first time home buyer’s seminar … · a sure and steady way to build wealth over time it’s...
TRANSCRIPT
First Time Home Buyer’s Seminar
Buying a Home in Today’s Market
Wells Fargo Home Mtg.
Encino CA.
10/30/2012
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Homeownership Works!
that’s still true today!
Homeownership may be the single most important investment you’ll make in your lifetime.
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Building Long-term Financial
Security
A home is an investment in personal and financial well-being
Homeownership isn’t a get-rich quick scheme -- it’s a sure and steady way to build wealth over time
It’s critical to get the financing right
That’s why you should work with Wells Fargo
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Interest paid on mortgages is deductible for most
homeowners.
Property taxes are deductible for most homeowners.
For most homeowners, there are no capital gains taxes when
a primary residence is sold.
*See your tax advisor
And add to that. . .
significant tax advantages* for homeownership
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Compare Applesto Apples
Every interest rate is associated with an origination fee.
When comparing rates, get the whole story --
Compare rates with the
same origination fee charged.
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Get pre-approved for your loan first – before house-hunting
This determines the upper limitof your price range
Borrow only as much as you feel
comfortable borrowing
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• What is the term of the loan?
• What is the interest rate?
• Is the rate fixed or adjustable?
• When are the payments due?
• What happens if I make a late payment?
• Are taxes and insurance included in my monthly payment?
• What will my closing costs be? What’s included?
Wells Fargo will work with you to ensure
you understand the answers to these questions.
Questions to ask
Key Qualifying Components
•Credit
• Income
•Assets
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Credit• Normally good for 120 days.
• 3 Bureaus – 3 Scores
• Scores range from 300-870
• Score based on many things • Payment history
• Length of credit history
• Newly established credit
• Outstanding revolving balances
• Inquiries
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Credit
Helpful Tips
Revolving balances below 50% of the available limit.
Bankruptcies need to be at least 2-4 years past the discharge date.
Limit unnecessary inquiries.
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Income
•Documentation
•1 month of paystubs
•2 most recent w-2’s• Salary or Hourly?
• Commission or Bonuses?
• Self-Employed?• 2 Years Personal and Business returns
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Income
• New job may require additional documentation.• Written VOE
• Job Offer Letter
• Gaps in employment?
• Declining or inconsistent income?
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Assets
•2 Months of bank statements.• All pages• Large deposits?• Insufficient funds/bad checks?
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Assets
•Use of non-liquid accounts• Retirement accounts• Stocks
•Need terms of withdrawal or proof of liquidation of funds.
•Gifts.
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Union Plus® Mortgage Program provided by Wells Fargo Home MortgageExclusive benefits designed for union families
Jeff Neistein
Branch Manager
818 808-1038
Down-payment Assistance Programs -DAPS
•NHS Platinum – 3-5% Grant
•CALHFA – 3% Loan
• LIPA – up to $60k.
•MCC – 15-20% Federal Tax Credit
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Thank you for attending!
We’re happy to answer your
questions. . .
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
© 2010 Wells Fargo Bank, N.A. All rights reserved.
P R E S E N T E D B Y :
M O R G A N M . H A L F O R D , E S Q .
C A R L S O N & C O H E N , L L P
Aspects of Property Disclosureand
Taking Title
Disclosure Obligations in Sales of Real Property
Sellers have affirmative obligation to disclose material facts about property to buyers
Agents have affirmative obligation to both discover and disclose material facts about property to buyers
Eaton v. Strassburger (1984) 52 Cal.3d 90
Court held that real estate agents have duty to disclose facts that are known, as well as facts that should be known to buyers
Agent has affirmative duty to conduct reasonably competent and diligent visual inspection of property and disclose all facts materially affecting the value of the property
Civil Code § 2079, et seq
Mandates agent conduct “reasonably competent and diligent” visual inspection
Defines standard of care owed by real estate brokers to buyers
Also provides that buyers have duty to exercise reasonable care to protect themselves (reasonable inspection)
Applies to residential property
Written Disclosures
Sellers must provide buyers with written disclosures of known property defects
Civil Code § 1102
Transfer Disclosure Statement (TDS)
California Association of Realtors Forms
Statewide Buyer and Seller Advisory
Buyer Advisory Form
Agent’s Visual Inspection form (conforms with Civ. Code §2079)
Mold Disclosures
Buyer’s Inspection Elections – Covers 30 separate areas which should be examined by buyer during due diligence
Termite Inspection, water heater, smoke detector forms
California Association of Realtors Forms
Septic Inspections, Property Monument, New Construction Compliance Forms
Natural Hazard Disclosure Statement
Megan’s Law Database Disclosure
Buyer’s Inspection Waiver
Buyer’s Inspection Advisory
How Do You Protect Yourself?
Be Proactive!!
This is likely the single biggest purchase you will make in your life! Now is the time to pay attention, ask questions, and take steps to protect your
investment!
Take an active role in conducting due diligence inspections
Home Inspections
Always insist on conducting your own home inspections during due diligence period
Check inspector’s credentials!
CREA Certified
Be present at inspection
MAKE SURE YOU REVIEW THE REPORT!!
Beware – Anyone can call themselves a “home inspector”!
Many inspectors are members of a trade association but often many do not have insurance or limit their liability to the amount paid for home inspection, which may be as little as $200 or $300.
Pay Attention!
Pay attention to the details of the property during due diligence period
Check out property lines, settling, cracks on the side of the house or in the foundation
Drainage issues
Location of fences
Location of trees and their roots
Pay Attention!
Physical characteristics of roof, gutters, chimneys
Open cabinets, check for stains
Look at ceilings, walls
Open closets, look inside
It doesn’t necessarily take a trained eye to see a problem, or to some extent, a cosmetic cover-up
But, often the most expensive problems cannot be seen by a visual inspection…
Mold is the most specific and difficult type of problem that can cause many thousands of dollars in damage but which may not be visible. Be
attentive to any water damage, and if there’s damage, hire a mold inspector!
Planned Development Disclosures (Condominiums)
When you are buying into a planned community, the property is likely governed by documents and statutes which dictate the operation of the Homeowner’s Association
Conditions, Covenants & Restrictions (CC&Rs)
CC&Rs are recorded in County Recorder’s office
Sellers must make CC&Rs available to buyer
CC&Rs govern the use and many aspects of the property
HOA board adopts rules and regulations pursuant to CC&Rs
HOA financial information – including assessments – both regular and special
Any pending litigation, insurance claims, status of prior settlements
Homes from Builders – New Homes
New Construction leads to potential difficulty by the buyer
Inspecting new home requires careful eye to details
Qualified home inspector
Lender’s Duties After Foreclosure
Generally lenders re-selling property after foreclosure are exempt from disclosure laws
Often buyer does not receive documents (such as TDS)
Home Inspection property very important
Anything that Affects the Value or Desirability of the Property
Deaths on the Property
Any death occurring on the property within the past 3 years must be disclosed
Statutory requirement under Civ. Code § 1710.2
The fact of the death must be disclosed to the buyer
Anything that Affects the Value or Desirability of the Property
Noise
Neighbors
Airports
Rapid Transit
Chicken coop down the street
Toxic dumps
Limitations on Seller’s Liability
Those areas which the seller knew or should have known
If seller doesn’t know about the condition, it is difficult to hold seller responsible
Limitations on Seller’s Liability
Those areas which the seller knew or should have known
If seller doesn’t know about the condition, it is difficult to hold seller responsible
Avoid Unpleasant Surprises!!
Relationship with Agent
Agent representing someone has fiduciary duty – highest duty imposed by law
Agent representing the other party has duty to disclose what they know
Must respond truthfully to inquiries by either party
What Should You Do if You Discover A Problem?
Immediately contact agent!
Remedies
Mediation
Arbitration
Broker’s Involvement
Litigation
How to Take Title
Married
If married and property is community property best way is to take title as spouses as community property with right of survivorship
Property passes automatically
“A married man / woman” means formerly married
“A single man / woman” means never married
Joint Tenancy
The automatic passing to the surviving joint tenant
Tenants In Common
• Each individual owns an individual interest in the property and the property does not automatically pass to the tenant in common on death
• Portion passes to heirs
In Trust
• “Trust” part of the estate plan
COMMON WAYS TO TAKE TITLE
1. Married
2. Single Person
3. Two or More Individuals (Not As Married Couple)
4. As Trustee of Family Revocable Trust
Community Property with Right of Survivorship
Married as Sole and Separate Property
Unmarried Man/ Woman (Divorced)
Single Man/ Woman (Never Married)
As Tenants in Common or as to ____ % Undivided Interest