Connor MacIvor Santa Clarita real estate radio (00:00):
Good to everybody. Thank you so much for tuning in. I have Connor MacGyver, your local real estate professional Santa Clarita home expert located of course in Santa Clarita, California, which is just the next city north of the city of Los Angeles. This is going to be a real estate update. We're here on April 1st, 2021, and we've gone through the COVID. It's still going on now. The vaccines are available. I think that's going to change the dynamic in the market a little bit, but don't forget. As we track back, we did have a lot of refinances. I mean, a lot of refinances. So most of the people that were slotted to kind of sell and maybe break free of whatever, they're kind of relaxing a little bit at a time. Doesn't seem to be as of the essence as maybe it would have if they still had a higher interest rate.
Connor MacIvor Santa Clarita real estate radio (00:46):
And a lot of people did that. I'm talking about the Santa Clarita market. I'm talking about real estate here locally. Uh, the best place to go is going to be, of course, our blog to get further information and news. Then I'll give you the update today. We'll talk about inventory. We're going to talk about the market. We're going to talk about some of the issues that we see coming up and have seen with regard to buyers in this market. What to watch out for the things that are of course, more, most important to care about. And we'll also get into agent selection, but first and foremost, this particular market, if you aren't, uh, looking at the data and you really haven't jumped in yet to real estate, or try to maybe Mark your place currently, we're seeing that it is a seller's market, and that is because of lacking inventory.
Connor MacIvor Santa Clarita real estate radio (01:32):
So because the inventory is so low, there are people out there that are looking to sell their properties, of course. And when they do come on, the market, those properties are really obtained at a premium. Now, of course, it depends on the property itself, how it looks, the kind of repair. Is there any competition? What's the price point. And also where is it within the sweet spot? If in fact is once you get over a million dollars in Santa Clarita Valley, the dynamic changes a little bit. So it takes longer to sell those properties even at a seller's market, but not as long as it might take. If the market were more let's say even, or if the market were in a buyer's condition, which currently it isn't, we haven't seen a buyer's market for quite a few years here in Santa Clarita Valley. The market's been more even in the past, but really we're off the chart and on the seller side currently because of that and because of the lacking inventory, most of the properties in the sweet spot, which in Santa Clarita is somewhere.
Connor MacIvor Santa Clarita real estate radio (02:28):
If you can find one single-family residence between $450,000 and 850 to $890,000, that's about the sweet spot, those properties in that price range, they're moving relatively quickly within a few days. And there are multiple views, lots of activity within the first 24 48 to 72 hours. The viewings of those properties, of course, in Santa Clarita career, I'll set up by appointment only there aren't open houses currently allowed as of April 1st, 2021. I would assume that's going to come back at some point, but right now the vaccines are kind of fresh. Now it's kind of open up to most of the public, but again, it's not opened up to everybody. So I think once that answer's given and a lot more people get it, if that's what they choose to do, I believe that the market will start to open up a little bit. I don't know if it's ever going to be back to what it used to be as far as showing scope, but now everything's appointment only, and everything is covered with a COVID disclaimer.
Connor MacIvor Santa Clarita real estate radio (03:27):
In fact, any buyer that wants to see real estate in this present market has to be given and actually formally sign a document that talks about COVID, and there have they been around COVID have they, do they know anybody that has it have? How do they feel? You know, they've been traveling lately and they have to actually sign it. And it also gives information regarding the seller's responsibilities, as far as the property goes and how they have to prepare for viewing and also by our actions and activity when they get into the property, what can they do and what can't they do? So this is something that every buyer has to sell or sign, excuse me. And then the actual sellers of these properties, get the notification, and then they approve the showing or not don't approve the showing, but it depends. It depends on the property.
Connor MacIvor Santa Clarita real estate radio (04:18):
And it depends on the time slots, most of the showings. And this is a little shocking to some people because you know, you're about to spend half a million bucks or better. The showings are 15 minutes in length. If you're going to be looking at a 3,500 square foot house that happens to have a large backyard and a pool, and they give you 15 minutes to view it, that's usually not enough time. So we try to ask for longer timeframes to view properties, but in some cases, the sellers realistically know that somebody is going to be okay with 15 minutes. In fact, multiple buyers are going to be okay at 15 minutes and they're more than likely going to like the house because there is nothing else like it on the market, just because of the supply and demand scenario. So they're going to go ahead and take that 15 minutes shot.
Connor MacIvor Santa Clarita real estate radio (05:04):
They're going to look at it. It's going to be enough for them. They're going to come back. They're going to go to their agent. They're going to write the offer. And they're going to have that offer submitted to the seller's agent as soon as possible. Having said that, we'll talk a little bit about buyer drive and also what buyers need to do. And before you can even step forward, in some cases with even looking at properties, the sellers are going to expect the buyer to also send over a pre-approval letter. Now in this particular market, that's interesting because I've always been of the school that if in fact, I'm going to be sending a pre-approval letter, that preapproval letter is going to match the amount on there's going to match the amount of the offer we're making. But we're talking pre-offer. We're talking previewing, looking at the property even before looking at the property, submitting a letter that shows the qualification amount and the buyers are being requested to do this.
Connor MacIvor Santa Clarita real estate radio (05:57):
So your first step is a buyer. After you speak with me, you want to go ahead and step forward and you want to talk to that local real estate lender. That's either referred to you by me. Or if you know, somebody got some friends or family or have a referral, then, of course, you go to them. But at the end of the day, I believe that because you're not paying my fee, but you are paying the fee of the lender. It's not bad to get at least a couple of opinions when it comes to borrowing money. That's very dynamic. There's a lot of bells and whistles, a lot of moving parts, very important to know that who you're dealing with is going to give you a fair deal. Maybe not the best deal, but a fair deal. And there is some trade-off, right? You might find somebody that gives you a better deal, but they're not able to get on the phone.
Connor MacIvor Santa Clarita real estate radio (06:45):
They can't do any adjustments to the prequalification letters and they just don't seem to be very service-oriented. They might actually not even answer your phone call. In fact, they might not be available on a Saturday evening after I show you a property that happens to be within your price range, but
maybe at the top. And you want to see what those numbers look like as far as what your payment's going to be. Maybe they're not available. So then we have to wait, but the seller is going to be reviewing offers Sunday morning, and it might be too late at that point. So having a good point of contact, cell phone number, local number, home number, whatever it may be to a lender is really, really important. And to make sure that they are accessible and available to help you after hours on holidays.
Connor MacIvor Santa Clarita real estate radio (07:34):
And of course on weekends, this is a good step. When you're talking about loans and lending, a lot of people get a little blind when they start watching television and they see these interest rates that are promised these great deals out there. Once they start to see those, then it starts to create issues because those are known as teaser rates. And a lot of cases there's really no validation or verification as to whether or not that rate's going to apply to you. And in fact, that rate might be very, it might be first, you know, best case scenario with somebody. That's got a FICO score. That's, you know, above heaven and they have the backing and credit report to basically show that they are going to get the best possible deal in the world. And a lot of cases, that's not the case for all of us, other people.
Connor MacIvor Santa Clarita real estate radio (08:24):
So finding out whether or not you qualify, what you qualify for, and what the terms of your agreement are going to be is incredibly important. That's where that local lender comes into play. You're going to be giving them all of your information and they're going to be able to produce a qualification. Now it's not going to be the same day. They might be able to give you an idea of what you qualify for. But with most reputable lenders, that idea is not enough to substantiate them, producing a qualification letter or pre-qualification letter from them. A lot of those need to be qualified, and that goes all the way through. So they're going to have to run all of your credit. They're going to have to look at everything line by line. They're gonna have to get other information from you, paychecks. W2's all of that other information.
Connor MacIvor Santa Clarita real estate radio (09:15):
And if you're self-employed employed, of course, profit and loss statements, those sorts of things, but they need all that information to be able to pass that through their system and get approval. Once they have approval, then you're good to go. But sometimes that takes a few days, if not a week, it just depends on the lender and how busy the lender is and how fast you can give them all the information they request. Typically, they'll send you an email and it'll have a list of information. And when you send it in, there'll be a recipient. It might not be the lender themselves, but it's gonna be somebody that works for them and they will receive your information. And then they'll pass it off to the people that need to review it. My suggestion is to talk with your lender and says, listen, I really get my feelings hurt often, and I get them hurt quickly.
Connor MacIvor Santa Clarita real estate radio (10:06):
So it would, I would be hurt if you didn't communicate with me from this point on, I really don't want to hear from anybody else on your team. I want to hear from you. That always helps my clients when they're dealing with the lender, because I don't like the tail to get too long. Where now you're dealing with three other people that you don't know from Adam and they weren't the ones you interviewed for the job of being your lender. And none of them know what the other party's doing. That's kind of the fall apart of these big teams, these mega lenders. So it's nice to have that local resource. That's going to be able to deal with you personally and promptly and really gives a crap about customer service. That's
super important. All right. So that's the buyer advantage right now because of the multiple offers because of what's going on in the market.
Connor MacIvor Santa Clarita real estate radio (10:50):
In a lot of cases, cases, these properties might appraise for a particular amount, but buyers, when they make that offer, they're stating, you know what I actually don't want to, or don't care about what the property appraises for. I'm going to step forward and pay the difference. So if the property is priced at 700,000, this buyer may have been around the block. A few times may have been frustrated and they look at the property for sale at 700. And they say you know what? We're going to offer at seven 40 because we want to be the highest and want to get the property. In that case, maybe 700 is the maximum amount that the property may appraise for. We won't know until the appraiser rolls out to the property and the appraiser actually works for the buyer's lender. Once that happens, then they'll come back and they'll give an amount.
Connor MacIvor Santa Clarita real estate radio (11:38):
But before that, we're talking at the time of offer, some of the buyers are putting out there that they don't care what it appraises for. They're going to pay the difference no matter what that is, which could create a problem with them depending on their loan type, they might not be allowed to pay the difference. In fact, sometimes the bank stopped them at the appraised value. So that's something to look into. If you're one of those that want to jump on that and actually offer higher and remove that appraisal, contingency yourself, thinking that that's going to make it or make you better compete, compete against those other offers that are being submitted. Now, of course, today, we see that cash of course is King. That seems to be typical. Then after that conventional loans are very good. As far as sellers are concerned because there's more money involved in that transaction because the percentage of down payment happens to be higher.
Connor MacIvor Santa Clarita real estate radio (12:36):
So for a conventional loan, the typical run of the mill garden variety usual, conventional is usually 20% down. Now, in some cases, there's a 15 and a 10 and a five and a 3% down conventional loan. But the sellers look for those funds because with the offers are being submitted, your proof of funds, POF. You're going to see that. So it's going to be your bank statement, some kind of an IRA, something that shows you have these funds, and you'll be able to finish and close escrow. If the seller accepts your offer. Now at the end of the day, there are all sorts of reasons for you to cancel the escrow. If you decide the house isn't for you, you haven't and contingencies, which has some cases from the buyers. Those are being whittled down contractually that 17 days, but maybe you want to make your offer a little sweeter.
Connor MacIvor Santa Clarita real estate radio (13:28):
So you offer 10 days for inspections, which is enough time to get those done. But it is a little tight. You will have the inspector roll out to the property. Somebody you might know if they're certified, bonded and experienced and knowledgeable, all those sorts of things. If you don't know anybody, then we have recommendations on the home inspector front, you pay them their four or five, $600, whatever it may be, depending on how to size they'll go out to the property within those 10 days, hopefully within a couple and they'll do a walkthrough of the property and they will do their inspection. They'll provide a written report, which then later you'll be able to look at it. You'll be able to develop a potential request for repairs from now all real estate in California. You by herself, there, even your sellers listen up. All real estate in California is sold as-is.
Connor MacIvor Santa Clarita real estate radio (14:16):
That's just the way it's intended. And that's the way it is on contract. However, you could ask, even if the agent puts in a clause and reminds you via some kind of a counteroffer, something that you're willing to sign to be able to get the house still, there is no harm in asking. And please remember that agents that say, we're not going to ask because the property sold as is, I think they're lazy. And they should in fact do that for their client, because then they've served. They've served their client's trust 100%. So that's on the buyer. End of it. I know buyers are frustrated. I think in the future, we're going to have a change in inventory. My predictions is, are as follows. Now you remember last year when COVID broke loose, it was a mess real estate shut down. It actually stopped for quite a while.
Connor MacIvor Santa Clarita real estate radio (15:11):
Open houses were no more. And then they started developing paperwork and things to sign and disclosures. The lawyers were very busy and finally, they came to some agreements on how properties were going to be shown how people are going to conduct themselves and that approval process to get in and view these listings. So they fix that also at that time, sometime around May or June, the banks, Fannie Mae, Freddie Mac, and some of the other banks, they decided, you know what? We're going to make this a little bit easier on those people that are holding mortgages currently, because of COVID the way COVID seems to be impacting almost everybody. We're going to allow them to get involved in a process called forbearance. Forbearances where you don't have to make any payments for a specified amount of time. And in this case, a forbearance you needed really to do nothing, at least with the institutions that I mentioned, and at least from what my clients have told me, you have to do, you had to do nothing but call and say, COVID effected you.
Connor MacIvor Santa Clarita real estate radio (16:12):
And then they said, okay, we're going to put everything on hold for the next year, the maturing date maturation anyway. Wow. Probably ruin that one. So the end of June, June 30th, 2021 forbearance is over. What's going to happen. So there's a lot of questions about, is it going to be the next foreclosure cycle or foreclosure market? I don't think so. However, there are probably a few, maybe more than a few folks out there that still can't make their basic mortgage payment. So once forbearances over, that would be June 30th, 20, 21 July. First, that next payment's going to be due.
Connor MacIvor Santa Clarita real estate radio (16:59):
I'm assuming, and I've read online some news pertaining to this, but I'm assuming the banks aren't going to come to people and say, we want you to pay us everything you haven't paid. And last year, I don't believe that banks are going to build some kind of an escrow account and then take all of those payments and put them into something separate and then mandate that each homeowner pay a little extra month into that account. So I don't think that's going to happen. I do think that at the end, once it's over the, bank's going to make the payments that you haven't made the people in forbearance, they're going to tack it onto the end of the loan. With that scenario. I believe the banks probably didn't have the foresight to, there was going to be some kind of a virus that crippled the United States economy and everyone else.
Connor MacIvor Santa Clarita real estate radio (17:55):
So usually in the small print at banks, a lot of stuff in there. I mean, there's a lot of stuff and their act of God, there's everything. I don't know if something like COVID that's scenarios in there. So what I mean by that is there's probably not a clause that States automatically extended because of some kind of a
virus or some kind of, uh, this type of an event, therefore modifications. I would think I'm thinking modifications have to be done. So basically, if something happens in the future and a person loses their ability to pay back their mortgage, then at that particular point, the bank has to move forward with a notice of default and foreclosure action. But if the mortgage isn't correct, if it hasn't been re-recorded with a new end date E in this case, if you started forbearance last June and it ends next June, that's a year.
Connor MacIvor Santa Clarita real estate radio (18:58):
So if the end of your mortgage was sometime in the future, which I'm sure it is a year from that date, it actually is not the year that you agreed to originally when you obtain the loan or do the refinance, I'm wondering who's going to pay that fee or the bank's going to pick it up. Is it going to be free? Is that going to affect anything in the market? I don't know. The other thing is the Coronavirus. We have that vaccine out there that now is accessible to most people. Is that going to change the dynamic of the market and are more listings going to enter the market as being for sale, changing the market from its current profile of being a seller's market into a home buyer's market. That's another question. Now I will tell you, there are a lot of people that were slotted to sell last year, but those people changed their minds because of COVID.
Connor MacIvor Santa Clarita real estate radio (19:53):
They thought they would sit tight. Now there's a lot of people that want to sell, either move up downsize, or get out of California and come into California. Those people are looking for a house to purchase, but they're not seeing the house that they want to buy, which in some cases, as a seller, you're putting the cart before the horse, because realistically in the first place, what I would do, I would put my house on the market for sale, have the agent build up everything, advertise it and start showing the property. But I would put in a clause with any buyer stating that I have the right to obtain, look for fine, write a contract on it, obtain my home of choice. That way, if I can't find a house, then there's no deal with whatever buyer had the accepted contract on that house that we were selling for the person that isn't really sure if they're going to be able to find a house.
Connor MacIvor Santa Clarita real estate radio (20:50):
So you definitely want to have that clause built in there and in a sellers market, that's easy to get buyers to agree to. If it happens to be a buyer's market, there's going to be a lot more difficult to because there'll be other sellers out there that are going to be in competition with that. Won't be so easy or excuse me, will be easier. And won't have that home of choice contingency put in on their side. I'm Connor MacGyver. I hope this guide has given you some insight into the real estate market here in Santa Clarita Valley. I'll tell you my Google business pages are a great way to contact me, but I'll leave you my phone number here in case you're one of those folks that happens to have pad and pencil next to them or the smartphone. They could open up something to write it down.
Connor MacIvor Santa Clarita real estate radio (21:33):
It's (661) 400-1720 on a local agent here with Remax. I'm Connor MacGyver known better as MacGyver and associates. And of course, my website is Santa Clarita, home experts.com. I do run the longest-running podcast here in Santa Clarita Valley in Los Angeles areas pertaining to real estate. And I hope you see the value. Please share if you know anybody that's wanting to buy or sell real estate, please, including yourselves, reach out to me directly. And I will treat you better than family. I hope everybody's
doing great. Thank you so much for taking the time. Listen, you'll be safe. Connor MacGyver over and out.