Real Estate Information

Today many homeowners find themselves upside down in their property and in financial hardship due to a challenging economy.  They are uncertain as to what to do, and realize they cannot maintain the monthly payments for a home that is worth less than the actual loan balance.  Some have turned towards a loan modification, but unfortunately a great number of homeowners who apply will not qualify.  Are there any helpful answers to resolve this situation?

Some who need to sell property which has devalued are doing a Short Sale.  A Short Sale is the ability to sell the home for the fair market value, yet the bank accepts less than what is owed on the mortgage.

A number of homeowners are turning to Short-Sale Certified Realtors to facilitate their Short Sale.  One of the criteria a bank looks at is a seller's hardship.  A legitimate hardship can be found due to one or more of the following reasons:  unemployment, reduction in job hours, death of a spouse, decline in business if self-employed, a medical or recent disability or illness, relocation, military obligations, and divorce.

In a Short Sale you cannot walk away with any monies from the sale, but are generally free from the "non-recourse" debt against the property.

A Short Sale is not like a Foreclosure.  A Foreclosure is detrimental to ones credit score.  A Short Sale is not reported on a credit report as a Short Sale but is usually reported as a "debt settled" which is generally less damaging to one's credit.

How long could this process take?  What information will you need to submit to find out if you qualify for a Short Sale?  Are you not even sure what questions to ask?  Please feel free to call with no obligation.  We are here to provide you with options and possibilities.

Borrowers that were in default at the time of the short sale of their previously owned primary residence ARE NOT eligible for a new FHA loan for three years from the date of the pre-foreclosure sale.   This means that buyers wanting to purchase a similar or superior property within a reasonable commuting distance will not be able to obtain a new FHA loan.

But if borrowers were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and the proceeds from the short sale serve as payment in full, they are considered eligible for a new FHA loan if they. So, before stopping making payments on an undesirable loan, consider your possibilities…

You bet! Now even those moving up to a bigger house or better area, and those downsizing can benefit from up to $6,500 tax credit. I know it may not sound like much, but when you are sitting there in front of your accountant doing your taxes, it will help a lot.

The economy needs every bit of help it can get, and by approving this credit, the government hopes to encourage the mid-level- price houses to move. Just think, if only the first time buyers get help and buy houses, pretty soon we will run out of inventory and, even worse, prices are going to start going up again (supply and demand rule, remember?). If the move-up people get motivated to buy a bigger/better house, they will most likely sell their entry level houses, helping balance the inventory.

I read somewhere that for every house that sells, about $62,000 is thrown into the economy! No kidding… Have you ever thought about all the areas and businesses that get somehow related to a real estate transaction? Here are just a few: escrow and title companies, home inspectors, appraisers, banks, moving companies, carpet cleaning or replacement, landscaping, insurance, painters, roofers, termite companies, and much more.

So, it is not hard to see why the government is trying to encourage more activity in the real estate arena. After all, it is an extremely important segment of our economy.

With consumer confidence rising in May to its highest level in eight months, housing starts increasing more than 17 percent in May compared with the previous month, and sales of existing homes climbing 2.9 percent in April nationwide, it appears that the housing market may be stabilizing.

MAKING SENSE OF THE STORY FOR CONSUMERS

·        Although sales of existing, single-family homes rose 35.2 percent in May in California, compared with a year ago, the median price declined 30.4 percent.  Some industry analysts predict that as specialized adjustable-rate mortgages, known as option ARMS and Alt-A mortgages reset over the next 18 to 24 months, prices could decline further before stabilizing.

·        “We are seeing strong buying activity, particularly in those boom and bust markets, where prices have declined significantly.  Buyers are coming in and fighting over properties – there is multiple bidding in California and Florida,” says Lawrence Yun, chief economist with the NATIONAL ASSOCIATION OF REALTORS.

·        Sales of existing homes are soaring as many investors and first-time buyers purchase distressed properties.  Yun estimates that about 50 percent of current sales involve distressed properties, and he expects the trend to continue as foreclosures rise in the months ahead.

·        Although some economists predict home prices will continue to decline in the coming months, California’s median home price rose for the third consecutive month in May, posting the largest monthly increase on record for the month of May.

·        Some buyers are trying to time the bottom of the market and purchase once it appears that prices are consistently and steadily rising.  Many housing forecasters advise against this approach as buyers should not view their homes solely as investment opportunities.  Historically, the average annual rate of return on a home lived in for five years or more is nearly 12 percent, based on data C.A.R. has collected over the last 40 years.

That is the question we hear the most recently: are we at the bottom?

If you are a buyer, you can’t wait for the headlines to say “Buy now!” Headlines will only let you know when the best time has passed. In other words, you only know for sure that you hit the bottom after the fact. There will always be uncertainties, but what we know for sure is that this is a Buyers Market, with lots of inventory to choose from and record low interest rates. This is a safe zone and the smart buyers buy in a “Buyers Market safe zone”. The greedy buyers keep waiting for the lucky zone, and although they may get lucky, they may also miss the boat. Anyone who buys at the top of the market is unlucky and anyone who buys at the bottom is lucky. Like winning the lottery, will you wait till that happens to give your family a nice home?

Ask yourself: have the prices dropped low enough? If your answer is yes, then what are you waiting for? Go buy a house!!!

Myth or Fact?

I had always heard that one should not give people’s food to pets, but had never thought much about it till I got my own dog: a new puppy that I named Suki. Then I started reading about it, and talking to other pet owners. The opinions vary, but my conclusion was that when it comes to pizza, chicken wings, French fries, and the like, it’s true; you shouldn’t be sharing high-fat, spicy or potentially toxic foods with your pet, especially puppies. But cantaloupe, crunchy raw or lightly steamed vegetables, and meat with fat and gristle trimmed off are favorites of many animals and shouldn’t be off limits. For instance, baby carrots, apples and popcorn are excellent low-calorie treats for dogs. And as long as you’re using high-quality ingredients and a good recipe that meets a pet’s nutritional needs, “people food” is perfectly healthy as a regular meal for your dog or cat. I still struggle a bit with this concept, but that is what the experts say.

According to veterinary nutritionist Sally Perea, “The biggest concern with feeding (pets) ‘people food’ is that most people feed too much and create an unbalanced or incomplete diet. As a rule, treats or human foods fed to a pet on a commercial diet should be limited to no more than 10 percent of their daily calories.”

Fact: there are some foods you should never feed your pets:

·         Chocolate

·         Onions

·         Grapes

·         Raisins.

·         Yeast dough

·         Alcohol

·         Tobacco

·         Marijuana

·         Moldy or spoiled food

·         Wild mushrooms

·         Large amounts of raw fish

·         Potato, rhubarb or tomato leaves

·         Large amounts of raw liver

·         Large numbers of macadamia nuts

·         Fruit pits

But feeding a dog or cat from the table? That's definitely a no-no, and no matter how much Suki begs, she won’t get any. Be careful: It takes only one time to create an obnoxious beggar!

Finally, there may be some relief for the housing market!  Obama unveiled his Homeowner Affordability and Stability plan, which he hopes will keep millions of borrowers in their homes.

This plan includes two initiatives to help struggling homeowners.  One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth.  The second attempts to lower monthly payments for those at risk of losing their home.  The plan also includes a third initiative to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.

What is different about these initiatives is that in the past, homeowners generally weren't receiving any help (loan modifications, etc.) until they were already behind on their monthly mortgage payments.  These new initiatives are geared towards helping credit-worthy and responsible homeowners who are still current on their mortgages, but are struggling to stay current.

Many of the plan details are still being worked out and will be announced at a later date.  But hopefully this will be a step in the right direction!

So, you finally feel you are ready to buy a home and you can't wait to go online to search for properties.  Especially, when you hear that you can get a great deal on a bank repo.  Well, let me provide you with the real scoop on foreclosures. 

Yes, it is true bank repos are usually priced below market value.  Unfortunately, pricing bank repo's below market value usually leads to multiple offers.  That is if the property is in a desirable area and even more so if it is in good condition.  So, what needs to be taken into account is how much can you offer?  Let's take for example a bank repo property that is listed at $300,000 in a favorable location and you qualify for that much.  This leads you to think.  This property could be mine, but if you like it, there are probably 10 other people that are thinking the same thing.  This is when you have to realize that if another interested pary qualifies for more than $300,000 then they will probably get it.  What is happening is that some bank repo properties are becoming their own micro "hot market".  Let me provide you with another real example.  I previewed a property (bank repo) in a very beautiful neighborhood that had not been on the market for a day, by the time I returned to the office the property had an accepted offer.  It had not even been one day.

Another fact to consider is that there are buyers who are bringing all cash to the table.  There are others who are putting 20 to 50 percent down.  So, the competition can be fierce.  Lastly, once an offer is accepted please be aware that if you do not close on time there can be a per diem charge.  All this is not to say don't buy foreclosures.  It is just important to know the realities of this type of market so you won't be in for too many surprises.

It’s official!  President Obama signed the $787 billion economic stimulus bill that brings some good news to the mortgage and real estate industries.  The bill is known as the American Recovery and Reinvestment Act of 2009.

The bill restores the previous Fannie Mae/Freddie Mac loan limits of 2008 to $729,500 for some high-cost areas, which should include Los Angeles and Orange Counties.

The bill also increases the First Time Home Buyer Credit enacted under the Housing and Economic Recovery Act to $8,000 (from $7,500) and extends the credit to December 1, 2009 with no repayment requirement. Under the previous bill signed last year, the tax credit of $7500 had to be re-paid over 15 years.  It appears that the new credit is still just for first-time home buyers.

Consult your accountant and make sure you benefit from this credit.

 Recent Frequently Asked Questions

Home prices are down and interest rates are at record low levels, making housing affordable to a lot of people who could not afford to buy before.  Inventory of homes is high, but the number of eager and serious buyers out there makes it a market to consider.

 Q:  Could I sell my house in this kind of market?

 A:  Don’t hesitate to put your house on the market.   The three things to consider are: price, condition and marketing.  First you need to price according to the local and current market.  Then think of it as a “beauty contest”, where having a good looking home will help you sell faster, but not necessarily for more.  MARKETING:  let us show you our aggressive marketing plan to get your house SOLD!

 Q:  What if I must sell my home as a Short-Sale?

 A:  If you have tried to do a loan modification with your lender and had no success, a short sale may be your only option.  Do not despair.  Using a qualified Realtor to do the proper negotiating and managing of the short-sale process with your lender, you will avoid a foreclosure that could ruin your credit for years.  We have proven records of closing short-sale transactions, and we can definitely help you.

 Q:  What if I am a Buyer?

 A:  You couldn’t be in a better market!  There is a lot of inventory to choose from and interest rates are very low.  There is a chance prices will go down a little more, but there is also a chance that interest rates will go up.  So even if the prices go down $20,000 further, if interest rates go up even 1%, you won’t be able to afford that same house even at the lower price.  Moreover, we won’t know that we hit the bottom of the market till after the fact.  So, if you find a house you like and it is right for you and your family, buy it now!

Feel free to contact us if you would like more information or have any other Real Estate questions.