Now that the prices on San Diego Condo are at their lowest point in a decade it’s time to write about the mysteries regarding such terms  as common area, HOA fees and CC&R’s

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What do HOA fees pay For? Well if You’re thinking Downtown San Diego condos the HOA fees could include a Concierge, 24 hour Guard and Valet and maybe even an on site Manager. Usually you can expect the HOA fees to cover the basics such as common area maintenance, trash pick up, hot water and limited insurance, though every Condo complex or building  will cover different items,  you can expect the fees to cover at least  the basics.

What is referred to as the Common Area includes most anything that is outside the condo such as the entrance, lobby, elevators, pools and spa, fitness center, clubhouse, hallways and green belts. Most all condo HOA fees pay for the common area maintenance upkeep.

One important aspect of buying a San Diego condo is the health of the Reserve Fund, the Reserve fund is like a savings account were a portion of all the HOA fees collected establishes the Reserve. As the word “Reserve” implies,  the fund is a hedge for the unforeseen occurrences that happen during the life of the complex or building.  These funds can go toward many different issues that may occur, such as roofing problems, road work, common area upgrades etc.

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A low funded Reserve Account could end up having each Condo Owner “Assessed” or billed for cost concerning the occurrences not covered by the Reserve. Getting hit with an assessment is not good and it’s one of the main worries of Condo Owners. Condo assessments are a whole other subject on to itself.

Most every condo or building will have a set of rules Called the CC&R’s (Covenants, Codes and Restrictions).  These rules will cover such things as parking, pool hours, BBQs on the balconies and other such things. The HOA Board Of Directors enforce these rules written in the CC&R’s handing out fines for those who habitually break the rules.

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Condo life can be an excellent life style and most definitely a  value in a time when it is becoming increasingly  more difficult to find a house in a
equivalent price range.

Hi everyone, over the next couple of weeks I am going to write about how the San Diego real estate market performed in 2010. Today I will give you the statistics for the UTC Condo Market.

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With two weeks left in the year 242 UTC condos have sold with an average price of $309,514 and an average square footage of 983.

Let’s break it down by Bedroom

Studios

5 Studios sold for and average price of $158,880

Average Square Footage 420

Average Days on Market 72

1 Bedrooms

85 One bedrooms sold for and average price of $194,050

Average Square footage 657

Average Days on Market 76

2 Bedrooms

125 Two bedrooms sold for and average price of $354,387

Average Square footage 1,103

Average Days on Market 72

3 Bedrooms

24 Three bedrooms sold for and average price of $441,932

Average Square footage 1,447

Average Days on Market 56

4 Bedrooms

3 Four bedrooms sold for and average price of $903,000

Average Square footage 2,450

Average Days on Market 78

Currently there are 87 condos for sale in the UTC area.

UTC Condo Tour

2009 UTC Condos Sold 255

2009  Average Square Footage 962

2009 Average Sales Price $297,963

Steven Gluyas is a San Diego Realtor with 15 years experience specializing in San Diego Condos for sale.  Steven can be reach at 858-405-3797

What is Mortgage Insurance and Why Do We Need It

Why do you need mortgage insurance? The answer to that is lenders require it.  Say you’re buying a new San Diego Condo and you have less then a 20 percent down payment; the lender will required you to purchase Mortgage Insurance (MI).

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Mortgage insurance, also know as mortgage guaranty, is an insurance policy which compensates the lenders or investors from losses due to the default of a mortgage loan, thus limiting the lenders  exposure to financial loss.

The cost of mortgage insurance can be incorporated directly into the mortgage in a process called capitalization.  Having you MI capitalized the premium becomes an additional tax deduction. Mortgage insurance contracts issued in connection with a home purchase after 2006 may be treated as mortgage interest and therefore is generally considered deductible.

How Long Must I Pay Mortgage Insurance

You won’t be stuck with MI forever, lenders are required to terminate borrower paid PMI at 78% LTV (Loan To Value)  based on the amortization schedule if the loan is current. If none of the above is done, PMI will terminate automatically at the midpoint of the loan term.

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Government back loans such as FHA will require MI insurance as well but if you like to get around paying for mortgage insurance you might like to take a look at Fannie Mae’s HomePath loan.  The HomePath Loan will not require mortgage insurance. Using the Homepath loan option you can buy a San Diego Condo or home with as little as 3% down payment without the extra costs of MI.

One way to avoid Mortgage Insurance is to make a 20% or above down payment on your new San Diego condo or home. Please read the article below on owner occupancy levels and MI requirements.

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Steven Gluyas is a San Diego Realtor with 15 years experience specializing in San Diego Condos. Steve can be reach at 858-405-3797

One of the key factors to Mortgage Brokers processing a loan for a San Diego Condo is the owner occupancy level. The simple fact is if you’re applying for a convention loan with less then 20 % down payment you will need mortgage insurance. Now days most Mortgage Insurance companies are now requiring a 70% owner occupancy level in the condo complex or building.

My guess is that there are maybe 15% of all San Diego condo projects that have over 70% owner occupancy levels

VA and FHA loans require a minimum of 51% owner occupancy rate

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What is Owner Occupancy Level? It’s the number of condos actually occupied by the owners themselves vs. the condos that are investment properties which have been rented out.   The Lenders and MI companies view having a high owner occupancy level as advantages because it’s their belief that owners will take better care of the complex than a Renter would thus maintaining the condo project at optimum  levels .

Most of the management companies who provide the occupancy rate to the Home Owners Association track the ratio by determining that who ever gets their mail at an off site address, other than the subject condo, is an non-owner occupant (Renter).

Management companies need to reassess on how they calculate owner occupancy, many times owners who use the condos as a 2^nd homes (vacation homes) or use P.O. boxes do not have their mail delivered to the subject condo but to their main residence or boxes.  This makes sense if you like your mail delivered in a timely fashion. Here lies the problem.

2^nd homes qualify as owner occupant, so saying that, using the mail to determine owner occupancy is flawed.

Many times the management company are supplying inaccurate information to the lenders, lowering the owner occupancy rate by default

This directly affects the Seller trying to sell his condo and the Buyer trying to obtain a loan.

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This needs to change, Home Owners Associations need to require management companies to change their system of calculation and develop a more accurate way to determine owner occupancy levels that are fair and correct. It’s in the best interest to everyone concerned.

Prices are good, mortgage rates are good, basing a loan application on owner occupancy levels using a flawed system is not.

Steven Gluyas is a San Diego Realtor with 15 years experience specializing in San Diego Condos

Is it a good time to buy a San Diego Condo or Home?

One significant reason why it’s a good time to buy a San Diego condo or home is the prices; San Diego condos have dropped approximately 30% since the high water mark of 1996. I’ve been a Realtor in San Diego for the last 15 years and it’s my opinion that now is a very attractive time to buy a home in San Diego because we are very close to the bottom of a market decline that could be one of the biggest in history.

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Another reason why it’s a good time to buy is that along with the 30% discount you are also getting historic lows in interest rates which as of today are hovering in the low 4′s for qualified buyers. This amounts to at least a 50 year low in mortgage rates and combined with the discount in housing prices we now have the “Perfect Storm” for buying a home in San Diego County.One could argue that the prices in San Diego could fall even more, maybe, but not by much. I believe we are close to the bottom if not there already, saying that, locking in today’s interest rates will most likely offset any decrease in price.  I’m sure the interest rates are going to rise, it’s only a matter of time. Locking in today’s rates and prices makes sense for the first time home buyer here in San Diego.

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As a home buyer here in San Diego hire a Realtor to represent you as a Buyer’s Agent, this is the best way to go, why not have a professional on your side who can guide through the negotiations and home buying process. As a home buyer you won’t be charged a fee, the Buyer’s Agent Fees are paid by the Seller, this  commission is split between the Seller’s Agent and the Buyer’s Agent.

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Steven Gluyas is a San Diego Realtor with 15 years experience specializing in San Diego condos for Sale, he can be reach at 858-405-3797

Lenders are making it tough on San Diego Condo Buyers, the top two reasons in which a lender may decline to finance a condominium are litigation and low owner occupancy levels (Below 50%). This applies to conventional loans as well as government back loans such as FHA

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Condo Litigation usually means the HOA (Home Owners Association) of the building or condo complex has filed a “Defect Lawsuit”. The lawsuit is generally brought against the developer usually within the first 10 year span of construction. This litigation could pertain to defects in particular units, phases of the development and/or the common areas. It is during the time spam of the litigation process that Lenders will refuse to lend on the property.

Prices in the San Diego Condominium complex or building generally fall due to the lack of qualified buyers (Cash Buyers) and lender financing. It is not unusual to see Investors paying cash come in and buy up litigated property at a discount.

Most if not all Lenders require a document called the Condo Certificate, a document that states information about the status of the condominium building. This is the document the lenders will look at to establish the current status of any litigation, owner occupancy and other issues that may cause concern to the Lender.

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Depending on the type of litigation and areas of the complex involved, buying in a litigated complex can result in a very significant discount on market value. There are a few ways of getting around litigation such as paying cash, or paying a large down payment or even paying a higher interest rate.

Working with an experience Realtor will help keep you updated on which property is in litigation and which has a low owner occupancy level saving you a lot of time and effort in the buying process.

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Steven Gluyas is a San Diego Realtor with 15 years experience specializing in San  Diego Condos.

Steven can be reach at 858-405-3797

So you want to buy a San Diego short sale.

I see it all the time; Listing Agents pricing their short sales way below market value, I’m talking sometimes $50,000 to $100,000 below market.

This is a strategy used by Listing Agents to generate offers, plain and simple, if you price a San Diego condo or home at a ridiculously low price you will generate more then just a few offers on the property.

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You can bet your bottom dollar that the banks have not and will not agree to a purchase price so out of proportion. It’s still the Wild West out there with no set standards or guidelines to pricing short sales. The Listing Agent must submit to the bank a document called a BPO (Broker price opinion) with comparable sales on the subject property, so how are they reconciling the list price and the actual market value?

There not

The Listing Agent job is to sell a short sale as fast as they can, some Agents do this by pricing the property extremely low , generate multiple offers and then  submit one or more offers to the bank and wait.

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What are they waiting for?

The Bank Response, this is what everyone, Listing Agent, Seller, Buyer’s Agent and the Buyers are waiting for (this could take 2-3 months or more). Generally the response is going to be more in line with the comparable sales then the price the Listing Agent came up with.

Once the official response comes in the Listing Agent will use that number to counter back either the one offer they choose to work with or all offers submitted (Again, there are no set standards on who’s or how many offers they will choose to work with) for that “Best and Final Offer”.

Usually the Buyer who comes in at the banks response or higher will make the deal.

The Bank response most times will still be an attractive price, if this weren’t true why would anybody deal with a short sale in the first place?

So how should one proceed on a San Diego condo or home that has a price that seems too good to be true?

First, work with an experience San Diego Realtor, who has access to the comparable sales. Your Realtor can research the complex or neighborhood for recent sales on comparable property, decide on which, if any, were short sales or foreclosures and then come up with a reasonable price to offer. Depending on the home for sale, a Buyer has a much better chance at buying a short sale by making an informed offer to purchase then one who comes in at list price or lower.

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I am not saying that this is the rule; a lot of Listing Agents will price their listings at a more reasonable price in line with what other “like” properties have sold for. The key to this game is to know which is which and act accordingly.

It’s a Buyer’s Market in San Diego, there are deals to be had,  take advantage of it!

Steven Gluyas is  a San Diego Realtor with 15 years experience specializing in San Diego condos

Phone : 858-405-3797

Email : steve@shopsdhomes.com

For those out there looking for a deal by buying a foreclosed property here in San Diego, you might want to take a close look at Fannie Mae’s HomePath program. In my opinion it could be a great way to purchase your new San Diego condo or home.

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Fannie Mae’s REO brand, HomePath, was created early in 1999. Fannie Mae has over 89,000 real estate owned (REO) properties on their books; over 650 of those are in San Diego. These Fannie Mae owned properties eligible for the HomePath financing offer an affordable opportunity to buy a foreclosure with up to 97% financing. Yes, that’s less money down then an FHA loan.

Some advantages of the HomePath loans:

•    3 % Down payment
•    No PMI (mortgage insurance) required
•    No Appraisal
•    Renovation Financing
•    Up to 6% in Seller concessions (Owner-occupant)
•    Only 10% down on 1 unit investment properties
•    Allows Investors to finance up to 10 Properties
•    First Look Marketing Program

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I know its tough working with the Owner-occupants going against Investors who are usually going to blow us out of the water by paying cash with no contingencies.

Most of these properties are open to offers to investors as well as owner-occupants during the first 15 days after they come on market.

For the HomePath properties that qualify the First Look Marketing Program will only consider offers from Owner Occupants or Buyers using public funds for the first 15 days. This offers a distinct advantage over a normal REO listing, taking the Investor out of the competition. If the property is still for sale after the First Look Marketing period expires, Investor offers may be submitted and will be considered.

Fannie Mae’s HomePath Program is worth taking a look at.

Steven Gluyas specializes in San Diego Condos and Homes and can be reach by email or 858-405-3797

OK, great you’ve been pre-approved for a loan and now have gone out and looked at a few San Diego Condos or homes and found one you would like to make an offer on.

Your Realtor is there to guide you through the process and write the offer on your behalf, using the standard RPA-CA Purchase Agreement.

This agreement includes a clause giving the Buyer the right to perform a physical home inspection using a professional home inspector. These home inspections are paid by the buyer and can run anywhere from 300 to 500 dollars or more depending on the square footage of the home being inspected. Usually it is recommended that the Buyer be present during the inspection so that he can see first hand what, if any,  problems exist, ask questions and get a good take on the condition of the home.

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Some of the Items the Home Inspector will be looking at:

* Roof condition
* Water heater
* Furnace
* Electrical
* Foundation
* Plumbing (Checking for leaks)
* Fixtures
* Appliances (stove, oven, microwave, fridge)
* Fencing
* Safety issues and code violations
* Windows
* Garage door openers

They even test the doorbell!

You will receive a full written report  based upon the information discovered in the inspection.  The Buyer has a right to ask for repairs, request a credit to be paid through escrow in lieu of repairs or cancel the agreement or take other action. Remember, in most cases, you are not buying a brand new home, so the Seller may not be inclined to repair everything that you’ve requested. Also, if you are buying a short sale or REO,  there might not be any money for repairs.

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The Home Inspection is designed to protect the buyer from unknown conditions and give piece of mind that you are buying a home without any major structural defects

UTC is a trendy and popular community just east of La Jolla in San Diego California, UTC gets its name form the huge mall, University Towne Center (which is now named Westfield Mall), located at the east end of the community. The University Of California San Diego in La Jolla is less then one mile away.

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There are two basic areas to UTC, one, UTC made up of mostly Condos and Town Homes and two, UC (University City) where the majority of homes are single detached with just a few condo complexes in the mix. UTC  is centrally located and you can be on the beach at La Jolla shores in minutes, 20 minutes from Downtown San Diego and the airport. I love how close everything is, I actually go mountain biking 4 times a week in Rose Canyon and Marion Bear, a 11 mile loop.

Also, the City of San Diego is  planning a Mid-Coast extension of the San Diego Trolley from the Old Town Transit Center 11 miles  to the University City community serving major activity and employment centers such as the  University of California San Diego campus and the University Towne Centre (UTC) shopping center. This is part of the Mid-Coast Corridor Transit Project. It is planned to be completed by 2015.

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The Nobel Recreation Center located on the east end of  UTC , was completed in 2007. The facilities joint project features a 30 acres of municipal parks with children’s play areas, off-leash dog parks, two softball fields (one lighted), two soccer fields, shaded picnic tables, barbecue pits, exercise circuit, outdoor basketball.  Community buildings include a 16,000 foot branch library, and a 10,000 square foot gym. this is truly a state -of-art recreation area built for the community.

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UTC is also great for investors looking to buy income property, being situated so close to UCSD, the rental possibilities to students in the area is limitless. Subdivisions in the UTC area such as La Jolla Colony and Renaissance are worth a close look as well, some of these complexes such as Valencia and Casabella sell for just under $1,000,000, but this is more of the exception then the rule.

With one bedroom condos starting in the mid 100′s UTC is also affordable for the first time buyer or parents looking at housing for their college bound students. Two Bedroom, two baths start in the mid 200′s.  This is one Community in which the saying “location, location, location” applies.

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