Here are some questions often asked by buyers:
What is Mello Roos ?
When developers first construct a tract of homes, they have obligations to pay for public services including utilities, external streets, schools, sewers, and other infrastructure. The state of California allowed them to finance these with special bonds which became known as Mello-Roos. Special tax districts were created, and a fix amount of money was set aside for the agencies to use in their construction needs. These bonds were usually for 20 to 25 years, and they are paid by the current property owners each year until they expire. Mission Viejo had very few Mello Roos tax districts, Trabuco Canyon ( and Coto de Caza ) were mixed, Rancho Santa Margarita is “all Mello Roos” as is Ladera Ranch. The homes in Trabuco Canyon and RSM are now nearing the age where the bonds are expiring and being removed from the tax bills.
Is it OK to make a super low offer ?
You can offer any amount you want. In some cases, if the asking price is well above market value, a much lower offer reflective of comparable sales may be considered. Sometimes a “lowball offer” is seen as an insult and the owners will not even respond. If the home has been on the market for awhile, the owner may elect to respond with a counter offer closer to what they are willing to accept. If the market is fast moving, low offers will not be considered because there are often others pending which reflect what the owner is seeking. Yes, you can make a low offer, but do realize it may prevent you from actually being able to engage a deal to buy the property.
How much does it cost me to use a realtor ?
Sellers pay the total commission for the realtor, so as a buyer, you receive the services for free.
My aunt is a realtor. If I find a property, is it OK to use her ?
Sure it’s OK to use your aunt, if she took the time to find you a property. If you use the services of another agent because your aunt was too busy to help out ( or told you to find the house and she’d get it for you ), wouldn’t it be fairer for you to reward their hard work by letting them receive the commission they earned ? It doesn’t come out of your pocket, so using your aunt after someone else has spent time, and money, and perhaps passed on other clients to help you, is not a financial incentive for you. Besides, if your aunt was too busy to put in the work, can you be sure she will now spend the time making the transaction work out for you ?
How much house can I afford ?
Before looking for a new home, it is wise to meet with a mortgage broker and explore this question. A good broker will study your earnings over time, and what you can expect to earn in the years to come. They will also look at your debt, credit scores, and loan eligibility. You will also need a down payment of about 20% of the purchase price. When the market collapsed several years back it was because many people had purchased homes with financing they really couldn’t afford. Some loan agents enticed them with terms that seemed to good to be true, and they in fact were a disaster. Loans defaulted, property values plummeted, and many people were hurt. The easiest way to figure what you can afford is to multiply your monthly guaranteed earnings by .25. This is the amount you can afford to pay for the monthly mortgage payment plus property tax plus insurance plus HOA. Plug that into a mortgage calculator to see how much you can borrow, then add the money you have available for a down payment. This will tell you what you can afford.
Should I remodel, or move ?
Do you love your neighborhood ? Do you love your home ? If so, then a remodel may be the best option. The caution is that you don’t want to overbuild for the neighborhood because you may not get the return of your costs. If the house is your “home” and you intend to stay for a very long time because you love the neighborhood, then the remodel could be the perfect solution. Before making a final decision, get the costs for the remodel, and then look at other residences that will meet your needs right away. With research, you can reach the right decision for you.
Should I avoid an HOA ( Home Owners Association )?
Maybe. When considering a property in an HOA, be sure to review the minutes of the meetings for the past year. Also check the reserves. Look carefully at the condition of the streets and common properties. If repairs are needed, and there is no money, you may well be hit with a special assessment. If there is a lot of conflict noted in the minutes, the HOA may be a problem. Of course, if the community is well maintained, has decent reserves, and seems responsive to the residents, the HOA may be increasing property values and be a major benefit when you buy your home.