Ask Brian

Is there a difference between a REALTOR® and a real estate agent? Yes, quit a big difference in fact. A real estate agent is simply any individual who holds a real estate sales person license. They are not obligated to follow any standards of practice except for those set forth by California law. However, a REALTOR® on the other hand is an active member of the real estate community. They are generally part of 3 associations, the National Association of REALTOR®s, California Association of REALTOR®s, and their corresponding local board, such as the San Diego Association of REALTOR®s. Their membership to these associations inherently means that they have adopted a particular standard of practice and have committed to certain ethical standards and guidelines. As a REALTOR®, their membership also gives them access to real estate attorneys and other industry resources such as the MLS which provides the most up to date data available on the local housing market. When choosing a real estate professional, always choose a REALTOR®!

What is the difference between an agent and a broker? A real estate agent is any individual that holds a real estate sales person license. In order to practice real estate, they must do so under the supervision and direction of a real estate broker. Thus, a California Real Estate Broker’s license is the highest form of licensure the state issues for real estate professionals. It requires advanced education and a certain number of years in the industry. It is the broker who ensures that real estate transactions are performed within the guidelines of the law and standards of practice.

Approximately how long does it take to purchase a home? That depends on the goals and qualifications of each home buyer. However, once a home buyer is pre-qualified for the loan and is ready to start looking at property, the process generally takes 35 to 90 days. For example, if Bob and Sue start their home search on March 1st, it may take 3 weeks before finding the right property. Let’s say the purchase agreement was successfully negotiated on March 21st, Bob and Sue could expect to move into their new home with in 30 days. If escrow closes on April 21st, then it will have taken 51 days to complete the purchase.

Approximately how long does it take to sell a home? PacifiCal Realty Group has an excellent reputation for selling properties under the average market time. Currently the average home sits on the market for 71 days before receiving an offer. Once an offer is accepted the average escrow takes about 30 days. Thus, with the right preparation, a strong marketing plan, and the appropriate pricing, a home seller can expect to have their home sold in 100 days or less in today’s market place. P.S. The average days on market for Brian Cane’s listing is 32 days. This means that PacifiCal Realty Group is selling homes 40% faster than the average brokerage in today’s market.

What are closing costs? Closing costs are incurred by both the home buyer and home seller. For the home buyer, closing costs include expenses for obtaining a loan, ordering an appraisal, obtaining a home inspection, notarizing documents, etc... In general, a buyer can expect their closing cost to equal 2% of their home purchase. Thus, if you are buying a $500,000 home, the average closing costs would equal $10,000. A home seller also incurs closing cost usually equal to 7% of the home’s sales price. The expenses include agent commissions, disclosure reports, termite clearance, transfer taxes, etc... Thus, a homeowner who sells their house for $500,000 should expect to incur approximately $35,000 in closing costs.

What are points? Points refer to money paid to acquire a home loan. Typically, the cost of a home loan is 1% or 1 (Percentage) Point. However, there are many different types of loan programs in the marketplace. Many lenders advertise 0 point loans. However, some borrowers may choose to pay 2%, 3% or even 4% for their loan. The reason for paying more points would be to “buy down” the interest rate on the loan. For example a 1 point loan may offer an interest rate of 6.25%. However, a 2 point loan may lower the interest rate to 6%. Over the long term, the borrower may save money by buying down the rate upfront. The most important question a home buyer can ask their lender is: “May I see an accurate copy of the Mortgage Loan Disclosure Statement (MLDS)”? This document discloses, by law, the total number of front end points paid by the borrower as well as the total number of “rebate points” the bank is paying the loan officer for initiating the loan at the quoted rate. Here is a quick tip for saving thousands of dollars! If your lender is receiving back end points, they can be ultimately get you a better rate! Your lender should expect to make 1% of your loan amount, anything over that should be saving past on to you.

What are comparables or comps? Comparables, commonly known as “Comps” are other recent home sales in the area that have similar physical characteristics to the subject property. This includes, square feet, layout, number of bedrooms and baths, view, lot size, etc. When determining the value or market price for a property, the most common method for estimating value is the Value Comparison Method. This compares a subject property to other properties (aka Comps) within 1 square mile that have sold within the last 6 months. One important aspect of obtaining an accurate comp is to look at the properties that have actually sold. This tells the market place what a motivated, qualified buyer was willing to pay at that time in the market. What is not a comp, is an active listing that has not yet sold. Although, comparing the physical characteristics and asking price of an active listing to the subject property is a good way of gauging an appropriate purchase or list price for the subject property, the true determining factor for calculating value is to compare what other buyer’s were willing to pay—in other words what homes have actually sold for in the last 6 months.

How do you determine how much a property is really worth? When determining the value or market price for a property, the most common method for estimating value is the Value Comparison Method. This compares a subject property to other properties (aka Comps) within 1 square mile that have sold within the last 6 months. Of course homes within particular subdivision or condo complexes will be heavily influenced by the sales within that particular subdivision or complex. One important aspect of obtaining an accurate comp is to look at the properties that have actually sold. This tells the market place what a motivated, qualified buyer was willing to pay at that time in the market. What is not a comp, is an active listing that has not yet sold. Although, comparing the physical characteristics and asking price of an active listing to the subject property is a good way of gauging an appropriate purchase or list price for the subject property, the true determining factor for calculating value is to compare what other buyer’s were willing to pay—in other words what homes have actually sold for in the last 6 months. The comparison method is also used in determining value of rental property and lots/land, however it is combined with other factors such as the amount of rent generated by the subject property or what the higest and best use for the land may be. To truly determine how much your property is worth, contact PacifiCal Realty Group and ask for a complimentary Current Market Analysis (CMA).

What does it mean to be pre-approved or pre-qualified? Pre-approval is step 2 in the real estate process. Step 1 is to speak with a real estate professional to become educated on the general home buying process and begin to create a home buying profile. Step 2, loan pre-qualification is a very important next step. Loan pre-qualification (or pre-approval) determines how much house you can afford based on your credit and amount of money you can and would like to spend each month. Loan pre-qualification is paramount in moving forward with a home purchase and is needed to truly obtain a purchase at the best price and terms because it tells the home seller that you have already been pre-qualified for your home loan and your offer is strong and reliable. Contact PacifiCal Realty Group® today for a list of qualified, reliable lenders who can assist in the loan pre-qualification process.

What kind of down payment do I need to buy a home? In today’s real estate market, lenders typically require a 20% down payment. However, there are several banks and loan programs which allow home buyers to obtain a loan with 15%, 10% or even 5% down and NOT pay mortgage insurance. PacifiCal Realty Group® has a list of qualified, reliable lenders who can accommodate these types of loan scenarios. Also, despite the media buzz, homebuyers can still purchase real estate using 100% financing—especially first time home buyers. Government subsidized loan programs such as ACORN and Cal HFA are two commonly used programs and can save first time home buyers a lot of money. At PacifiCal Realty Group®, we pride ourselves in providing sound and prudent advise as to the structure of a real estate purchase scenario. As every homebuyer’s financial situation is unique, so will be the down payment amount. In general, a down payment of 10%-20% is recommended at this time.

I received my property tax bill and it is based on the old property value from the previous owner. How would I go about getting that corrected? What generally happens is that you receive a supplemental tax bill based on the previous tax basis of the property. At closing, you were either credited or debited a prorated dollar amount based on when you closed escrow. In receiving your tax bill, it was probably based on the previous years assessed value. You should also be receiving a supplemental tax bill or credit, based on the purchase price of the property. Pacifical Realty Group® is happy to review all tax bills to double check for accuracy and/or provide an explanation. Feel free to fax or email tax statements to our office and we’d be glad to help.