC – CA DRE #01205444  NMLS #326829

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Note: Interest rates and loan programs quoted are subject to change without notice or until locked and approved by lender.

To Un-Subscribe from these updates, please USE THIS LINK 

Making a Strong Offer in Today’s Real Estate Market

/by

This is something I shared with another client making offers.  Just some advice to share with you?

With listing inventory this low in the bay area, you should ask your agent/Realtor what they think the property/listing will sell for vs what its worth.  Many agents list property below market to get multiple offers and higher prices.  Rarely do we run numbers based on list price, we tend to go a good $100k over the value to give a more realistic payment breakdown and sometimes that may still be too low.

For each offer you plan on making, asking your agent what they think the true value of the home is (also known as a CMA) and then how many offers will be made, is crucial to a successful offer in today’s real estate market.  Once you determine the true value, then add 1% to 2% for each offer.  Again, this may not result in the winning offer but it will get you close or at least afford the opportunity where the listing agent counters your offer, meaning your still in the running vs dead last on the offer.

For more info, contact us, your Real Estate agent and be sure to read the article below to see what’s happens when your not successful in ratifying the purchase contract.

See below:

https://101loan.com/blog/chasing-the-2021-housing-market/

Any questions, please contact me.  Thanks.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01205444  NMLS #326829

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

Do You Want to Buy First and then Sell Later?  Bridge Financing May Be the Answer!

/by

Do You Want to Buy First and then Sell After ?  Bridge Financing May Be the Answer!

Bridge Financing or Collateral Based Financing is a form of financing that allows a buyer of property to buy first (and close) and then sell their existing property later.  This allows them to make the strongest offer possible in a seller’s market often times without a loan contingency.  Once they sell their property, they can pay down any debts they owe and pocket the remaining funds as applicable. 

There are several ways to accomplish this and I have included them below:

  • 1st Option – Obtain a Line of Credit on current property to pay cash or use the line for the down payment of the new property.
  • 2nd Option – Do a Cashout Refinance and use that cash for the down payment or outright purchase.
  • 3rd Option – Get a Mortgage on Both Properties using A Paper (loans with the lowest rates)) that provides the necessary money to pay “cash” for the purchase with a closing of 30 days or less.  Then once the exiting property is sold, the proceeds from that sale pay down purchase money loan leaving you with a loan based on your overall equity and loan you desire or qualify for.
  • 4th Option – Apply for a Mortgage on Both Properties using B Paper (loans with higher rates)) that provides the necessary money to pay “cash” for the purchase with a closing of 15 days or less.  Then once the exiting property is sold, the proceeds from that sale pay down purchase money loan leaving you with a loan based on your overall equity and loan you desire or qualify for.

Each of these have pro’s and cons.  In order to determine which one is best for you, please complete the following and I will provide , your client qualifies for and is in their best interest, it is best to have them complete the following at:

https://101loan.com/purchasing/

Any questions, please contact me.  Thanks.

Best Regards,

101 Loan

Senior Mortgage Advisor

www.101Loan.com

408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 1601 S De Anza Blvd, Suite 260, Cupertino, CA 95014

CA DRE #01205444  NMLS #326829

Products/Services/Accolades:

  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
  3. Commercial & SBA Financing to include Multifamily, Office, Retail and Light Industrial.
  4. Access to over 50 banks with over 200 “Five Star” Reviews on Yelp, Google, Facebook and Linkedin.

 

 

Chasing the 2021-2022 Housing Market

/by

Over the last 30 years our office has seen multiple cycles in Real Estate and in the Stock Market.  These cycles consisted of Growth (where the US Equity Markets (Dow and Nasdaq) and housing prices soared), Over-Supply (where the curve flattened due to a lack of economic growth and housing inventory started increasing), Recession (where the US Equity Markets dropped and housing prices followed) and then Recovery (where consumer confidence increased and the US Equity Markets and housing prices slowly started to go back up).  Each cycle would last a max of 24 to 36 months.  

In my time of providing home financing to thousands of customers, I have personally witnessed these cycles and like clockwork we saw one in the 80’s, in the 90’s and in 2000’s.  Then in 2009, the books were rewritten and we found history changed.  Basically in 36 months following the 2009 housing and US Equity crash, we went into a recession, skipping “over-supply” all together and found us in a recession (the worst we had seen in 70 years since the great depression) with housing and the US Equity Markets free falling.  Then in 2012, the storm leveled and over the next 8 years we saw the Dow average rocket to 29,500 and housing prices hit all-time highs or so we thought.  Then on or around Q1 – 2020 (March 9th to be exact), the COVID pandemic scared investors but had little impact on Real Estate.  Yes, the Dow dropped down to 17,000 in change but US residential real estate stayed strong only pausing for a short period of time and then once the market could survive COVID, the US Equity Markets and US Residential Property Prices continued their way up with the Dow Average now at 35,526 (dtd 8/13/2021 at 10:22am PST) up 6026 since March 9, 2020 and US Real Estate Prices went even higher than 1.5 years ago.

Now let’s go back 12 -18 months (8/2020) where the US Equity Markets started showing signs of growth and there were signs (a vaccine for Covid) that things were improving not just locally but on national level and international level.  So many buyers and trade up sellers (selling first and then buying up) convinced themselves, that if they didn’t act quickly, they were going to miss a once in a lifetime opportunity and get priced out of the housing market also called FOMO (Fear of Missing Out)

Here’s where things got really bad for buyers… 

Residential Home, Townhouse and Condo Inventory drops below 1000 in several Bay Area counties as the economy bounces back.  Sellers backed by the advice of their Realtors, list properties 20% or lower causing a frenzy of buyers to over bid, making some offers with no contingencies for Financing or Inspections and some even decide to pay cash improving their position to “win” the offer.

Then this Happens…

That Overbid becomes the new comp for the area.  Why is that a problem?  See below…

Let’s say you were looking at $1M dollar home in the Bay Area and had to compete with someone that already sold their home and has a lot of cash for the down payment or has enough cash to pay for it out right.  The house is listed for $1M but it’s really worth $1.2m and you decide to come in at $1.2M but someone else comes in at $1.4M that pays $200K more than the fair market value.  The home closes escrow and now that home and other properties like it within a 1-to-2-mile distance are now worth $1.4M.  You the buyer, start looking at making another offer, but now what was $1.2M is now worth 1.4M.  What if you don’t make an aggressive offer on the next property?  You might get outbid again and the prices of homes in that area are now even higher.  

Let’s say you take some time out of the buying frenzy, thinking it can’t stay this way and you start looking again only to find homes in the neighborhood you want, are now worth $1.6M or higher.  In just a short period of time you saw homes in one neighborhood go from $1.2M to $1.6M and then find out this phenomenon is happening in other desirable areas not just locally but nationally.

What do You Do?

Do you ride this one out or do you take the plunge, go super aggressive and pay $1.7m or higher for the next property in your desired neighborhood.  This dilemma is something every buyer has had to consider in the last 8 to 12 months.  If you want a “leg up on your next offer” 101 Loan LLC and a few Realtors we work with have the answer(s) to help win on your next offer.

In today’s market, you want to work with pro-active Real Estate Professionals and Time-Trusted Lenders but here’s the key…We can help you not become one of those frustrated buyers that are waiting for the housing bubble to burst.  Those buyers may be waiting for a long time, especially as many Bay Area HQ Companies are now forcing employees back to their Bay Area offices with many of them looking to buy locally again.  The employees that left the area for other less expensive areas, may soon become your competition in buying as large companies like IBM, Apple, Google and Facebook force employees to come back to the office in the very near future or risk economic consequences.

If you want to make a competitive offer and your next offer, we can help.  Contact Rob at your earliest convenience.