This guide was made by Redlands Homes for buyers/investors interested in purchasing REO and HUD Owned Properties. These properties aren’t for people that want turn-key properties as they usually require a certain amount of repairs and expertise.
Definition of a REO and HUD Owned Properties
- HUD stands for Housing and Urban Development. HUD is a cabinet holding department of the United States of America. They meet Americans’ needs for affordable quality housing and handle all FHA loans.
- REO stands for Real Estate Owned. Properties are considered an REO when the former occupant has foreclosed on the property and an attempt to sell the house at an auction has failed. Banks then take control of the property and sell them on the open market.
Advantages of an REO or HUD Owned Property
- For these types of sales the entire advantage goes to the buyers of these properties.
- You can buy REO or HUD Owned Properties at a discount to their market value.
- Investors can get really good deals on buying these types of properties.
- When a single bank has a large amount of either sale type in one location they might put all of these properties into a portfolio and sell all of them to an investor for an even bigger discount
- You can buy the home as your personal residence and even get an FHA 203k Rehabilitation Loan for some properties. This allows one small fixed rate loan for the purchase of the house and the rehabilitation.
Disadvantages of an REO or HUD Owned Property
- For these types of sales the house isn’t usually in the best condition. You can usually tell a house is an REO or HUD Owned Property if you see the grass in the front yard is dead or there are broken windows.
- Sometimes this property type will only qualify for cash on hand meaning banks won’t finance them.
The Main Points REO and HUD Owned Property
- REO and HUD Owned Properties can:
- Be a great opportunity for investors
- Be a great opportunity for people who are looking for a primary residence and don’t mind repairing the property for a discount on the sale price.
- Be in poor condition or bad locations
- Provide opportunities to do some creative financing like an FHA 203K Rehabilitation Loan.
This guide was made by Redlands Homes for home owners that have decided it is time to move from Redlands, CA and seek a new home and/or beginning in another city. Or maybe you want to stay in Redlands but get a larger or smaller house. This guide is for both.
Definition of a Standard Sale
- This type of home sale is your normal, standard sale.
- Usually the seller holds equity in the house and has no financial pressure to sell the property.
- Standard Sales used to be the most common type of sale until a plentiful amount of distressed properties flooded the housing market.
Advantages of a Standard Sale
- The seller can choose the price they want to sell their house for regardless of market value (This doesn’t mean someone will want to buy it for an above market price).
- Negotiation on price and closing costs like termite inspection or repairs becomes easier because sellers aren’t usually financially pressed.
- There is less documentation and forms to fill out when selling standard, making the process much smoother.
- The seller can wait for the right buyer whether that means a cash offer or a higher financed offer.
- Sales close fast. Usually 30 days or less.
- This type of sale is good for buyers who are okay with paying at or slightly above market value, want a home in good condition and want the seller to be more relaxed on who pays certain closing costs or home repairs.
Disadvantages to a Standard Sale
- Although negotiating is an advantage, it can also be a disadvantage. Standard sales put more reliance on the seller to pay some of the closing costs.
- Standard Sales might be less desirable than Short Sales depending on the location, inventory of standard sales vs. short sales, and market value of homes.
- Buyer might pay slightly more than market value or seller might accept an offer that is slightly less than market value. This really isn’t a disadvantage but more of a negotiating feature of Standard Sales.
The Main Points of Standard Sales
- A Standard Sale can:
- Benefit the buyer and seller in many ways
- Have more control over price and contingencies for their property
- Close sales faster than most other sale types
This guide was made by Redlands Homes for home owners with a high Loan to Value Ratio or commonly known as being “upside down.” Learn how to strategically rid yourself of this burden and save yourself from Foreclosure by Short Selling your real estate.
Definition of a Short Sale
- When you are selling your real estate as a Short Sale, the amount you owe on the mortgage of the house won’t be covered by how much you sell the property for.
- For example, if you have $125,000 left to pay on the mortgage and the market value of your house is only $100,000, it might be a good opportunity to Short Sale your house.
- If you don’t know the value of your house contact one of our professional real estate agents and they will gladly tell you the current market value by clicking [button link="#" color="black" size="standard" type="rounded"]here.[/button]
Advantages of a Short Sale
- A Short Sale is more likely to protect your credit, unlike Foreclosure, which will tarnish your credit score for many years in the future.
- If you Short Sale your home instead of Foreclose you can retain your dignity in the community.
- You can stop making mortgage payments if you want
- With Foreclosure it can take 5-7 years to recover and purchase a new house. With a Short Sale you can buy a new house in as little as 2 years.
- If you pay your mortgage while you sell your home and aren’t late for more than 60 days you might be eligible to purchase another house immediately.
Disadvantages to a Short Sale
- The bank has to approve your Short Sale which can be a tedious and long process.
- The bank will want to review your personal records including: bank accounts, assets, liabilities, and tax returns.
- You will also need to provide the bank with a letter of hardship, stating why you can’t make your mortgage payments or other factors that are affecting you from paying your loan.
- Your home needs to be “Show Room” worthy for the potential buyers of your house.
- Even when submitting multiple offers to the bank it could take weeks or months before they inform you whether they accepted an offer or declined all of them.
The Main Points of Short Sales
- A Short Sale can:
- Prevent Foreclosure
- Keep you living in your house for a few more months
- Protect or damage your credit
- Potentially stop you from buying a house for 2 years
Redlands Homes “First Time Buyer” Guide
This guide was made by Redlands Homes to help people, with little to no experience, purchase real estate in Redlands, CA. We will begin our journey from step 1 and continue until you feel completely confident about buying your first home in Redlands.
Step 1 – Preparing Yourself
- Make sure buying is the right choice for you. This is probably the most important and largest financial decision you will make in your life. The more informed you are, the more control you have when buying a house. Don’t be afraid to ask questions!
- If you are currently renting a house in Redlands or outside of the area you need to calculate the pros and cons of buying vs. renting. One pro of buying is that every mortgage payment goes towards owning the house. Redlands Homes has a mortgage calculator that you can access by clicking this link [button link="#" color="black" size="standard" type="rounded"]Redlands Homes Mortgage Calculator[/button]
- Here is a list of terms you should become familiar with before moving on to Step 2. Pride of Ownership, Appreciation, Property Tax Deductions, and Equity Loans.
- The first thing you need to do is find a professional Real Estate Agent in Redlands, CA.
- Here are some basic tips and information to utilize when choosing the right agent:
- Find a Redlands Homes Agent and read their reviews/background info. If they can’t assist you then they will refer you to someone who can.
- Ask for referrals from people you know in Redlands, CA
- Decide if you want a younger agent (more ambitious) or an older agent (more experienced)
- Choose an agent that isn’t too busy to dedicate time to you
- Remember that the SELLER pays the real estate agent’s commission and the BUYER doesn’t.
- You can view a list of experienced Redlands Homes Agents by clicking this link [button link="#" color="black" size="standard" type="rounded"]Redlands Homes Agents[/button] and you can also see a more in-depth guide about choosing the right agent in our information section.
- Next, you will need to get preapproved for a loan. Getting yourself preapproved convinces your agent that you are serious and motivated to purchase a house. Once again, use the same basic tips you would use to find an agent to find your lender.
- Redlands Homes has compiled a list of trusted and experienced lenders specifically located in Redlands, CA that you can view by clicking this link [button link="#" color="black" size="standard" type="rounded"]Redlands Homes Professionals[/button]
- Here are some links to research before moving on to Step 3 (the fun one)! Loan Preapproval, Recommended Redlands Agents, Recommended Redlands Lenders, Guide to Choosing the Right Agent.
Step 3 – Finding Your Dream House
- So, by now you’ve found a good Real Estate Agent in Redlands and you know the maximum amount you’ve been preapproved for to receive a loan. The next step (the fun one) is to actually go out and find the home of your dreams.
- Tell your agent EXACTLY what you are looking for in a house. Agents have expert tools that can handle very detailed criteria to find exactly what you want. Whether you want a 2 bedroom, 1 bathroom, turnkey house or an exquisite, Victorian Mansion your agent can find it for you.
- After finding some potential Redlands Homes you can now go to the houses accompanied by a real estate agent. Tell the agent what you like and don’t like about each house and make sure to remember them.
- If you don’t fall in love with any of the houses your agent has shown you, then you need to make sure that they know this.
- If you did fall in love with a house, then it’s time to move on to the final part, Step 4.
Step 4 – Purchasing the Dream House
- You’ve made it this far and now you are ready to make your first offer on a house in Redlands, CA. This part can be complicated and that is why it was so crucial that you found a qualified Redlands Homes Real Estate Agent to help you through this.
- Have your agent show you the market value of the house you’re about to purchase so that you can make an educated offer and save yourself thousands of dollars. Your agent can also negotiate with the seller to try and get the price you want.
- Because not every offer is the same, talk to your agent about who pays for closing costs, inspections, escrow fees, and home warranties.
- After you’ve signed the documents you wait to see if the seller accepts.
- If they don’t accept your offer then you either have to counteroffer or move on to another house.
- If your offer is accepted, Redlands Homes would like to say, “Congratulations on purchasing your first house!!!”
- Redlands Homes wants to thank you for reading Redlands Homes First Time Buyer’s Guide. To view more Real Estate guides click here! [button link="#" color="black" size="standard" type="rounded"]Redlands Homes Articles[/button]
Redlands Homes Vocabulary List
This list of vocabulary words provided by Redlands Homes will give you the knowledge to effectively communicate with real estate agents, lenders, friends, family, etc. about real estate in general.
- Appreciation – The rate at which a home increases in value over a period of time. It usually rises at the same rate as annual inflation plus 1 or 2%.
- Closing Costs – Closing Costs are costs charged to the buyer and seller through escrow which may include: escrow fees, title insurance, taxes, recording fees, etc.
- Dream Home – A home that is in every way the perfect house for you.
- Equity Loans – The longer you’re making payments on a house the more your equity increases. You can take out a loan using the equity you’ve built up in your house.
- Inspections – An inspection can range from a termite inspection to a hazardous waste inspection. Ask your agent what inspections are appropriate for houses in the area.
- Loan Preapproval – Getting preapproved for a loan makes it easier for real estate agents to take you seriously. Being preapproved also means you already know the amount that banks are willing to lend you.
- Market Value – The market value of a home measures how much people are willing to pay for a house in the current market.
- Pride of Ownership – Owning a house is a huge responsibility. If you take pride in your house and maintain your property you are making an investment for the future.
- Property Tax Deductions – Taxes paid on your first home are fully deductible for income tax purposes.
- Purchase Agreement – A purchase agreement is a contract between a buyer and a seller to purchase a home.
The City of Redlands
Redlands is located in San Bernardino County, California. The city boasts a population of 68,747, which is an increase since 2000. You can easily commute to San Bernardino or Riverside. Both are less than 15 miles away.
Redlands’ logo represents their prevalent orange trees and railroads. Here is an example picture.
Redlands has been a destination for Presidents including William McKinley, Theodore Roosevelt and William Howard Taft.
Redlands Historic Landmarks: Beverly Ranch, Smiley Public Library, Kimberly Crest, Mill Creek Zanja, the Redlands Central Railway Company, Redlands Santa Fe Depot District, Smiley Park Historic District, and the US Post Office.
Redlands Municipal Airport is a private airport where licensed pilots can fly small – medium sized planes, usually capable of carrying no more than eight passengers.
For almost a century, Redlands was a prolific producer of oranges for the entire world. You can still find their oranges as far as Africa but enjoying them fresh in Redlands is the best way to appreciate them.
Redlands Orange Company Label
Redlands Bowl is an entertainment venue for music, festivals, plays and most notoriously Redlands High School Graduation.
Redlands has two main nicknames. They are the Jewel of the Inland Empire and the Bible Belt of Southern California
Schools in Redlands
University of Redlands