Pasadena CA Real Estate

An interesting question was just posed on Trulia. A home buyer was told by her real estate agent that the realtor representing the home seller was going to cancel escrow since loan and appraisal contingencies were not released. The question was – can the seller cancel the escrow?

Absolutely!

When you make an offer to buy a Pasadena home or any California property, your realtor will discuss with you the three main contingencies of the home purchase. These contingencies are:

1. Loan Approval Contingency:  A home buyer can back out of the escrow and NOT lose their earnest money deposit if that home buyer can not qualify for a home loan within the contingency time period.
2. Appraisal Contingency:  A home buyer can cancel the escrow if the home doesn’t appraise to the full purchase price offered. 
3. Home inspection:  A home buyer has an opportunity to hire a home inspector to check the property condition.  Don’t forget that sewer inspection!  If the inspector finds issues that the home buyer was not aware of before and the buyer is unable to negotiate repairs with the home seller or is unwilling to purchase the house after learning of these issues, the buyer can cancel the escrow.  This home inspection contigency would also include any reports that have been provided to the buyer by the home seller.  If it’s a condominium or a townhome, a review of the financial statements and other relevant information about the complex is done at the same time.

These contingencies are in place to protect the home buyer’s earnest money deposit.  In essence, it’s a free look at the property for the buyer without any penalties.

READ MORE:  The fastest way to lose your earnest money deposit

For a home seller, this contingency period or a “free look” is a period of uncertainty.  The deal is not sealed unless and until the home buyer signs off and releases all contingencies.

A good real estate agent representing the seller will ensure that all contingencies are released within the contractual time frames allowed and agreed to.  Usually, the buyer will have anywhere between 7 to 17 days to complete their inspections, get approved for the loan and get the appraisal completed. 

If home purchase contingencies are not released within the agreed upon time frames, a Notice to Perform is sent to the buyer by the seller and if the buyer still does not sign off and releases the contingencies than a home seller is totally in their right to cancel the escrow and move on with the marketing of their Pasadena home.

READ MORE:  Nine Stupid Things Buyers Do to Mess Up their Home Purchase

We are proud to share with you that Pasadena Real Estate Blog is one of the first Pasadena websites to be able to provide home buyers with access to home listings in multiple MLS (Multiple Listing Services) throughout Southern California.

CARETS – California Real Estate Technology Services – has been recently launched and allows us to give home buyers easy access to Southern California listings in Orange, Riverside, San Bernardino and Los Angeles Counties and surrounding communities. 

Most real estate websites are able to provide access to home listings for a very specific and limited area.  With this initiative, our real estate readers will have access to close to 100,000 homes and condos throughout Southern California.  Not only will you be able to see these homes, but you can also register for a FREE VIP membership and save home searches based on your needs and criteria.  This MLS system is so smart that it will allow you to receive emails as soon as new homes, condos or townhomes come up on the real estate market.

To make this even better, this system gives you access to real estate foreclosures, as well.

Take a look at the home search service by clicking on the home search map below.  Let me know what you think!

Posted by Irina Netchaev, Pasadena Realtors.

• By: Brian Brady
• America’s #1 Mortgage
  Broker

We analyze Pasadena mortgage rates by examining the mortgage-backed securities market
and its reaction to economic data and events.  Today, the Federal Reserve cut
the Fed Funds rate to an historical low of 1%:

The Fed funds rate target is now 1%,
the lowest level in more than four years. In announcing its decision, the
Federal Open Market Committee cited a drop in spending by consumers and
businesses, and predicted that consumption
may slow further due to tighter lending standards.

“The pace of economic activity appears to have slowed markedly,” the FOMC
said in a statement, “owing importantly to a decline in consumer expenditures.”

Why’s the economy in the tank?  You just aren’t spending enough money, Joe
the Plumber.  Of course, you can’t borrow any either so you’re hesitant about
spending.   Hence, the Fed cut in rate.  Normally, a Fed cut should be followed
by a RISE in mortgage rates but it looks like the mortgage-backed securities
market anticipated the cut a week ago. 

Let’s take a look the crystal ball (market chart):

See what’s happening here?  Two weeks ago, we had a six day BIG drop, which
caused rates to rise from 5.875% to 6.5%.  That drop was followed by a 5 day
rally, which brought rates back down to 5.875%.  Then, we had a six day BIG
drop, driving Pasadena mortgage rates back up to 6.5% (today)…

…and I think the market overreacted which means I think we’ll see
lower mortgage rates into the beginning of November.

This is the kind of volatility we’ve come to expect.  Pasadena mortgage rates should
drop to 6.25%, pause, then drop again to the 6% level or below.  No guarantees
but November closings should get a peek at 6% or better rates soon.

I’ve been posting monthly real estate market report updates on this site for cities around Pasadena. One of the key real estate indicators that I refer to is the Market Action Index or MAI.

What is the Market Action Index ? And, why does the Market Action Indicator matter?

Residential house prices are a function of supply and demand, and market MARKET ACTION INDEX conditions can be characterized by analyzing those factors.

My research company, Altos Research uses an algorithm to divide a Buyer’s Market from a Seller’s Market. The red line at 30 is that line.

For example in the graph below for Pasadena’s real estate market, it has been a COLD, BUYER’S MARKET since end of 2007 with the MAI hovering quite a bit under the balanced market of 30, closer to 15. Now, this graph is for the entire Pasadena real estate market. Each zip code within the city has a different MAI.

Come back to this site to watch this index for sustained changes: if the index falls into the Buyer’s Market zone for a long period, prices are likely in for a downward correction.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory.

An MAI value greater than 30 typically indicates a “Seller’s Market” (a.k.a. “Hot Market”) because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a “Buyer’s Market” (a.k.a. “Cold Market”) where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.

If you are interested in receiving a weekly real estate market reports with the Market Price Index, you can request Market Real Estate Report here and it will be emailed to you automatically each Monday. This is a report that I order specifically for the readers of my website from Altos Research who specializes specifically in real estate housing market activity throughout the country.

I currently offer real estate market reports for Pasadena, Alhambra, San Marino, South Pasadena, Monterey Hills (under Los Angeles 90042), Arcadia, Altadena, San Gabriel and more.

If you have additional questions about the state of the Pasadena housing market, please call me at 626-627-7107 .

Irina

One of the most frequest real estate questions that I get from Pasadena real estate buyers is “How can we get more house for our money?”

Here are the top 5 home buying tips:

Home Buying Tip #1:  Do not be afraid to ask the seller to contribute towards your closing costs.  Most banks will allow up to 6% of non-recurring costs to be contributed by the seller.  These dollars can be best applied towards buying down the interest rate on your home loan.  The lower the interest rate, the lower the payment, the more house you can afford. 

READ MORE:  Recurring and Non – Recurring Closing Costs

Home Buying Tip #2:  Always get a home inspection before buying a home.  A home inspection is different from a home appraisal.  A home inspection will help you not only undertand the condition of the home’s major systems, but will also help in negotiating concessions, repairs or to renegotiate the price if problems are found.  It is also very important to get a separate sewer line inspection since most general inspectors will not be able to tell the condition of the sewer lines.  There are specialized inspectors that will snake the lines and will give a home buyer pretty good idea what is going on under the house.

Home Buying Tip #3:  Don’t just shop for a home loan rate.  Ensure that you find a knowledgeable and reputable lender that can discuss various options available to the home buyer.  There are still wonderful down payment assistance programs and first time home buyer programs available.  Also, there are various conventional loan programs that can be tailored to the home buyer’s specific needs and lots of school districts like LAUSD have negotiated special home buying loans with various lenders.

Another consideration in today’s real estate market is that banks are much tighter with their money.  Once you find a Pasadena home that you love, a buyer needs to ensure that the lender can follow through on what he or she promised and close the loan.  Otherwise, you will be out of pocket for appraisal, home inspections and other fees.  Your Pasadena real estate agent will be able to provide you with references to lenders with proven results.

Home Buying Tip #4:  Look for homes that have been on the market for awhile.  Real Estate agents, as well as home buyers tend to only look at homes that are newly listed.  That is all nice and well, but the home sellers that have possibly overpriced their homes originally and have reduced since or waiting for an offer, any offer, might be willing to negotiate the home price more aggressively than the ones that just put their Pasadena home for sale.  Check my monthly Dusty Deals list for these “stale” homes for sale.

Home Buying Tip #5:  Work with an experienced real estate agent.  A real estate agent can make or break a home sale.  She is the resource for reputable lenders, inspectors, contractors and others critical parties to the home buying process.  A real estate agent that is knowledgeable will be able to write a home sale contract in a way that will protect the buyer and bring the positive aspect of buyer’s offer to the seller.  A local real estate expert will be able to provide a home buyer with home selling trends and advise on the appropriate offer price and negotiate like a bulldog to ensure that you get the most home for your dollar.

READ MORE:  What can you expect from a great real estate agent?  This post has a really funny video to entertain you, but underneath is a list of what I would expect from my real estate agent.

Posted by Irina Netchaev, Pasadena Real Estate Agent -    626-627-7107