Welcome to the #1 local guide for buying and selling homes in Ventura County. This guide will not only walk you through the steps of buying and selling a home, but will also discuss options for rent-to-own and ways to avoid foreclosures. Anyone interested in residential real estate in Ventura County should benefit and find value from this guide. Although it is tailored to Ventura County, the same principles apply to our neighbors in Santa Barbara and Los Angeles Counties. After you read this guide, please visit the other resources available on this website.
How to Buy a House in Ventura County
Determine your Budget
Before you go driving around Ventura County looking at different houses, first determine your budget. This should be done in two separate, but equally important steps.
1. Find out how much you’re pre-approved for.
Visit your local bank or credit union and tell them that you will be looking to buy a primary residence soon and that you would like to get pre-approved. If you are able to, you should visit several different institutions as some of them have different criteria and standards for lending programs (not to mention different rates). According to bankrate.com, multiple credit inquiries that fall within a 14-day span are counted as a single inquiry, so try and do this within a two week period. Doing this will give you a good idea of how much you will be approved for so that you don’t waste your time looking at homes that are out of your price range.
2. Determine how much you can realistically afford
Just because you are pre-approved for a certain amount doesn’t necessarily mean that you can comfortably afford to make those payments. While a pre-approval takes into account your income and monthly expenses that show up on your credit report, it does not take into account your lifestyle or other spending habits. You should take a hard look at ALL of your expenses and make sure that you will comfortably be able to afford your mortgage payment month in and month out. Other factors to consider include down payment amount, property taxes, HOA fees, and Mello Roos, among others. Since the rules that apply to these are subject to change at any point in time, make sure you take these into account as they pertain to your particular situation.
Even before you determined your budget, you probably had an idea of what you were looking for in a home. Now that you know how much home you can afford, you can start defining these ideas as part of your criteria. Several of the major factors to consider are:
–city: Do you want to live in a smaller city such as Santa Paula or Fillmore, or do you prefer a larger city like Ventura or Moorpark?
–size: how large of a house do you want/need? Take into account physical size and number of bedrooms and bathrooms. Do you want a backyard or is taking care of a lawn your personal nightmare.
–year built: Do you want a newer home or older home? In Ventura County, you will typically see that the older homes have the larger lots.
Depending on your budget, you may not be able to afford all of the things you are looking for, so what trade-offs are you willing to make? Do you want newer construction but don’t like the size of the condos in Riverpark? Maybe you’re willing to purchase an older, larger home on the East side of Ventura. Do you want to live by the beach but don’t want to commute to your office in Simi Valley? Maybe a home in Thousand Oaks would be a better fit.
Find a real estate agent
Finding a good real estate agent to represent you may be one of the most crucial factors when buying your home. The real estate agent will help you search and view properties and will play a defining role in the negotiation process. When choosing an agent, make sure you find one that you are comfortable with, as they will be assisting you with one of the biggest purchases you will make. Chances are you will be spending a good amount of time viewing homes with the agent, so you want to choose someone that you get along with and will not pressure you to buy something that you are not comfortable with. Another factor you may want to inquire about is the agent’s schedule; you do not want to work with an agent that is too busy to return your emails or phone calls. If you work full time, you also want to work with an agent who will be able to show you homes when you are available in the evenings and weekends.
When you find a potential home that you feel suits your needs, it is time to submit an offer. You and your agent should look at recently sold homes in the neighborhood to get a feel of how much they were sold for. Some sellers in today’s market may have unrealistic expectations of how much their home is worth, so you want to make sure that you are not paying more than the recently sold comparables. However, depending on the condition of the housing market at the time of your purchase, homes may very well be selling over asking price. Your real estate agent will be able to give you a feel for the market and help you come up with a reasonable offer price. The seller will either accept, decline, or counter your offer, so be prepared for any and all of these outcomes.
If your offer is accepted, there are just a few more steps that must be completed. Check with your realtor and make sure that you have all of the required city inspections done on the home (physical inspection, sewer lateral, etc.). If you completed all of the necessary steps in the budgeting phase, you should be well aware of where you stand financially, but you must still complete the mortgage process with your bank or credit union. Your real estate agent should walk you through the steps of closing escrow and then your new home will finally be yours.
How to Sell a House in Ventura County
Maximize the appeal of your house
If you want to sell your home for the highest amount possible, the easiest way to do so is by making the appearance of your house as nice as possible. You cannot change the neighborhood of your house and adding square footage isn’t cheap, but doing a few things to improve how your home looks can go a long way. One of the first things that a buyer will notice is the curb appeal, or the initial visual appeal of your home as viewed from the street. In extreme cases, some buyers may not even view the inside of the property if the first appearance isn’t appealing. Depending on your budget, you want to make the front of your house look as nice as possible, including doors, windows, paint, and landscaping. Due to the California drought, most buyers do not expect a green lawn, and in some neighborhoods this may even be frowned upon. But that being said, you want to at least make sure bushes and other shrubbery are maintained. Although many say that the appearance of the back yard is not as crucial as the front, you do not want to ignore making the back yard as presentable as possible. You may even want to consider hiring a local gardener for a one time “makeover” before putting your home on the market.
Having curb appeal that impresses a potential buyer is only half the battle. Once you get the buyer through the front door, you want to make sure the interior of the house continues the impressions that began on the outside. The easiest and most essential thing that you want to do is to make sure that everything is clean and tidy. Kitchens, bathrooms, carpets, and walls should be as clean as possible. If you are still living in the house, you want to remove or hide as much clutter as possible. Having clutter everywhere can take away from the appeal of the home as well as make it seem smaller to the potential buyer. If it’s within your budget, you may want to consider a fresh coat of paint, especially if your home is painted in bright, extreme colors. For sellers still living in their homes, scented candles or baked cookies or brownies add a welcome touch. Lastly, good staging can be the added push that a buyer needs to make them sign on the dotted line. For sellers not currently living in the home, you may want to consider hiring a company to stage your home with furniture, if your budget allows.
Listing Your House
Depending on the reason for selling your home, you may or may not have a choice on what part of the year to list your home. Many experts will recommend putting your home on the market in either the spring or the fall, as potential buyers may be on vacation during the summer and winter months are too harsh. In California, winters are not as much of a concern as they are on the East Coast, but the market can still slow down because of the holidays. If you do not have an urgent reason to sell your home, it may be a good idea to list your home in spring or fall, even in Ventura County.
Whether you are working with a real estate agent or attempting a For Sale By Owner (FSBO), you will need to determine how much you are going to list the house for. For those working with an agent, they should be able to assist you with coming up with a price that will get your house sold for the best possible price, but it will still be good for you to understand the process. The first step is to look at comparables in your general neighborhood to get a good idea of what homes are selling for. There are different methods for doing this, but basically you want to compare your home to homes with similar features, such as number of bedrooms, bathrooms, square footage, garage, etc. You should look at homes within a half a mile that sold within the past 6 months, and also homes that are currently on the market for sale.
Looking at comparables will give you an idea of what you should list your home for in order to secure a quick sale. Depending on the status of the housing market in your area, different strategies include listing your home for slightly higher than the home that sold for the highest price, or listing it slightly lower in the hopes of encouraging a bidding war. Again, this is where the expertise of a local real estate agent will pay dividends in helping you determine the best price to list at.
After the events of the last decade, most homeowners in Ventura County are aware of how foreclosures became one of the biggest topics in real estate for several years. While it appears that the worst of those times are in the rear view mirror, there are still many homeowners in the county who may be in the foreclosure process or fear that they may be soon. For those homeowners, there are other options that you may want to consider as well.
Short sale: In simple terms, a short sale is when you sell your home for less than what is owed on your mortgage. While a short sale will still damage your credit, it is far less substantial than a foreclosure, and you may also be able to purchase another home sooner than if you have a foreclosure on your credit record. While the concept of a short sale is simple, the actual process of a short sale can be long and arduous. More information about the short sale process can be found here.
Deed in lieu of foreclosure: While not as well-known as foreclosure or short sale, another option is a deed in lieu of foreclosure. This is a process where the borrower forfeits all rights to their home and conveys them to the lender. Although the homeowner will not have a foreclosure on their record, the bank still ends up taking ownership of the property. Most experts seem to recommend that distressed homeowners consider a short sale before this option, although you should still be aware of its existence.
Bankruptcy: Filing bankruptcy is another option that may help avoid foreclosure. We are not lawyers and will not pretend to be, so we will not get into the details and intricacies of filing bankruptcy here. However, homeowners should be aware that this is an option that they can explore with a bankruptcy attorney and may help them stay in their homes. More information on how bankruptcy might help with foreclosure can be found here.
Making Home Affordable (MHA) Program: MHA is a program that was developed under the Obama administration to help distressed homeowners avoid foreclosure. Below is a short description of each of the programs offered under MHA.
- Home Affordable Modification Program (HAMP)
HAMP is a program that can help homeowners who are having a difficult time keeping up with their mortgage due to income reductions or unexpected increases in expenses.
- Veteran’s Affair Home Affordable Modification Program (VA-HAMP)
The Department of Veterans Affairs also offers programs that can help reduce monthly payments to less than 31 percent of their gross monthly income. For more information, visit the The Department of Veterans Affairs’ website.
- Federal Housing Administration Home Affordable Modification Program (FHA-HAMP)
Homeowners that have a loan that is insured or guaranteed by the FHA may also be eligible for a program that can help reduce monthly payments to less than 31 percent of their gross monthly income. For more information, visit the U.S. Department of Housing and Urban Development (HUD)’s website.
- FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
A FHA Short Refinance is designed to help homeowners who are upside down on their mortgage refinance into a more affordable mortgages. In this program, the lender must agree to reduce the first mortgage to no more than 97.75% of the current value of the home.
- Treasury/FHA Second Lien Program (FHA2LP)
If you have a second mortgage on your home and your first mortgage lien holder agrees to a FHA Short Refinance, you also may be eligible to have your second mortgage reduced or eliminated. If both lien holders agree to participate, the total amount of your mortgage debt after refinance cannot be greater than 115% of the current value of your home.
- Principal Reduction Alternative (PRA)
PRA is a program designed to help homeowners who owe more than their home is worth by encouraging lenders to reduce the principal on your home.
- Second Lien Modification Program (2MP)
If you have a second mortgage on your home and your first mortgage has already been modified under HAMP, you also may be eligible for a modification of your second mortgage under this program. Along with having your first mortgage modified under HAMP, you must not have missed three consecutive payments on your modified mortgage and you cannot have been convicted of a mortgage or real estate related felony in the last 10 years.
- Home Affordable Foreclosure Alternatives (HAFA) Program
The HAFA program can offer homeowners either a short sale or Deed-in-Lieu of foreclosure to help with moving to more affordable housing. A HAFA short sale will have less of a negative impact on credit score than a traditional short sale. HAFA may also be able to provide homeowners with $3,000 in relocation assistance.
- Home Affordable Unemployment Program (UP)
The Home Affordable Unemployment Program (UP) can help homeowners reduce their mortgage payments to 31 percent of their monthly income. In some cases, payments can be suspended altogether for 12 months or more.
- Home Affordable Refinance Program (HARP)
HARP is designed to help homeowners who would like to refinance their mortgage but have been unable to do so because the value of their home has declined. Through HARP, homeowners must submit a loan application and pay any applicable refinance fees. You cannot have refinanced using HARP previously unless it was on a Fannie Mae loan that was refinanced between March and May 2009.
In most major cities, residents can come across stores offering rent-to-own services such as this one. Most times, these stores offer furniture, electronics, or appliances. But rent-to-own is also a transaction that can be used for the sale or purchase of a home. There are several ways that this type of transaction can be structured, but the basic premise is the same. The idea is that the home is leased in exchange for monthly payments, with the option to purchase for an agreed upon price. The length of the agreement is normally anywhere from one to five years. The monthly payment usually consists of an amount that goes to cover the rent paid to the current owner of the home, and also an additional amount that will be used for the purchase of the home. Depending on the contract, the renter may or may not also be required to make a nonrefundable deposit to include as part of the down payment for the purchase of the home. At the end of the term, the renter can either proceed with the purchase of the property or decline the right to purchase. If the renter proceeds with the purchase, they usually secure financing from a bank or credit union and pay the seller in full. If the renter declines, they forfeit their right to any monies used for the deposit and the additional amount that was put towards the purchase of the home.
Rent-to-own can be a viable solution for both buyers and sellers. Below are a few of the pros and cons for both parties.
- Those with poor credit have time to build up their credit score
- Time to build up the remainder of the down payment
- Chance to determine if you like living in the house and neighborhood
- If housing market increases, you will have purchased the home at below-market value
- You may not have fixed your credit enough or secured a big enough down payment to proceed with the purchase at the end of the lease
- If you don’t purchase the home at end of lease, you can forfeit a substantial amount of money
- If the housing market declines, you may be purchasing the home at above-market value
- Renters usually take better care of a home since they plan on purchasing it
- Ability to have a renter for an extended period of time and not have to deal with month-to-month
- Locked in purchase price in the event of a market downturn
- If you care more about selling than renting, you may have to go through the process again should the renter choose not to go through with the purchase
- May be selling at below-market value should the market increase during lease period
As there is no standard rent-to-own agreement, it is crucial that both parties ensure that a well-written contract is in place. It is recommended that a real estate agent and/or attorney be involved to prevent any headaches and disputes that may come up. It is especially crucial that the renter makes sure that they know what is in the contract, as it can be easy for an unscrupulous person to take advantage of an unsuspecting renter.
We hope this guide has provided useful information that can be used in your next real estate transaction. If so, we invite you to share this page on your social media so that others can have the chance to read it as well. If you have any questions or would like more information, Dream Home Property Solutions, LLC would be happy to discuss any and all of your real estate needs. Call us today at 805-250-8335 or you can enter your contact information here. Also, be sure to follow the Dream Home Property Solutions Blog for more valuable content.