Monday, March 30, 2009

Making sense of the market today

Making sense of the Market

On the market today:

Today, Placer county has 1236 "active" (non-short sale) listings.

  • 17% are Bank Owned (REO) properties
  • 61% came on the market within the past 90 days

In addition, there are 830 Short Sale properties on the market

  • 581 were listed in the past 90 days
  • 104 or 13% were under $200,000
  • 40% of the entire inventory are Short Sale properties

What's sold in the past 90 days?

  • 739 Sales were completed in the past 90 days
  • 360 were Bank Owned (REO) properties
  • 86% of these sold within 90 days of being listed


379 were not Bank Owned (Active and Short Sales)

  • 58% of these sold within 90 days of being listed

In addition there are 526 properties in Pending state (in escrow)

  • 301 or 57% are not Bank Owned

Bottom Line

  • Distressed sales are still a big part of the market here, however there seems to be a shift towards more short sales.
  • Buyers looking for 'bargain' prices should look beyond Bank Owned properties as regular active sales are often priced comparable to REO properties
  • Short Sales should not be ignored in this market - have your Realtor do due diligence to find out the status of the seller's short sale


March Inventory Snapshot (Placer County):


Single Family under $500k average list price: $316,267 (Median $300,000)
Single Family Over $500k average list price: $1,018,544 (Median $770,000)
Condo/Townhome Under $300k average list price: $186,561 (Median $199,000)

(MLS - Metrolist Statistics)


Jeff - Http://www.EnglePropertiesOnline.com

Wednesday, March 25, 2009

Mortgage Problems?

Hello Neighbors,

This article just in from CAR (the California Association of Realtors).

If you've found yourself drowning in mortgage obligations and debt recently, you're not alone. Declining home values, overall economic malaises, job losses, and other forces are driving homeowners like you to consider options that just a few years ago were unthinkable.

While a new state law known as SB 1137 took effect in September 2008, effectively blocking lenders from initiating foreclosure proceedings until 30 days after contracting the borrower or making "due diligence" efforts to do so, many California homeowners are still in need of financial relief.

In response, the US Department of Housing and Urban Development has established a free hotline (877-HUD-1515), staffed with HUD-approved counselors to assist homeowners who are facing a reset on an adjustable mortgage, are three to six months from defaulting on their mortgage, or are experiencing health and/or employment issues.

The Options:

Some homeowners are finding relief in an option known as a loan "recasting" which involves a modification to the mortgage and typically results in reduced mortgage payments, with payments recalculated with the same interest rate and a new maturity date.
  • Pro: The upside to recasting is that you'll be working with your existing lender, which means no closing costs.
  • Con: The challenge is that not all lenders are willing to negotiate such deals


Another option is a short sale, or the negotiation of a payoff amount lower than what was originally agreed upon with your lender.
  • Pro: This option allows the homeowner to sell the property without suffering the stigma of foreclosure. In addition, H.R. 1424, the Emergency Economic Stabilization Act of 2008, extended the federal income tax exemption for mortgage debt forgiveness on home loans under the Mortgage Forgiveness Debt Relief Act of 2007 until Dec. 31, 2012.
  • Con: California does not grant this exemption any longer. Short sales of primary residence - sold after Jan 1, 2009 - can trigger taxes (depending on your income) associated with debt forgiveness, which is considered taxable income


Foreclosure is the final option and occurs when a homeowner loses the rights to his or her property, thus allowing the bank to sell the property to satisfy the debt.
Cons: This route will negatively impact your credit rating- and ability to buy or even rent another home - and wipe out any equity that you had in the home. Finally, it can also result in a tax obligation on the debt forgiveness. To learn more able the tax consequences of a short sale versus a foreclosure, visit the IRS' Web site (www.irs.gov). Before executing any of these options, consult with a certified public accountant or tax attorney.

By Bridget McCrea
Distressed Options
Home Edition/News From your Realtor
California Real Estate Magazine:March 2009

Resources:

Mortgage Workout Programs for Homeowners. To learn which lenders are recasting or offering workout arrangements visit: www.car.org/economics/

Avoiding Foreclosure in California: www.hud.gov/local/ca/homeownership/foreclosure.cfm

Consumer Home Mortgage Information: www.yourhome.ca.gov/mortgage-help.shtml

CALL US if you need to talk. We’re here to present options.

Jeff - Engle Properties / Neighborly Realty

Tuesday, March 24, 2009

IRS Clarifies Home Purchase Tax Credits

First-Time Homebuyers Have Several Options to Maximize New Tax Credit

WASHINGTON - As part of the Treasury Department's consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases. For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they've already filed their tax return.

The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.

"The new credit can get money in the pockets of first-time homebuyers quickly," said IRS Commissioner Doug Shulman. "For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they've already filed their tax return."

First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

The filing options to consider are:

· File an extension - Taxpayers who haven't yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.

· File now, amend later - Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later. Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.

· Amend the 2008 tax return - Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.

· Claim the credit in 2009 rather than 2008 - For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.


The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

IRS.gov provides more information, including guidance for people who bought their first homes in 2008. To learn more about the overall implementation of the Recovery Act, visit www.Recovery.gov.

USDA Loan Program includes Lincoln California

With much thanks to one of our newest agents - Marjorie Suzanne', we've just added another "Special Loan Program" link.

The URL for this link is:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
You might be surprised. Parts of Placer County, Sacramento County, Yolo & Yuba Counties, and of course Nevada & El Dorado Counties can all qualify.

Give it a shot, and let us know what you think!

Many thanks,

Jeff

Good Solar Energy Links

Solar Energy

From the "Go Solar California - A Consumer's Guide to the California Solar Initiative Statewide Incentives for Solar Energy Systems" booklet that can be found at http://www.energy.ca.gov/2008publications/CPUC-1000-2008-026/CPUC-1000-2008-026.PDF

Why should I go solar?

For many reasons:

• Solar finance experts suggest that every 1,000 Watts of power from PV panels adds $20,000 to the resale value of your home.

• Solar systems are extremely reliable, able to produce clean energy from the sun for up to 25 years.

• By using solar to power your home or business, you dramatically reduce your carbon footprint.

• Incentives are now at their highest in California, and will decline as more systems are installed

What steps do I take to install solar?

Have an Energy Efficient Self Audit done

CCSE (For SDG&E Customers) www.gosolar.energycenter.org

PG&E www.pge.com/csi

SCE www.sce.com/csi

Select the right Solar Installer

Apply for incentives

Install your system

Claim your incentives

How do I learn more about Solar Energy options?

Classes are held throughout California on a regular basis - see www.gosolarcalifornia.ca.gov/csi

Visit the Go Solar California website at http://www.gosolarcalifornia.ca.gov/

New home builders should check out the New Solar Homes Partnership http://www.gosolarcalifornia.ca.gov/nshp/index.html

Visit the California Energy Commision's Consumer Energy website at http://www.consumerenergycenter.org/

See Environment California's Million Solar Roofs website at http://www.environmentcalifornia.org/energy/million-solar-roofs

Most installers also have lots of information about the process and rebate details such as Solar Electric Systems http://www.solarelectricalsystems.com/rebates.shtml

Locally - call Darren at Inside Out Electric at (916) 204-4055 - he's been doing solar in the greater Sacramento/Placer counties for several years

What the new tax credits mean to you

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that; a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you as a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means you as a homebuyer can receive a check for the credit if you have little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit; and still receive a check for the remaining $4,000!

Phaseout Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.

Higher Loan Amounts
More good news - there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard jumbo loan rates.

Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs - This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings - This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing - This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance - This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama's plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That's because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

We will continue to update you as more news and analysis becomes available.

Watch this space for further details!

Trash Out Foreclosed Homes

I try to keep things on a positive note, but sometimes the news is just that.

Many thanks to Patty at HP for sending this video along:

http://www.silverbearcafe.com/private/11.08/foreclosure.html

I haven't been to the "Inland Empire" down South to look at real estate yet, but we experience exactly the same things up here in Northern California.

What happens to personal belongings when a home is foreclosed upon?

What happens to pools?

Watch this video and see. "Trash Outs" are something done on a regular basis - historically though, it's been in apartments and duplexes. Now the same processes are used with 4000+ square foot homes. Very sad.

In some areas the banks contract with a donation center to handle the cleanup.


Pools? If you are looking at bank owned property, and you see an empty pool - or a pool with only half the water - BE CAREFUL. Pools are designed to hold the weight of the water. When the water is gone, they can actually "pop". A good pool inspector is important.

Those mosquito eating fish? We see them all the time... placed in the pools by the county / city teams. In our area, the pools are actually located by overhead flight teams.

Existing Homeowners seek relief

We continue to keep an eye on the updates from Washington for you.
This came in yesterday from CNBC:

New Mortgage Plan: Who Qualifies and How It Works© 2009 CNBC.com

For homeowners looking to make sense of the Obama administration's new mortgage rescue plan, the program can be basically broken down into two sections. One part is for homeowners facing foreclosure due to missed payments and are at risk of defaulting on their loans. For them, the government will give the lender financial incentives to "modify" the existing mortgage, reducing the monthly payments so that the homeowner can stay current on the loan and keep their home.
The other part is for homeowners who are keeping up with their mortgage payments but can't refinance with their lender because the value of their home has fallen below the amount of the mortgage.
For these "under water" homeowners, the rescue plan will help refinance the mortgage to lower the monthly payments. There are several restrictions, however, so relatively few homeowners in this category will actually qualify.
That's the simple explanation. But both plans have a lot of moving parts, so here's what you need to know if you want to take advantage of them.

Mortgage Modification

If you're facing foreclosure and want to "modify" your mortgage to keep your home, you must meet the following criteria:

  • Have secured your mortgage before Jan. 1, 2009
  • Have a primary mortgage of less than $729,500
  • You must live on the property
  • Must fully document income with tax returns and pay stubs
  • Sign a financial hardship statement
  • Go for counseling if your total household debt totals more than 55 percent of income.

"Homeowners must be late on their payments to qualify," says Trish Summers, a private mortgage banker with Luxury Mortgage company in Stamford, Connecticut. If you meet all those qualifications, your lender will then determine how much to lower your monthly payment so it's about 31% of your gross monthly income. The interest rate could be as low as 2%.Homeowners pay no fees for the modification.

However, homeowners could face a balloon payment at the end if your lender reduced your monthly principal payment during the modification. So if your lender reduced your total payments $20,000, you could owe that amount when paid off your loan, refinanced or sold your house. But there is some financial benefit for the homeowner in the plan. For every month a homeowner makes a payment on time, the Treasury will pay an incentive that reduces the principal balance on a loan. Over five years the total principal reduction could add up to $5,000.

There's also a trial period for the modification. "The loan servicer gets paid by Fannie (Mae) or Freddie (Mac) after three months," says Summers. "If the homeowner pays the mortgage on time, the servicer gets $1,000 from the government each year for the next three years. If the mortgage is not paid on time in those three months, the deal is over." And the new loan rate can go up after 5 years. It's only a low in the beginning to help the homeowner dig themselves out.The plan is in effect until the end of 2012 and can only be used once.

Refinancing Option

If your current on your mortgage but your bank won't let you refinance because your mortgage is "under water," here's how you qualify for the government refinancing program:

  • Your home must be the primary residence
  • Your loan must be owned by Fannie Mae or Freddie Mac
  • You must have sufficient income to support the new mortgage debt
  • You can't take cash out of the new loan to pay other debt


There's another big restriction, however, that will make many homeowners ineligible for the program: the value of your house can't have fallen much below the amount of the mortgage.

"The ceiling of eligibility is 105 percent of current market value of the property-so that's not going to help homeowners who have suffered home price declines," says Greg McBride, senior financial analyst at Bankrate.com. "Say you bought a house for $320,000. Your mortgage balance is now $300,000 But the house is now worth only $225,000. You are stuck, you can't refinance, even if you made your payments on time."McBride says the loan to value ceiling should be raised. "It should be something in the neighborhood of 150 percent," says McBride.

It's too low to help people in Florida, California, Nevada and Arizona. Those markets are at the epicenter of the foreclosure crisis."Still, if you do qualify, here's what you get:

  • Your mortgage will be refinanced to 30 or 15 years with a fixed interest rate.
  • The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender
  • Interest payments but be reduced but not principal


Plenty of CriticsThe Obama plan says it will help as many as 4 million struggling borrowers modify their loans and some 5 million refinance their current loans. But industry experts remain skeptical."One in five homes have come down in value across the country," says Summers. I'm not sure this plan is going to help in refinancing. I think they really need to reduce the balance on the loans to make this work."And as for the modifications, McBride says there will be those getting help when they made bad decisions."

I don't have much hope for it," says McBride. "In reviewing the guidelines, I see nothing to prevent a homeowner that cashed out equity when prices were on the way up, from getting a modification. Are they going to give back the big screen TV and BMW? Probably not."

Call me if you need to unload that BMW cheap. Our son will be 16 in just 13 years.

Many thanks to the folks at CNBC

Posted March 9, 2009

Foreclosures in the Sacramento area

Hello Neighbors,

We had a great guest speaker at this morning's SAR (Sacramento Association of Realtors) Real Estate Finance Forum: Ken Stieger, Sacramento County Tax Assessor.

Yep, the guy who runs the shop for Sacramento County. His group (about 170 staff) set your property tax values. We talked about the processes, the billing cycles, and the data....

For Sacramento County:

  • In 2006, there were 150 foreclosures TOTAL during that 12 month period.
  • In 2008, there were 18,000+ foreclosures during that 12 month period!
  • September of 2008 saw a little over 2,000 homes get foreclosed on.

Stunning.

He showed graphs and graphs of good trend data.

2009 foreclosure rates are WAY below 2008.

Let me say that again - to you Buyers on the fence - 2009 foreclosure rates are WAY below 2008. Regardless of what you hear in the media, the county data shows that banks / lenders ARE working with home owners to save their homes.

If you are waiting for huge waves of foreclosures, we'll still see them... but it will be below the rates of 2008. Hopefully we've turned the corner - which also means huge price reductions will cease. If you are chasing REOs (foreclosed properties), take note of this trend. (March 6, 2009)

Walk Score - How walkable is your home?

Walk Score is a neat way to measure how 'walkable' your (or a prospective) neighborhood is. According to their web site "Walk Score helps people find walkable places to live." It does this by analyzing the area around a specific address and listing all types of businesses, parks, and other activities can be done without using a car or at least by being 'car-lite'.

Be healthy and save gas.

Investing 101

Are you interested in putting your hard earned dollars to work investing in a property in the northern California communities in Sacramento, Placer or surrounding areas? If so, read on...

The different types of sales you may encounter

REO homes are homes that the bank has foreclosed on, and are generally priced pretty competitively, often going for 1-2% over asking price. In Placer County the homes are highly desired and usually go quickly often $5,000 to $10,000 over asking price. The closing process usually is done within 30 days and most often the bank asks for accelerated inspection and loan approval times.

Owner occupied homes that are on the market now are usually priced at the discounted REO prices because of the competition, so excluding these homes can be a mistake; and often talking directly to the buyers can allow for a bit more negotiating power especially in the area of repairs. But in the rental or investment (or 1st time home buyer) prices of $200,000 and under there are fewer owner occupied normal sales these days. Your options really open up when you go over $200,000 - there is a bit less competition.

Short Sales are homes that the owners are negotiating with the bank to have the bank forgive all or part of the difference between the market value of the home and what they owe on their mortgage. The process really varies depending on the seller. In some cases the seller has already talked with the bank and may have an ‘approval price' to work with. So, for short sales the process is for the buyer to submit an offer to the owner, and then the owner picks one (or more) offers to present to the bank. Prior to sending the offer to the bank there may be a counter offer from the seller. The bank and the buyer often have a negotiator assigned to them and based on their conversation the bank may counter. This negotiating process often takes up to 60 days. THEN escrow starts and inspections occur.

So, why even offer on a short sale? If time is on your side it can work to your favor. Also, right now there are a lot of short sales available.

Inspections

REO and Short Sale properties are almost always sold "As IS". The bank is already losing money and does not want to put anything more into the house. The buyer really needs to do a home inspection to verify the condition of the home and many lenders require a copy of the home inspection. This used to be included in the escrow costs, but it's more common now to have the buyer pay for the home, pest and possibly a roof inspection at the time of the inspection. The default purchase agreement gives the buyer 17 days to perform all inspections, but as I mentioned above, it's more typical for the seller to cut this down to 12 , 7 or even 5 days. Fortunately you can typically get all these inspections done in that time period.

Area(s) to search

Have you thought about the area(s) to search in? Antelope is one of the best areas locally for homes in this price range, although homes in other areas do pop up.. The banks are gradually releasing more REO homes on an almost daily basis. What I do is set up a home search that reports new and changed listings that is reported each day. That way if a well priced home goes on the market you can check it out quickly. If it's priced well, it goes in the first week usually, 30 days tops. Elk Grove and Natomas also have good buys on newer homes.

Price range

Also, what price range are you looking at? And how much can you put down? How much can you put into the house in repairs? The best buys often require some repairs. Carpet & paint is most typical, but sometimes drywall, windows and doors may need to be fixed. Sometimes homes even in good areas have had their A/C stolen; although sometimes you can get the bank to pay for HVAC (Heating, Ventilation and Air Conditioning) repairs. Sometimes the home requires new kitchen cabinets or a roof. Priced right and depending on how long you plan to keep the house this may be OK, but your initial cash outlay may be different. It also depends on how ‘handy' you are or what friends you have to help... ;-). The larger your down payment, the more attractive your offer is to the seller.

Rental Expectations

Rental expectations are another item. In all real estate its LOCATION, LOCATION, LOCATION, har har. We've heard it before. Homes in better areas sell and RENT for more $'s. That's why Roseville, Rocklin and Lincoln are still ‘hot' properties. They are just less expensive than before. If you go to some areas of Sacramento there are ‘great' home prices, but I've seen homes that with for rent signs out front that appear to have been empty for months. How much can I rent the house for and will it stay rented? I use some of the rental web sites to gauge how much my clients can get for homes in the area. R&D Property Management is great for this area at R&D Properties. A Google search is also a great way to gauge current rental prices for homes - generally looking first at the number of bedrooms, and secondly the square footage. Desirable areas rent well.

Type of home

Condo, halfplex, townhouse or detached home? All have their advantages. You can often get condos in good areas especially in this area including Lincoln. There are HOA fees for Condos but that often includes exterior maintenance, common areas including a pool sometimes which can both save you money and time taking care of the exterior but also making it more desirable to rent. Even detached homes may have HOA fees depending on the area - these are most common with newer developments.

Who manages the property?

Will you be managing the property yourself? (Or do you want to be the one that gets the call at 2 a.m. to fix a leak?). Again, we've recommended R&D properties and have had good feedback. Their rates are on their website, and you can factor that in with the rental analysis.

Financing

Have you talked with anyone about financing? Talk to your realtor for recommendations if you don't have someone in mind. In today's market I always recommend someone local and full time to handle the fast pace of typical transactions.

Process

Prior to submitting an offer we typically need a deposit check (kept on file at the brokerage and not given to the escrow company until we get an offer accepted, and we use that 1 check for all offers submitted), a loan pre-approval document, and then combine these documents with the offer.

Next Steps

Right now there are 138 properties listed in the Roseville, Rocklin, Auburn, Lincoln & Antelope area between $140,00 and $180,000. This includes condos, detached homes, etc and is REO Bank Owned homes, Short Sales and ‘regular' sales. I picked this price range because they seem to be the hottest properties for investment and 1st time home buyers.

Next Steps -

  1. Fine tune your requirements. More than likely, these will change as you look at houses and gain a better understanding of what the market actually is. Based on your requirements I can set up a home search.
  2. Meet and go over what we call our "green folder" process. We have a process that we follow at Neighborly to ensure that everything is covered.
  3. See some homes! Finally the FUN part. It's an education to actually see what's out there vs. what we see on the web. (We can combine #2 and #3 together depending on your schedule).
  4. Put some offers out there. Yes, plural. Usually my clients have multiple offers out because of the competition.

Buyer's Market... or just plain crazy?

What could be better for new home buyers and investors than low home prices and mortgage rates? Not much! It seems like the perfect combination, and I'm working with several first time home buyers wanting to take advantage of the current environment.

One of the first questions they have is... "when should we schedule our move-out date?" Answering that question shows that the buyer's market we are currently in is not what most of us consider a buyer's market.

Inventory

First of all, let's look at the inventory situation for single family detached homes in Placer County. There are just over 2000 homes in the MetroList system in Mid-February for the county. However, that's a little misleading as 1112 of these homes have been sitting on the market for 90 days or more. Only 1/3 of the homes sold in the past 90 days were on the market more than 3 months. In other words, if a home is priced correctly it should sell in 30 to 90 days. When you factor in the 'sitting homes' we are looking at a 4 month supply of homes under $300,000 and a 7 ½ month supply for homes over $300,000.

Competition

The second factor is the number of individuals looking for homes.
For value priced properties that first time home buyers pursue, they compete with investors who are also aggressively purchasing properties in the same price range.

Results

What does this mean, bottom line? Most often buyers are competing with others when they submit an offer. For bank owned and short sale properties this means that you had better be pretty much on the mark when you submit your offer. And even at that, you may get beat by another who has offered more cash, better terms, or simply submitted a higher offer.

However, does this mean you should give up and not try? Of course not! Here are some tips to follow:

  • Have your expectations set that you are in a competitive environment and you may not get that first home you fall in love with.
  • Be flexible with your requirements so you don't pass up good values.
  • Be prepared to submit offers on several homes and broaden your searches to include areas or types of homes that may not be your 1st choice but will fulfill a majority of your requirements.
  • Talk to your Realtor to see how you can offset restricting requirements such as low down payment or special terms required.
  • Keep saving money during the search process so you can add to your down payment or cover closing costs without financing.
  • If your handy, consider fixing up a home; possibly delaying some improvements until you have the cash to do so.
  • Most importantly is to keep having fun and don't give up.

FSBO Notes #5

Question 5 to consider is:


Do you want to sell your home in the next 30 days?


We'll get into this question in more detail later, but things to consider is how am I going to market my home to get the traffic and exposure so that I minimize the impact to my family, and so I can move on to the next step. Statistically, it's a challenge to sell a home as a For Sale By Owner in 30 days or less. Usually the issues are exposure and price. There are ways to help.

Contact me for more tips!

FSBO Notes #4

The 4th question is more complicated than it looks:


Are you absolutely determined to save money on the sale of your home?


Well, at first glance that's a For Sure! But there are many ways to save money when selling and purchasing a home. What you save in Real Estate commission may be offset by you having to do your own advertising, photography, open houses, buyer recruiting, buyer qualification, etc. On the other hand, if your up for these challenges you need to look at the cost-benefit. There are costs associated with the sale of your home when you do it yourself. Only with thoughtful consideration can you determine if you are saving enough to go the For Sale by Owner route. If so, GREAT!


Promise of rain today in Lincoln, California! Now, that's GOOD news.

FSBO Notes #3

The third question in the series of evaluating whether going the For Sale By Owner route yourself is... (Drum roll)

Are you willing to do different things?

Unless you have been a real estate agent in the past (and probably specifically in California) this is all pretty new territory. Lots of things to learn, and many roles to play.

Special Programs for Lincoln and Placer County

Areas of Placer County, including Lincoln, qualify for special USDA loan packages for rural areas. First time buyers are among those who qualify. This can include a 100% loan packing including closing costs and repairs or improvements to the property within the value of the home. The city of Lincoln also has special programs for first time home buyers. What a great time to take advantage of the low interest rates and low home prices. Become a home owner! More information here.

Hope you had a safe halloween! We sure had fun seeing all the kids dressed up.
Orignal post: November 6, 2008

FSBO Notes #2

A second question to consider when you are deciding whether to sell your home yourself is:
Are you a risk taker?

Typically, those who sell their home themselves are comfortable taking bigger risks. All the responsibilities for showing a home, advertising, doing open houses, writing contracts are no longer someone elses responsibility.

If so, stay tuned for the next question!

FSBO Notes #1

This is the first of a series of tips for those of you considering going the For Sale By Owner (FSBO) route. The first question to consider is:

Are you comfortable letting strangers into your home at night, on weekends, or at a moment's notice?

Most buyers are used to having pretty immediate access to homes when they are out with a Realtor. Realtors also qualify their clients - something I'll talk about more later.

This series of blog entires are exploring the pros and cons of selling your house the FSBO way. There are 6 key questions which need to be considered when deciding if you want to do it yourself.

Placer and Sacramento County Fees and Helpful Links

Who pays for what? Where to get more information:

Placer County:
Assessor's Office
Transfer Tax Code
Preliminary Change of Ownership Report

Placer County Fees paid by:

Recording Fees: Buyer
Title Insurance: Seller or Splilt
Escrow Fees: Split
County Transfer Tax: Seller

Sacramento County:

Assessor's Office
Transfer Tax Code
Preliminary Change of Ownership Report

Sacramento County Fees paid by:

Recording Fees: Buyer ($2.75)
Title Insurance: Seller (City Code)
Escrow Fees: Seller or Split
County Transfer Tax: Seller
City Transfer Tax: Seller or Split
(Originally Posted October 9, 2008)

How to STAND out from the crowd

In today's market that you need to so something other than simply posting a brief description and a few snapshots on MLS to sell your property. You need to capture the attention of prospective buyers.
Recently, premier Seattle Real Estate photographer Larry Lohrman wrote, "... strong photography is one of the few alternatives that agents and home sellers have to make their marketing of a property standout from the competition other than reducing the price." Well said, Larry!
Invest some time and money into presenting your home in the best possible manner.
Talk to me about how to present your home in the best light.
Originally Posted: October 06 2008 02:42PM

Is that all we do is REO?

Sometimes, it seems like all we deal with right now is bank owned properties. So, just for sanity I calculated a few of my own statistics for Placer County, California. Out of the 2,561 residential homes sold since April 2008, almost 60% were not bank owned (REO) properties. If I just look at the past 30 days it's 62%. In talking with Chris Headrick of Mortgage & Investment Consulting, he sees even larger gains in the percentage when looking at specific communities within the county.
Good note for buyers - don't just focus on bank owned properties. There are many good buys out there from traditional sellers. Don't think all the 'good buys' are stressed sales! Shop around.

Originally Posted October 2nd 2008