Warnings That Could Cause Problems for Homebuyers

  Imagine you've located the ideal home in the perfect neighborhood. It checks off every box in your list of cant-do-withouts, a lot of room, as well as all of the nice-to-haves. But when you go see it with your agent, a few big problems stand out, like evidence of water damage,low ceilings in the kitchen and other rooms, or a visible crack in the wall. The question is now do you take this off the list from what seemed like your dream home?

Watch Out for These Warning Signs During a Showing

When you view homes for sale, it's good to keep in mind that the seller may not ever disclose (or know) the entire truth about their home. They may have moved in just within the last few years and it's a 10 or 20-year old home.

With regards to your home's condition, ask a professional home inspector or your agent because they'll usually be able to identify problems that you may not see yourself.  Their experience can be very valuable in terms of cost savings if you decide to purchase the home.  

And although the home may look well-maintained at first glance, there could be some remaining defects that aren't noticeable to an untrained eye—the following are a few examples.
Foundation issues

Water damage in ceiling

A bad foundation is among the largest and most expensive issues you will have in a home. If you discover any foundation cracks (either inside or outside) it may indicate the home may have significant structural defects if its larger than one-third of an inch.

Additional clues of possible foundation problems consist of doors that don't shut closed, window frame gaps, or floors that droop in spots.

Quick handyman fixes like a leaky faucet or ungrounded electrical outlet may point to a much bigger problem. If you're looking at a home you're interested in putting an offer on or have your offer accepted already, tell your agent to find out the age of the wiring and plumbing.  This should be very important to you in order to prevent potential floods or fires and costly repairs in the future.

Ideally, roofs should be replaced every 12 to 15 years. So if you notice some missing or curling shingles, it could mean that a home's roof is getting pretty close to the end of its life cycle. If you're unsure regarding the age of the home's roof, just ask your agent. They can contact the seller's agent for more information or get a home inspector.

Did you notice any dark spots in the ceiling and floors of the home? If yes, this may be a evidence of water damage, which is usually an expensive repair. Make it a point to examine the drainage condition of the home. Following a big rainstorm in a yard that isn't appropriately graded could result in water to leak inside the home.

Homes that have basements are more likely to have leaks than homes without a basement, so remember to go downstairs to search for water damage!

Insects, rodents, and other unwanted pests can become a huge problem for a home, especially if it's extensive in the home. Termites for instance should be a big red flag because they can ruin a home's total structure prior to being discovered.

If you see a huge number of bugs or mice droppings during your viewing, you may want to pass on the home and move on to the next.

If you smell a foul odor during a showing, these scents could be an indication of mold, mildew, water damage, pests, poor ventilation, and numerous other issues. You should be especially concerned if a seller appears to be masking odors with heavily scented candles or air fresheners.

Even if you don't come across any of these issues, it's highly recommended to have a physical inspection after your offer is accepted. A professionally licensed  home inspector can identify trouble both big and little and will give you a comprehensive report of everything he/she inspected that must be repaired.

Once you have the report in hand and it has issues the seller was unaware of, you may want to consider renegotiating the price of the home or request the seller to fix the problems. Having said that, if the home is being sold "as-is," you may just have to accept the cost and do your own repairs.

Orange County home prices make another record high at $775,000

 Looking to purchase a home in a hot real estate market?

There's no question that 2020 has been a challenging year for a majority of people, but especially for those who were trapped in a city that totally shut down because of COVID-19.   In major cities,  people fortunate enough to have the means left for homes they owned in the suburbs or rented one.

 That's quite the solution in the middle of a pandemic. This has also sparked a surge in home buying in suburban areas across the country and away from dense metros.

However, there are still lots of people throughout the country who are eager in to buy real estate in the city.  In California, the Orange County Register discovered a 5.2% home price drop versus 2019 – the largest drop since 2009. Based on a report by Curbed, this is the same decrease with what's occurring throughout the country; CoreLogic, a real estate data company, forecasts a 6.6% year over year price decline across the United States by May 2021.

Current Orange County data is as follows:
3,450 new and existing homes sold — an increase of 6.7% in a year. In the first 8 months of 2020, 16,917 purchases were closed, a reduction of 9.4% vs. 2019.

• $775,000 median selling price in Orange County — increase of 6.3% going back 12 months. The current median home price trumps the record of $765,000 made in June 2020. The only month this year a price record wasn't set was in May.

Home buyers are motivated by historically low mortgage rates. Southern California’s median price made a record high, as well.

Existing single-family houses: 2,312 sold, an increase of 7.8% in a year. Median price of $862,000 — a 7.7% rise over 12 months.

Existing condos: 918 sales, an increase of 5.9% over 12 months. Median price of $545,000 — an 8.5% rise in a year.

Newly built: Builders sold 220 new homes, a decline of 0.5% in a year. Median prices of $972,500 — a 9% rise over 12 months.

Moving from L.A. to Orange County

Every year a lot of people are planning to buy homes in Southern California: not always in Hollywood, Beverly Hills, West L.A., South Bay, but in South Orange County. The reason for this is that there are noticeable differences in the prices for homes in different parts of California, especially inland and coastal areas. Not surprisingly, the average prices for homes can vary quite a bit from one zip code to another. This is due to multiple factors.

Furthermore, the majority of places in Orange County come with tremendous value in terms of price and are very appealing. In all of these cities, the lower prices are more linked to the local housing laws, school ratings, economy, and the inventory of homes listed for sale.

The median home price in the six county region is $533,000 according to DataQuick news of CoreLogic. (source)

Areavibes ranks American cities based on a livability score that takes into account various factors, which is comprised of the cost of living, the amount of crime, educational facilities, local job market, and amenities. The livability score is based on a scale of 1 to 100.

The following are south Orange County's top picks in the order of their popularity based on data from Data USA and the Bureau of Labor Statistics.
• Newport Beach – Median home price is $2,137,900. Livability score is 83.
• Laguna Beach – Median home price is $2,016,000. Livability score is 76.
• Dana Point – Median home price is $953,900. Livability score is 86.
• Irvine – Median home price is $856,000. Livability score is 82.
• Aliso Viejo – Median home price is $633,300. Livability score is 82.

The following are the Great school ratings for these popular cities:
• Newport Beach –  8.3  (has 3  9's and 1 10-rated)
• Laguna Beach –  9 .
• Dana Point –  3.
• Irvine –  7.9  (has 7 10's, 7 9's)
• Aliso Viejo - 8.2

These are all great cities to live in. For those who have the option to relocate and to get a better price when buying a home, these should all be considered as decent choices.

The Advantages & Disadvantages of Buying Before Selling

A lot of homeowners run into an increasingly common situation when considering looking for a new home. They need or want to move but are undecided about if they should buy a new home first or sell their existing home. The answer could be yes or no depending on the borrower's situation.  Let's explore the advantages and disadvantages involving each choice.

Buying first will of course leave you with higher expenses until your home sells later on. However, selling first could potentially leave you “homeless” until you buy your new home.

Advantages of Buying Before Selling

Buying a home prior to selling your old home can result in a few major benefits. The first one is it can make the process of house searching more enjoyable.

Often times, homeowners are pressured to speed up the buying process because they need to be move out before their current home's closing date. 

When you have more time to search for a home, you have less regrets and don't overlook certain processes when you buy a home. There's more time to compare lenders, homes, inspections, etc.

An additional key benefit of buying before selling your home is there is no guarantee that the seller of the home will accept your offer. If the seller rejects your offer, your new home search can proceed while still living comfortably in your current home. 

If you plan on purchasing a home that needs some fixing, it will enable you to stay in your existing home as you fix up your new home. Replacing floors, painting, wall removals, plumbing, counter upgrades, wiring, and similar projects are a lot less difficult to finish in an unfurnished home.

Disadvantages of Buying Before Selling

There are also a few drawbacks to buying a home before selling. The most significant problem of buying a new home first is that you could be paying two mortgage payments longer than you expect. 

Many times home buyers expect their existing home to sell quickly but that is not always the case. The risk is money troubles could arise as you attempt to pay two house payment that includes property taxes, insurance and if applicable HOA dues.

Furthermore, you may have challenges with qualifying for a home loan until you sell your existing home. You may need to use the proceeds of the sale of your home for a down payment on the next home to get a mortgage.

If your offer is accepted on a new home and are lacking the funds to pay for it, a great financial solution is "gap financing" or a bridge loan. A bridge loan assists borrowers with the down payment funds and closing costs until your existing home is sold. There terms can range from a one month up to two years.

Tips for Buying Before Selling

Although gap financing could be the ideal solution for you, make certain to think about all areas of your decision. First, determine if you can truly afford the house payments on two homes at the same time.  In a perfect scenario, your house payment which includes your mortgage, taxes, and insurance should not be more than 32 percent of your gross monthly income. If they are, you may want to reconsider buying a home before listing your home for sell.

Consult with a few local real estate agents in Orange County about listing your home for sale and how long it should take to sell your home. Another option some home buyers do is rent out their current home to help pay for that mortgage and maybe sell it later down the road.

However, being a landlord is not always an easy position. You may want to think about hiring a property manager to relieve you of those tenant calls for maintenance. They typically charge 10% of the rent collected.

Solving The Buyer's Regret Condition

Some people in California have second thoughts about purchasing their home once they've have some time to think more about their major purchase.

Nonetheless, in contrast to pants, a jacket or an HD smart TV, you are not allowed to return a house after you've purchased it. You are able to make improvements to bring it to more of your liking, if it is not what you were planning on, try to sell it with a new buyer and move on to the next. Either way, time and money will be needed to get the home you'll appreciate for years to come.

Instead of buying a home you may feel disappointed about after you move in, consider these guidelines to avoid buyers remorse:

Know who your neighbors are
During the home showing peak out side to see who the neighbors are. If they are not seen during the home viewing or inspections ask your real estate agent. Is it a family, a bunch of roommates who are college-aged,  older couple, a guy who works from his garage using power tools during the day. Find out their schedule.

Plan for a resale in the future
Although you may have always wished to have a pool in your yard, you have to consider whether that pool will be as valuable to home buyers when you sell. It’s almost always a drawback to a couple with a young kid.  If you still want the pool consider the costs to fill the pool with cement or dirt 3- to- 6 months before you sell. 

Take into consideration your drive
A home that comes with all the features you want for an excellent price can turn into an issue if you need to drive sixty minutes or more in stop and go traffic every day for work. The same can be said if you have to drive more miles just to get to the supermarket and other common retail stores.  Know your wants and needs so you are not dissatisfied later on.

Evaluate the home completely
When you attend an open house, take a look at every area in the home. You simply cannot ignore small details of the home you may buy. Look at all the walls carefully, open every door, and if you don't like the kitchen cabinets or bathroom design, weigh your options.

If you're thinking about buying a home after seeing it during an open house, several other prospective buyers may be touring the home the same time as you. Take your time but also consider scheduling a private tour with the agent.

Get a home inspection
Because some negative conditions in a home aren't noticeable to the common person. Prior to signing the final closing papers to buy the home, get theproperty inspected by a professional. These professionals will give you a report that lets you know if there is mold, water damage or other concerns that may discourage you from buying.