First Time Home Buyer’s Seminar - csun. · PDF file34 Homeownership Works! that’s...

First Time Home Buyer’s SeminarNovember 12, 2015

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