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You’ve heard that real estate is about location, location, location. Specially in Sacramento, California. With plenty of major metro areas, attractions, and that whole…Hollywood thing, California’s real estate market is something to watch and avidly follow (with popcorn).

And normally, the differences between NorCal and SoCal’s real estate markets are immediately apparent, like the differences between skinny hipster jeans and surf shorts. I was gearing up to spend an entire week researching each metro area, noting the subtle differences and reporting my findings. But imagine my surprise when my extensive data pointed me to an unexpected conclusion: every major California market is trending in the exact same direction!

That’s pretty much exactly what I am seeing…more buyers than sellers and plenty of cash floating around in the market. I’m hoping we get sellers popping out of the woodwork in the spring. Otherwise, it’s going to be a frenzy as too many buyers fight over an already picked over inventory.

~Dave Roberts of Sonoma.net

Our January Market Summary made a great case for why it’s a good time to buy, and that holds true if you live in California. But let me qualify that with a reason: interest rates and prices are the lowest they’ve been in ten years. That doesn’t mean that your choice of home inventory is going to magically improve, and I’m not saying there should be a frantic rush to buy. But, if you are thinking about buying a home, it’s no longer a “Home-Buying Armageddon” where you are rolling the dice on your future equity. Take your time, find a home you that suits you, and enjoy the home search. That’s the key element that most recent market reports are missing; it’s going to be Buying Season for the foreseeable future!
Our housing data shows that California price levels are essentially flat from the end of January 2011 to the end of January 2012—across all 15 major metro areas that we analyzed. However, inventory levels are anywhere from 20% to 70% lower during the same time period. We usually expect reduced supply to lead to higher prices – why hasn’t that happened? We consulted experienced California real estate agents, reviewed what’s going on with interest rates, foreclosures and government programs, and asked Siri (actually where to get a pizza at 11 pm) and came up with a few possible explanations for such peculiar market conditions occurring in California:

1. People are refinancing instead of selling.

Assuming your property value is above your loan balance, refinancing at 2011 interest rates saved California homeowners a small fortune. Let’s say you have a $200,000 mortgage rate at a 7% interest rate. That means your mortgage payment is about $1330/month. If you refinance to the current low rate of 3.96%, your mortgage rate falls to about $950/month. That’s almost $6000/year in savings—you can finally afford those granite counter tops you’ve always wanted.

• More support from big wigs.

It looks like President Obama is also trying to perpetuate the refinancing extravaganza.  In his recent State of the Union address, the President proposed letting underwater mortgage holders (meaning they owe more than their home is worth) who are current on their payments refinance their mortgages with government approval. It’s not a given that Congress will go along with this plan, but if it passes, it would keep even more owners in their homes.

2. Urgency to sell now reduced.

Dataquick is reporting that foreclosures are down 11.9% across the state of California, relative to the same time period a year prior.Excellent news, not just for the economy, but for my own delicate sensibilities whenever I read about foreclosure hardships in the news. Even Paul Krugman of the New York Times sees the economy improving. The magical flow chart of economic success is revving up, and that eventually means:

3. Sellers are waiting for the market to favor them.

It may be hard for sellers to hear, but it’s likely that the seller’s market won’t be thriving this year, as prices should continue to remain relatively flat (i.e. prices haven’t changed much and are not expected to). Also, the current homes on the market all across California are slightly bigger than last year at a price point of about 4% less than last year. This reduces the price per square footage 5-8% across the state, compared to the same time period last year. Not quite the upswing that sellers have been waiting for.

• Move-up buyers are out of the market.

Move up buyers make up the core of a healthy, strong housing market. They’re the ones buying bigger, better digs, which free up the smaller starter homes for first-time buyers. The recession has kept them stationary, and for that reason a good chunk of the best part of the market isn’t looking to buy.

4. Buyers don’t like the merchandise.

In a market with a smaller inventory, you would expect prices to rise (the laws of supply and demand usually dictate that as supply shrinks, price rises). That means that the real problem may lie on the demand side. Prospective homebuyers are either shunning what’s currently on the market (foreclosures, short sales, or maybe just some really ugly houses), or the overall economic forecast scares potential buyers out of the market. My bet is that it’s a bit of both.

• As further proof of potentially “bad” inventory, current sellers have dire motives.

It almost feels like those brave sellers out there are doing it because they absolutely have to. What’s the logic behind that conclusion? Well, generally, you can get a sense of how sellers behave in a market by asking them over and over and looking at the results over time. That’s what the guys at Housingwire.com did, and you can see that only ~8% of people think that it’s a good time to sell. So, likely many sellers are obliged to sell for some reason or another (*cough*too many babies*cough*) and as a result, buyers aren’t loving what they see on the market.

5. Tight credit limits the number of potential buyers.

If you’re living in, say, Detroit, cash deals may not seem out of the ordinary. For Californians—especially in places like San Francisco, Los Angeles, and San Diego—cash deals don’t seem possible unless you’re Scrooge McDuck with a swimming pool filled with money…or Mark Zuckerburg making his face public. In a normal market, 18-20% of all home transactions are paid in cash; right now, a whopping 38% of home transactions are cash deals. Cash buyers (typically investors) are more of a “sure thing” than buyers who finance, which means that they are swooping up inventory while pre-qualified buyers pause to deal with various financing woes. The result is that there is less inventory available, while prices stay static.

For sure that is our biggest challenge, we have so many buyers (many foreign) with cash but there are so few “good” homes.  For the first time ever I have more buyers than sellers it has always been about 80% sellers but it looks like we may be at 60-70% buyers this year.

~Christophe Choo at Christophe Choo Real Estate Group

 

Hopefully, this gives you a better understanding of California’s buying forecast (partly cloudy?) and the possible explanation behind such a dearth of inventory on the market. If you’re selling, I wish you the best of luck, truly. Happy House Hunting!

A solid game plan can help you narrow your homebuying search to find the best home for you.

Read more: http://buyandsell.houselogic.com/articles/8-tips-finding-your-new-home/#ixzz1kLD1CTQk

Homeowners who are facing home foreclosures are likely devastated to realize that what they thought was a great investment has turned sour; there are even some who are simply walking away from the houses – and mortgage payments – that they fought so hard to get just a few short years ago.  Faced with an uncertain economy, unemployment, skyrocketing costs of living, and an iffy-at-best real estate market, lots of other folks who would otherwise be unlikely to shy away from purchasing a home are afraid to buy real estate.

Whether you are a homeowner faced with a possible foreclosure, an investor considering the possibility of buying property while the buyer’s market is upon us, or a “regular Joe” who needs a place to live, it is possible to evaluate your circumstances and goals, take a look at the real estate market trends, and make the best decision for your personal needs.

If you are a homeowner and can afford your monthly mortgage payments, this would probably be a good time to hold onto your house.  If your situation has changed little, you still have the same (or better) income that you had when you purchased your home, this is not the time to sell unless you absolutely must for some personal reason.

If you are a real estate investor, home foreclosures can offer a giant opportunity for you to buy low and sell high.  The basic premise – very basic, I will admit – behind any investment is to start with as low an investment as possible and sell for a profit.  Home foreclosures offer just such an opportunity.  With the numbers of home foreclosures that are occurring, you may consider purchasing real estate as a long-term investment.

Do not, however, expect to be like the folks on television who buy, make a bunch of cosmetic repairs, and sell for amazing net profit all in a thirty-minute program.  If you are going to invest in real estate – through home foreclosures or otherwise – you must be prepared to hold onto the property until selling conditions are more favorable.

If you are a regular old American adult who is tired of paying the landlord every month, you too may be able to benefit from the buyer’s market and/or home foreclosures in your area.  If your income is reasonably steady, reasonably safe, and reasonably high enough, there is no need to avoid real estate like the plague.

In fact, with conditions being what they are, as long as you are likely to be able to afford your mortgage payments, this would be a very logical time to kiss the landlord goodbye.   If you do decide to look into home foreclosures as a potential source of housing, be sure to consult an experienced and qualified professional to assist you, as there are some nuances to consider when purchasing foreclosed-upon property.

Creative Financing Secrets CLICK HERE!

Sacramento Pre-foreclosures are known as properties that have reached the final stages before they get repossessed or taken back by the lender or bank.  The owner is still in complete control of the property or home, although the bank or lender will repossess the home if the owner doesn’t attempt to rectify the situation.  Normally, if the owner makes things right with payment, the pre- foreclosure will settle and things will go back to normal.

When buying real estate, there are several benefits to Sacramento pre-foreclosures.  Although there are several ways that you can buy a home, pre foreclosure is one of the best.  Even though it is one of the best ways to buy property, many people miss out simply because they aren’t familiar with pre foreclosures and all of the benefits that come with them.

The best thing about Sacramento pre-foreclosures is the prices that are associated with them.  In most cases, the owner has no choice but the sell the house, and therefore will listen to just about any offer that he receives.  Due to this very reason, you can find Sacramento pre-foreclosures for sale at nearly 50% off market value.  This is an ideal time to purchase, especially if you are looking to save a lot of money.

Along with the great prices you can get with pre-foreclosures, you’ll also have the luxury of dealing directly with the owner – no third parties involved.  This is a great advantage, with buyers being in total control of pre-foreclosure sales.  In the event that the home owner decides to turn down your offer and cannot find another buyer, he will lose everything.  Even if you offer the owner a small price, he will be able to make a little bit of money selling the home.

You can find pre-foreclosures that up for sale pretty much the same way that you can find homes in which the bank already has control of.  You can look in the local newspaper, on the Internet, or by calling the lender directly.  There are several options that you have in terms of finding pre-foreclosures, giving you plenty of options. Once you have found a pre- foreclosure for sale, it’s up to you to seal the deal and get the home of your dreams at a very affordable price.

When you compare foreclosed properties with pre-foreclosed properties, you’ll find that there is less competition involved with pre-foreclosures.  Pre-foreclosed homes are a great purchase, as they will normally come at a very affordable price.  Those of you who have been looking for a new home shouldn’t hesitate to check out pre-foreclosed properties.  They are a great investment – and can indeed be very profitable in the long run.

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Real-estate market is competitive.  With the recent downfall in the economy, an increase in the number of houses and properties up for sale was witnessed by the country.  But the economy is starting to recover. According to the 2009 Mortgage Choice First Home buyers survey, the number of people who are in the position to purchase new homes has increased in 19%.

If you have decided to put your house on sale in Sacramento, then it could be a sad and painful experience seeing it remain unsold for a while.  Real estate agents and experts in Sacramento recommend a few things that will surely help in making your house and property noticed.

• Hiring a good agent.  

A good real-estate agent, would help in selling your house fast. Of course, it would mean that you would be giving commission to the agent when the sale is concluded. But real-estate agents would have enough contacts and tools that could be used creatively to clinch to deal.  When choosing an agent, make sure to check their references, background, and experience.  An agent should have knowledge about your neighborhood and its market history.

• Name a good price.

Price is always important, it could either make or break the sale of your home.  Your real estate agent should have an idea on what would be the appropriate price for your house and the price range in the location. A house which is too expensive may push away prospective clients while a very low price may raise some questions on the credibility of the property.  You could ask your agent to do a comparable market analyses (CMA) to get an idea on how much were the houses in your area sold for.

• De-clutter

People would want to visit and live in a nice home, not a messy one. Remove clutter and tidy up.  Put away things that are not frequently used.  If potential buyers are coming over to check the house, it is to put away photos from walls and shelves.  Potential buyers are not interested in looking at your holiday pictures, they are more interested in picturing themselves in your lovely home.  Make your house look more spacious by getting rid of unnecessary furniture, clearing out cabinets, and removing items on top of tables and shelves.

• Home staging

Home staging is another aspect on real-estate marketing.  A home seller could get a home stager, the real-estate agent may offer similar services or the sellers could learn how to stage their space for buyers.  Home staging is about redesigning or arranging furniture around the home to make it more neutral, homey and comfortable for the clients. Home staging would be able to help the clients picture themselves in the house and eventually purchase it.

• Fix things

You could fix minor problems in the house like broken faucets or window treatments.  Take note of these problems when you check your house.  It would indeed take time and effort, but would be worth it.  Simple home improvement repairs could just be small things but buyers would be able to notice them.

• Leave the house

When prospective clients will visit your house, it is better not to be there.  Of course, you would like to make people see how great the house is, but it would be uncomfortable for both buyer and seller. Buyers would not be able to talk to the agents about their real opinion of the real estate and property.  Aside from that, buyers would be able to ask questions freely, if the owner is not present.

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But, whether you want to buy with agents or by yourself, you need some guides in selling home. There are steps in selling your home. Those guides really help you. Never under estimate them because they have lots of impact in your selling home performance.

These are some quick guidance to sell your home:

1.    Preparation; show the very best condition of your home

Here is the first step to sell your home. Make a best first impression to your buyers so that they are attracted to buy your home. Get rid of dirt and rubbish, remove all clutter, repairs all flaws of your home, get rid of unused furniture to make it looks spacious

2.    Pricing your home effectively

A home that is priced right and reasonable will sell in a short time. You can use a third party service to give suggestion about your home’s value and the furniture in it. Don’t price too low that it will cost you more money, yet never also set high price that the you will loose your potential buyers

3.    When To Sell

You also have to know the right time to sell your home. You surely want to sell your home in a good economic condition and strong demand for houses, which tend to be stronger in June and July. If you sell your home at the right time and a good preparation, you will get the highest price of your home than your prediction

4.    A Bit About The Costs Involved

You should also involved any costs that you have spent in selling your home, whether it is attorney costs, closing costs, advertisements costs, etc

5.    Selling Privately

Selling home by yourself is not as easy as it seems but it is worthy to do because you can save about 2-6% of your selling price. Selling home privately is sure going to take much time and efforts for you to sell it.

6.    Selling At Auction

Selling at an auction can also be an option. But it is not a suggested option because it will cost you more money and also it is a volatile way in selling your home

7.    Get a real estate lawyer

You can make the flow of documents so easy and having a professional advice by getting a real estate lawyer in your selling process

8.    Marketing your home

There are many ways to market your home:

·    Writing your sell ad

·    Home Photos:  a picture can describe a thousand word

·    Lawn signs

·    Open houses

·    Home Brochures/Information sheets

·    The MLS (Multiple Listing Service) provided by the agents

·    You are your home’s best salesman

9.     Negotiating an offer on your home

10.     Home inspections

11.     Closing

These guides will help you to sell your home. Never hesitate to ask for professional advices if you meet some problems while you are in the middle of selling process.

Creative Financing Secrets CLICK HERE!

By: Scott Short

Words to the Wise…

 Another question you need to add to your buyer’s interview; “Have you modified your current home loan?” If your client’s answer is Yes, most lenders will consider this action the same as a foreclosure.

Depending on the loan type, (refer back to my prior articles on waiting periods) your client will have to wait. (You “may” have some latitude if the client’s lender solicited them for a loan modification and not the other way around.) – and you thought “Buy- n- Bail” issues was all you had to be concerned about.

Did you hear that Fannie Mae announced; Cash investors can refinance their homes prior to the usual 6 month cool off? Fannie does have strict guidelines for this and not all lender offer this loan product.

Delayed Financing Exception (direct from Fannie Mae’s Announcement SEL-2011-05)

Currently, Fannie Mae requires a minimum of six months to elapse between the time a borrower purchases a home and subsequently applies for a cash-out refinance. The Selling Guide (aka: lender guidelines from FNMA) has been updated to allow a cash-out refinance within six months of a purchase transaction when no financing was obtained for the purchase transaction under the following parameters:

• The new loan amount is not more than the actual documented amount of the borrower’s initial investment in purchasing the property, plus the financing of closing costs, prepaid fees, and points (subject to the maximum LTV, CLTV, and HCLTV ratios for the transaction).
• The purchase transaction was an arms-length transaction.
• The purchase transaction is documented by the HUD-1, which confirms that no mortgage financing was used to obtain the subject property. The preliminary title search or report must also confirm no liens on the subject property.
• The source of funds for the purchase transaction can be documented (bank statements, personal loan documents, HELOC on another property). Any loans used as the source for the purchase transaction will be required to be repaid on the new HUD-1.
• All other cash-out refinance eligibility requirements are met and cash-out pricing is applied.

In addition, the multiple financed property policy is being updated to allow cash-out refinances that meet the delayed financing exception.

Fannie Mae has also announced an upgrade to their underwriting software:

DU 8.3 (weekend of August 20^th) some of the updates are :

DTI (Debt to Income Ratios) from 45.01 – 50%

Fannie Mae requires strong compensating factors for your client to exceed a DTI of 45%.When DU 8.3 becomes live; your clients compensating factors will be looked at closer and scrutinized more to comply with the new guidelines. (ie: Great fico scores (720+), 6months or greater cash reserves in the bank, etc.)

Warning: as of October 1^st: High Cost area loan limits will be reduced

Most lenders are already capping the loan limits for loans above $417,000. Currently (at the writing of this article) Sacramento, Eldorado Hills, Placer and Yolo County, High Cost loan limit is: $580,000. Loan amounts above $580,000 are considered a Jumbo loan.

“Promissory Notes” dated on or after October 1, 2011 will be capped for the new High Cost Area loan limits for Sacramento, Eldorado Hills, Placer and Yolo County at $474,950 ($105,050 drop). Check with your loan professional for other counties loan limits.

At the writing of this article, there has been some debate to extend the current High Cost Loan limits.

Have you seen this great online tool:

Real Estate Owned Properties Portal    

The REO Portal is a consolidated neighborhood listing and mapping tool to assist neighborhood                 stabilization in identifying Real Estate Owned (REO) properties from Fannie Mae, Freddie Mac            and FHA in targeted geographies.

http://www.huduser.org/REO/reo.html

Did you Know?: (From the servicers point of view)

Short Sales:

In a July 2011 article” Shady Short Sales On the Rise”  in the Servicing Management magazine said:

The rate of suspicious transactions is on the rise. In the first half of 2010, approximately one in every 52 short sales appears to have been suspicious, wherein the lender may have incurred unnecessary loss.

The study also validated an industry perception about Limited Liability Company (LLC) buyers, Tim Grace, senior VP of product management and analytics at CoreLogic says:  While they comprise only 2% of all buyers they comprise more than 25% of buyers in suspicious short sale transactions.

Fraud Takes Aim At Servicing and Loss Mit by Ann Fulmer (August 2011, Servicing Management magazine):

Realtor-directed schemes:

The most frequent issue is the agent’s undisclosed relationship with the buyer, whether it be an individual who promises additional listings for “playing ball” or offers kickbacks, or whether it be a corporation in which the real estate agent (or his or her broker, or a spouse or friend) has an ownership interest. Real estate agents may also be active participant in “flopping” schemes.

Flopping:

This occurs when the short sale price is fraudulently decreased in order to increase the profit margin on the subsequent resale. Because the valuation on short sales is usually determined by a broker price opinion (BPO), unethical real estate agents may manipulate the price by using inappropriate comparable, fabricating comparable sales, or misrepresenting the character and condition of the property. Agents have also manipulated prices by listing the property in the wrong city or neighborhood, marking the listing as being under contract when it is not in order to deter legitimate offers, or withholding higher offers from the lender or servicer.

False Liens:

These are used in post-short-sale transactions as a means to direct proceeds from the end buyer’s purchase into the perpetrator’s pocket. They may be filed by a company with an undisclosed relationship to the buyer or by a foreclosure rescue /loan modification company. Red Flags should be flying if liens on a property are filed after a NOD (notice of default) or just before the short sale closes, especially if the lien holder readily agrees to accept a lower payment.

The article addresses more schemes, too much for this article, now you can understand why lenders are scrutinizing short sale deals more.

Servicers are instructed to identify red flags and variances. This type of review requires verifying that that the preliminary HUD 1 was prepared by the lender/ servicer and not one of the participants, as well as verifying the property was exposed to the market appropriately (ie: verifying the property was listed on a MLS and verifying that the listing was accurate in terms of describing the property and its location). The person or team conducting the review should look for any efforts to discourage potential buyers, such as the phrase “listing is exclusive to office” or   a pending sale date that is proximate in time to the original listing date. Reviewers should also verify that the agent’s MLS number is valid and that it belongs to that agent.

Furthermore, a pre-closing file review should compare the BPO value against an automated valuation model or other independent valuation source, confirm that the homeowner is aware of all the terms and conditions of the sale, and verify the short sale price with the settlement agent. (Approval letters have been changed by perpetrator to reflect a lower price.)

Now I can see why most/ almost all Short Sales take so long, or at least it sounds good.

If you have any questions or comments, you can email me: Scott Short, Comstock Mortgage at sshort@comstockmortgage.com or call 916 977-1233. www.ExperiencedEnergyFinancing.com

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