How to get your REO offer accepted - just break the front door key in the lock!

My very excited first-time homebuyer met me at the newly-listed house at 7:30 am this morning.

She was sure that this REO property was THE house, and yesterday I had urged her to meet me there before other buyers had the opportunity to view it, and submit offers ahead of hers!

As usual, I got there early, and retrieved the key from the lock-box. The top lock opened OK, but the key didn’t fit in the bottom lock. I was still struggling to open the door when my buyer client arrived, all excited and happy that she was about to see the house…..

 

I texted the listing agent and was pleasantly surprised that he responded almost immediately, (at 7:30 in the morning!):

“Yes I know… Someone broke the key in the lock.” He texted. Then: “Sucks, there is more and more of it happening these days”.

My client understood and told me that it wasn’t a big deal that she had travelled for 25 minutes at that crazy hour in the morning to meet me. Of course neither of us was happy.

Clearly agents are so desperate to get a property for their buyers that they resort to this tactic, (correctly), assuming that if they prevent other buyers from viewing the property, there is more chance that THEIR offer would be accepted.

Yes, inventory is the lowest it’s been since December 2005, and what with the lowest interest rates we’ve EVER seen in this country, demand is higher that the supply. BUT, (this to those few guilty agents out there – you know who you are), this is not acceptable.

Breaking keys in locks or removing them from the premises, is not only unethical, but ILLEGAL too!

And to the listing agents out there, what’s with these combo lock-boxes? You have no idea who last opened the lock-box, so don’t know who the offending agent is. It’s an MLS regulation that the electronic lock-boxes are used on all listings, so why aren’t you using them?

It’s great to get an email immediately after an electronic lock-box s opened, telling you WHO opened WHICH lockbox at WHICH property, and WHEN!

Yes I’m ranting and raving a bit, (a bit?!), but you’ll understand why when I explain that all this happened BEFORE my first Starbucks Grande Espresso Macchiato!!

Happy Thanksgiving everyone!

It's not magic. If there aren't any listings out there.... make one appear.

Everyone knows that house prices are on the way up again, in fact the average sold price per square foot of SFR homes in September was the highest Irvine has seen since April 2010.

A few weeks ago I blogged about the super-low housing inventory.  This low supply has caused bidding-wars, and many buyers are throwing caution to the wind, submitting offers higher than list price, and dealing with the appraisal issues later. A large percentage of these buyers remove appraisal and loan contingencies long before the appraisal has even been ordered. That's a great way to get an offer accepted these days, as long as the buyers understands that they will have to bring more money to the table, and possibly have unexpected mortgage insurance costs too.
 
Although prices are rising, they are still generally much lower than years past, and with interest rates being the lowest that they've ever been, it remains a seller's market here in Irvine and beyond.
 
A buyer client of mine was out-bid on an offer he made, (2% higher than list price), and the sellers accepted an offer 5.2% higher than their asking price! I knew that I had to find him a property that matched his wish-list although there were no other properties listed. I do this for my buyer clients.
 
How do I find listings when they do not exist? Well, there are a few ways, and without giving away all my secrets, let me tell you how I found this buyer a home. I wrote a letter to all homeowners in the tract that my buyer liked, explaining our challenge, and then, a couple of days later, I put on my walking shoes, and started door-knocking.

I've had good results doing this in the past. Some homeowners are skeptical, thinking that my intention was to get a regular listing, and that my buyers don't even exist. However, after explaining that a "one-party-show" agreement was only for a couple of days, didn't tie them up for months on end, and either the buyers liked the house and submitted an offer.... or they don't! No harm - no foul. Everyone moves on.
 
We close escrow on the "one party show" listing today! Both my buyer and seller are very happy and the transaction was an extremely smooth one.
 
Sellers who like the idea of a "one party show" are made to understand that it's likely that they'd sell their house for a higher price if they exposed it to all buyers, rather than just to one buyer. For a regular listing, I advertize on hundreds of websites as well as in print, with direct mail, and more. Most "one-party-show" sellers prefer not to have to keep their homes spic and span, not to have to vacate the house during showings and open houses.
 
22 Woodbridge homes sold in September 2012, at prices from $290K, (for a 2 bedroom short sale condo at 218 Greenmoor), to $950K for 21 Bayside, a 4 bedroom standard sale SFR.
 
Right now, there are only 33 Woodbridge homes listed for sale!
 
The prices of Woodbridge homes for sale right now, range from $355K for a 3 bedroom 1,135 square foot attached condo at 193 Briarwood, (standard sale), to $1,750,000 for a 2 bedroom 3,363 square foot SFR AT 18 Bayview!
 
42 are in escrow, (Pending or Backup Offers status), at a total list price of $19.4 million.

Today's housing market challenges bring OPPORTUNITIES.

All indicators are pointing to a gradual real estate market recovery. Woodbridge, (and the rest of Irvine), has a shortage of available housing inventory, which is sparking price increases and bidding wars for the first time in many years.

This chart shows that we haven't seen inventory this low since December 2005!

In addition to this low inventory, rising rental costs and the lowest mortgage rates EVER, are a significant incentive for potential homeowners to purchase and also for investors to increase their portfolios.

Over a third of Woodbridge sales prices the past couple of months were at, or OVER list price.

Attitudes about the U.S. housing market continue to improve. Fannie Mae’s recent survey showed that 73% of Americans surveyed believe it is a good time to buy a home.

Most people know that while real estate is LOCAL, the market has become GLOBAL. About a third of all buyers these days are from overseas, and international buyers bought $82.5 billion in real estate in the U.S. over the past year.

There is always an attraction to buying a foreclosed property, (REO), or a short sale. Whenever I meet with new clients, particularly investors, their purchase goals typically include the purchase of a distressed property. Most buyers still believe that they can get the best screaming deal ever by buying a distressed property.

The problem in Irvine is there are not many to choose from.

In the past 9 weeks, only 14 of the 65 Woodbridge closed sales were distressed properties, and as of today, NONE of the 32 active Woodbridge listings are distressed.

Last year when defaults were higher and the market was weaker, the number of Irvine bank-owned properties, (REOs), listed as active, regularly ranged between 35 and 50.

Today we have only SIX active bank-owned properties listed in the whole of Irvine, and there are only 30 short sale listings, (out of a total of 402 active Irvine listings). Note that many of those "active" short sales are not really active. Many agents working with offers just haven't changed the status of the listings on the MLS to "backup offers" or "pending".

There are 28 Woodbridge distressed properties in "backup offers" or "pending" status right now, and who knows ho long each will take to close, (and some will NOT close!). Short sales can take anything from a few months to over a YEAR to close.

Sometimes buyers have offers in on multiple properties, or their situation changes after a few months, and when the whole long process is finally near completion, they decide not to go through with the purchase. So the process starts again with another buyer.

An offer was accepted on my 9 Cedarlake short sale listing after only a few days on the market. This was in late January. The "buyer" disappeared after six months, so I relisted the property as “active”, and an offer was accepted the next day. Escrow is scheduled to close this week.

Look at the great location of this Lakeside tract home.

Sure there are challenges in today's housing market, but those challenges bring opportunities.

The main challenge that I see in the market today is the shortage of housing. I believe that shortly, more and more homeowners who have casually been thinking of selling, will realize that low supply = high demand, and the "sellers market" that we are in right now, could be a good time to talk with a real estate professional about their home's value, and to find out what creative means that agent could use to get top dollar for their home.

Foreclosure Crisis Subsiding?

Severely delinquent balances among first mortgages are on the decline, according to Equifax’s May National Consumer Credit Trends Report.

While still elevated relative to historic levels, the May 2012 total of $450 billion in delinquent balances represents a 37 percent decline from the peak of more than $700 billion in January 2010. Of note is that 70 percent of outstanding delinquencies among first mortgages still remain tied to loans opened between 2005-2007.

The greatest level of change was seen among severely delinquent non-agency first mortgage loans (90+ days past due or in foreclosure), which fell 45 percent to $320 billion in May 2012 from its peak of $580 billion in January 2010. By comparison, agency-sourced (Fannie Mae, Freddie Mac, FHA and VA) first mortgages reported as severely delinquent declined just 9 percent to $130 billion in May 2012 after peaking at $142 billion in January 2010. Similar reductions in severely delinquent totals were seen among home equity installment loans, which declined 31 percent from their peak in February 2011 ($880 million) to May 2012 ($615 million).

“That severe mortgage delinquencies are trending downward is not surprising given generally improving economic conditions,” explains Equifax Chief Economist Amy Crews Cutts. “What is surprising is that even with the foreclosure moratoriums and and the slow resolution of foreclosure backlogs, the downward trend has been a steady, consistent drumbeat of recovery. If this pace continues, we expect the volume of severely delinquent mortgage balances to return to mid-2007 levels by the end of 2014.”

Other highlights from the most recent data include:
* Home equity revolving balances fell 18 percent from their peak of $680 billion in May 2009 to $560 billion in May 2012.

* Total credit limits among home equity revolving accounts have declined 27 percent to $1.02 trillion in May 2012 since their peak in March 2008 ($1.30 trillion).

* Year-to-date total mortgage write-offs through May 2012 are down 28 percent from
their 2010 peak. Home mortgage balances are down 12.5 percent in May 2012 from
their record-high of $9.8 trillion set in Oct. 2008. Total mortgage debt outstanding now sits at $8.6 trillion.

Source: Equifax, Inc.

4 bedroom Single Family home ~ just listed for lease

Today I listed a spacious 2 story Woodbridge SINGLE FAMILY home for lease.

It's a Magnolia model at 4 Fairdawn, (4 bedrooms, 2 car garage), with GRANITE COUNTERTOPS in the kitchen.

Located in the popular Summerfield tract of Woodbridge, the home is within easy walking distance to award-winning schools, the Blue Lake Swim Club, South Lake, parks & tennis courts.

The kitchen has lots of storage and has a charming eating alcove.

The family room opens up to the kitchen and has an open view of the LARGE AND PRIVATE BACKYARD, perfect for entertaining.

Separate step-down living room with a fireplace and cathedral ceilings. AIRCON & CEILING FANS. Formal dining room. INSIDE LAUNDRY.

This really is a great family home.

The landlord will pay for the gardener.

Please contact me if you, or anyone you know, may be interested in viewing the property.

See more of 4 Fairdawn at www.WoodbridgeRental.com

First new Woodbridge development in 15 years!

“The Branches” is being built in Woodbridge by William Lyon Homes.

This is your only opportunity to own a brand new house in Woodbridge ... no new developments have been built in Woodbridge in 15 years!

An unusual, (and good!), thing about this development is that there is no Mello-Roos.

“The Branches” will be made up of 48 detached homes, at Alderwood and E. Yale Loop, adjacent to Fallbrook Park, and you can see the plan below.
The 6.2-acre site was obtained after the closing and sale of a school. The model homes should be ready to view in February next year.

A bit about the new homes:
Three floor plans.
Two stories.
Living area of between 2,209 & 2,542 square feet.
3, 4 & 5 bedrooms.
2 car garages.
Lot sizes will average 3,900 square feet.

The homes are expected to be priced from the $900,000s

What ARE those "not on the net yet" properties?

A lot of house hunters are getting really annoyed with their offers being rejected because of the low supply of homes in today's market. Buyers in the lower price ranges are getting hit the most, with investors paying cash for properties.

How is a buyer putting down 5%, (or less), supposed to compete?

Many buyers working with a First Team Real Estate agent have an advantage on the other buyers out there, because they are getting exposed to listings BEFORE those listings are being advertised.

I'm guessing that other brokerages will follow First Team's lead, but most don't have the number of listings or the infrastructure to do this.

In the past, mainly only the higher-priced homes were "not on the net yet" for a number of reasons, one of which being that sellers didn't want their neighbors to know.

These days, lower-priced houses are a big part of the properties that aren't being advertised yet, and buyers viewing those homes first, stand a better chance of not getting involved in BIDDING WARS.

Sellers who are busy sprucing-up their homes, (painting, making repairs etc), love the "not on the net yet" program because they don't have to bother with keeping their homes "show ready", or dealing with Open Houses. They understand that if an acceptable offer isn't forthcoming before the listing hits the MLS and the extensive marketing begins, they will go the conventional route.

Interested in seeing "Sneak Preview" homes? Call me on 949-232-5634 or shoot me an email.



 

3 Questions You Must Answer When Buying a Home

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And some of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought six years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. What are the experts recommending?
In the last 120 days, many experts have said that buying now makes sense. This list includes: John Talbott, Christopher Thornberg and Warren Buffett.

2. When will I begin to see appreciation if I buy now?
This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010. They ask 100+ housing industry experts to project housing prices through 2016. The most current survey shows that the experts are predicting prices to remain relatively flat in 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2016.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: you want to buy low and sell high. This decision should not only be a financial one however.

That leads us to our third and final question:

3. Why am I buying a home in the first place?
This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Survey shows that the four major reasons people buy a home have nothing to do with money:
   * A good place to raise children and for them to get a good education
   * A place where you and your family feel safe
   * More space for you and your family
   * Control of the space
What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason you decide to purchase or not.

Bottom Line
Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway.

Bank of America offers relo help to short-sellers

Delinquent borrowers must obtain preapproved short-sale price from bank

Bank of America says it will provide up to $30,000 in relocation assistance to delinquent borrowers who work with the bank to obtain a preapproved short-sale price before submitting purchase offers, Inman News reported.

Short sales must be initiated by the end of this year and close by Sept. 26, 2013, to be eligible for the payments, which will range from $2,500 to $30,000 at the completion of a qualifying short sale.

Payments will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations, Bank of America said in announcing the program.

The program -- based on a similar incentive offer Bank of America tested last year in Florida will be available nationally. But Bank of America anticipates the greatest response will come from borrowers in California, Nevada, Arizona, Florida, and other states hit hardest by the economic downturn and falling property values.

Customers who believe they may be eligible for Bank of America's short-sale relocation assistance program may contact program specialists at (877) 459-2852. Qualifying short sales that have already started but have not closed may be eligible for the program.

Bank of America says its short-sale initiatives have generated 200,000 short sales in the last two years and another 30,000 in the first three months of this year.

Last month, Bank of America announced it was shortening decision times on short-sale offers to 20 days, down from 45 days or longer.

Do you owe more than your house is worth? Let's discuss your options.

A short sale may, or may not, be right for you! Read a bit about short sales at InnovativeShortSales.com

Free Spring Cleaning Shredding Event tomorrow,

The City of Irvine is sponsoring a free Spring Cleaning Shredding Event tomorrow, May 5th, from 9 a.m.-noon for Irvine residents to safely and securely dispose of unwanted documents.

Mobile shredding units will be on location at: Lakeview Senior Center, 20 Lake Road; Turtle Rock Community Park, 1 Sunnyhill; and Heritage Community Park, 14301 Yale Ave. Residents can dispose of a maximum of five Bankers-size file boxes filled with documents per person. All items accepted will be shredded on site, so don't panic that someone will see any personal info!

Spring cleaning doesn't need to stop with your paper items: Local charitable organizations will also be onsite accepting unwanted or slightly used clothing. Call me at 949-232-5634 for a list of charities - some will pick up from your house!

Here's the link to the flyer about the event.

Also on my new facebook page, DebbieDoesIrvine  (If you "like" it, please "like" it!)

Americans Predict Rents and Home Prices to Increase

I just had a look at the latest National Housing Survey.Fannie Mae does a monthly survey covering different aspects of the housing market.
Here are some record numbers I found interesting in Fannie Mae’s March report, (emphasis added).

µ Thirty-three percent of respondents expect home prices to increase over the next 12 months, the highest level over the past 12 months.

µ The percentage of respondents who say it is a good time to buy rose to 73 percent, the highest level in over a year.

µ Forty-eight percent of respondents think that home rental prices will go up, the highest number recorded to date.

µ On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, the highest number recorded to date.

Doug Duncan, chief economist of Fannie Mae, capped the report off by stating:

“Conditions are coming together to encourage people to want to buy homes. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”

This Spring Could Be The Best Home-Buying Season In Years

I found a great article from the Forbes website today written by Morgan Brennan, Forbes Staff.

This will be posted in multiple parts over the next few days, so you can absorb all of the information that is inside. Keep coming back for the whole picture...

The lion’s share of home sales typically come in the spring and early summer. April, May, June and July account for more than 40% of all housing transactions annually, in large part thanks to weather. Economists, realtors and Wall Streeters have been quick to surmise that 2012 will be the year of the market bottom, and with that prognosis circulating, it begs the question of what sellers and buyers can expect in housing as that high season nears.

“The spring home buying season looks bright because of an elevated level of contract offers so far this year,” Lawrence Yun, chief economist of NAR, said in a statement earlier this week. February home sales, despite a slight dip from January to February, remain well above 2011 numbers.

The Pending Home Sales Index, which reflects signed contracts that have yet to close, from the National Association of Realtors (NAR) was 9.2% higher than February of 2011 and existing-homes sales, or closed contracts, were 8.8% higher than last year.

That increased demand from buyers has pushed inventory levels 19% lower than they were this time last year, with an estimated 2.43 million homes available for sale. In fact, housing inventory is at a five-year low nationally right now. It means owners tinkering with the thought of selling have less competition to contend with, compared to the past five years. It also means housing may be inching toward a long-awaited recovery.

National Housing Survey 2012

The 2012 National Housing Survey from Fannie Mae is out and the KCM Crew brings us some of the highlights...

Each quarter, Fannie Mae releases their National Housing Survey. They survey the American public on a multitude of questions concerning today’s housing market. I like to pull out some of the findings I deem most interesting each time it is released. Here they are for the most recent report:

84% of the general population believes that owning a home makes more sense than renting.

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four
reasons, in order, are:

1. It means having a good place to raise children and provide them with a good education.
2. You have a physical structure where you and your family feel safe.
3. It allows you to have more space for your family.
4. It gives you control of what you do with your living space (renovations and updates).

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes
there is a money component to homeownership. Here is what they said on this issue:

63% of the general population believes that homeownership is a ‘safe’ investment.
53% believe that homeownership has more potential as an investment than any other traditional asset class.

Rent vs. Buy

I'm always interested in the difference people see in renting vs. owning.

64% of renters have aspirations to someday own their own home.
70% of renters think that owning is superior to renting.


Bottom Line

My belief in the value of homeownership grows each time this survey is released

Buying a Home? The COST Is More Important Than the PRICE

When to buy has been the question on people's minds for some time now.

You'll hear many different answers to this question and most of those are focused on housing prices and when will we reach the bottom. My typical answer to that question surrounds the cost of the home vs. the price. Our friends at Keeping Current Matters have joined the chorus on this subject.

So when considering Buying a Home - remember - The COST Is More Important Than the PRICE!...

I've often advised buyers to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming you are not an all cash buyer, is the mortgage rate.

The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. Recently, there are more people talking about the possibility that mortgage rates could begin to increase.

HSH.com studies trends in mortgage rates. They explain:

“A better economic climate almost always brings higher rates, and a lessening of the troubles in Europe from massive central bank assistance adds to the movement of money from safe havens to more risky assets, driving rates upward.”

Dan Green of The Daily Market Reports recently stated:

“The Fed sees growth coming faster than originally expected. There’s suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out. With no stimulus, mortgage rates rise.”

Lawrence Yun, chief economist for the National Assoc of Realtors, recently wrote:

“Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent average rate in the past five months on a 30-year fixed mortgage, the new rates will soon be in the range of 4.3 to 4.6 percent.”

Yun explains his logic here.

We do not attempt to predict future interest rates. We leave that up to the experts in the field. However, we want our readers to understand the potential impact on the cost of purchasing a home if they do rise. Here is a simple table that shows, even if the PRICE of a home softens, the COST of a home could increase.


Bottom Line

Many purchasers think they should wait until they are sure that prices have hit bottom. Deciding whether or not to wait should be determined by where the COST of a home is headed.

Three reasons why now is a good time to buy.

Interest rates are at historic lows.
It’s still a great time to take advantage of the historically low interest rates, and you can put down as little as 3.5% to 5% on many loan programs.


Tax advantages of owning a home.
Whether you’re a first time home buyer, a buyer moving up or one moving down, you may qualify for a tax break every year. Interest paid on your primary residence mortgage, (up to the home’s value), and property taxes are typically deductable.

Another great thing is that for most homeowners, there’s no capital gains tax when their primary residence is sold.


Inventory of REO properties.
These are also called Real Estate Owned, Bank Owned, Lender Mediated or Lender Owned properties, and appeal to bargain hunters who have a lot of patience!

Inventory down and prices going up in Orange County

Inventory of homes in Orange County did it's seasonal dip the past few months, and if past years' trends are anything to go by, more & more homes will be hitting the market from now until the summer.

This chart shows inventory of Single Family homes over $500K in the county, since June last year.


Nice to see that the prices have been rising the past few months! Look at this chart, also of Single Family homes over $500K in the the good ol' OC!



From $480 per square foot in September, average prices rose, rose, and rose again to $554 in December. Does this mean that a 2,000 square foot home would have fetched $960,000 in September, and $1,108,000 three months later?

Well, numbers don't lie, or do they?

Prices vary from city to city, and even from tract to tract.

Interested in seeing how much your home might sell for, or looking for some tips on timing? Let's talk!