Real Estate and Real Life in the Wine Country

Have you read a California purchase agreement lately? Probably not, come to think of it, when a home owner decides to sell his house, part of the homework might be to ask your realtor for a sample contract, just to familiarize your self with the important stuff. Buyers should do the same. This agreement is a legally binding agreement once signed but all parties involved.

About 99% of buyers will make an offer with what we call contingencies… what was that? Yes, I call it the ‘buts’. I’d like to buy the house but: I need a mortgage and the house needs to qualify, I want to make sure the house doesn’t have serious flaws, I want to make sure I really want to live in that neighborhood, I want to….

The list if reasons can be different for everyone. Some of you might say, wait a second, you cannot have an endless list of ‘buts’. Basically the main ones are: Financing, Inspections and Title.

Financing: the house needs to appraise and the bank needs to agree.

Inspections: buyer can do any and all inspection as to satisfy himself as to the condition of the property. This covers a wide range if subjects, even the neighborhood is involved. That’s why the list is endless: depending on property and buyer. Everyone has different priorities.

Title: once the escrow is opened,  the title company provides a preliminary title report, stating the legal owners, the liens against the property, the easements etc etc. A problem with title can severely delay the sales process.

In our area, in general,  the contingency period is 17 days. This period gives a buyer the time to have all ‘contingencies’ taken care of. Should something seriously pop up you can either ask for an extension to do more inspections, ask for money to remedy the problem, sign of on the contingencies and move forward with the sale or decide that this is not your house and cancel the dale. You can say, when inspection period is up you have to really decide (what is that expression again?).

There is a lot more to say about the subject but this is the basics to remember about the ‘buts’.

Have a great Sunday!

Mirjam

Great news from the Sonoma County Permit & Resource Management department!

For a limited time, permits to legalize non-permitted construction will not be subject to civil penalties and investigative fees.

Projects eligible to participate are:

Residential buildings and accessory structures  •  Construction completed prior to July 13, 2010 • ‘Self-Disclosed” construction

Eligible permit applications must be received between August 1, 2010 and February 1, 2011.

Now is the time to safe money, permitted construction always results in higher value!

Mirjam

Today, nearly one out of 6  homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it’s important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.  

To find out whether you are eligible, check out the following link:http://hosted.cdpe.com/14365/Resources.aspx

Mirjam

Jamie Lee More wrote a great blog today. Should a home owner who is underwater on their house walk away/do a strategic foreclosure. This means a homeowners is able to keep up their payments however doesn’t want to because their house is worth less than what they own on it. Apparently it is becoming a trend, and interesting one.Interestingly historically homeowners who bought their house for say $150,000 and sold it 10 years later for $450,000 did not offer the bank to share that equity. Now because it is the other way around, all of a sudden the bank has to share a loss, not because homeowners need to sell but because they feel it wrong to live in a house that has lost so much value.I know the current mortgage crisis has many different faces. One would say that the value of a house only matters when you buy and when you sell. So bottomline this would mean that the value if a house while you live in it and are not planning to move is irrelevant.What do you think? Is walking away from a legally binding financial obligation the right thing to do?By the way,  home owners who are not able to make their mortgage payments and need to sell have great alternatives, HAMP, HARP, HAFA are options mentioned in the Making Home Affordable program. As CDPE certified Realtor I am also available to discuss your options.Don’t forget to smell the roses outside,Mirjam

Reporting from Washington - If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.

A great article in the Los Angeles Times: it is an easy to read outline of the new rules.

It is still a great time to buy but also a great time to sell with the tax credit for repeat home buyers. So you can sell your home and take advantage of the tax credit to buy your new home. The housing inventory in Sonoma County is so low, properties priced well sell fast and you are able to take advantage of the current market to move into your dream house.

  Mirjam

I am copying a posting from Kevin deBoer from 3 Oceans Real Estate. The link didn’t work but the info is interesting:

We are continuing to see the benefits of the current government programs to spur home sales across the country. Recent news that the $729,750 limit on conforming loans in our area has been extended into 2010, and that the government will continue to buy loans into 2010 have both contributed to increased sales and consumer confidence in our area, which means more buyers and sales. buyers+sales = Happy Realtors!

Even with those two incentives in place, there are some would-be-home-buyers that are still sitting on the fence. Here are two additional data points of interest:

Today the 10 year Treasury yield is at 3.2%. This indicator corresponds to mortgage rates – typically when it’s down, mortgage rates are down. Throughout this year rates have remained at historical lows; the average 10 Year Treasury yield for the last 12 months was 3.17%. However, the average yield over the last 10 years was 4.50%. In fact, from April 1953 to December 2008 the average annual yield for the 10 year Treasury was 6.36%. The highest rate during that 55 year period was 15.32%; the lowest rate was 2.29%. The high was attained in September of 1981. The low was achieved in April of 1954.

Translation: Evidence shows the 10 year Treasury yield and conforming mortgage rates are at historic lows; it’s unlikely they’ll continue in this range throughout 2010. How often does a 55 year interest rate low occur? About every 55 years!
According to the National Association of Realtors®, last month showed another big gain in existing-home sales, while inventories continue to decline.

Translation: the competition is getting tougher.

So, let’s see if all this “once in a lifetime” economic data, low interest rates, low prices, etc. are the bottom, or just the middle of the “double-dip recession” that the pessimists are talking about.

Mirjam

Just wanted to share this information… great info for buyers!

Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes owned by Fannie and Freddie.  Home buyers have until Oct. 30 to apply for Freddie Mac’s SmartBuy program, which started in July, and offers up to 3.5 percent of a home’s sale price to help cover closing costs.

To qualify, the home must be a principal residence and must be selected from Freddie Mac’s HomeSteps Web site (www.homesteps.com/homeshoppers.htm) for its foreclosed properties. Loans must close by year’s end.  The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, and air-conditioning and heating systems.

Fannie Mae’s HomePath program (www.homepath.com) is an ongoing program and offers more incentives than Freddie Mac’s.  Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent.  The buyers do not have to secure private mortgage insurance, a common practice with nearly all lenders.  Home buyers also can negotiate for Fannie Mae to offer closing-cost assistance.  Unlike Freddie Mac’s program, Fannie’s assistance level is not capped.  Under the HomePath program, the average participating homeowner has received payments equivalent to 3.75 percent of the loan’s value.

The homepath program is also a good option for investors to consider.No matter what the media tells us, today is a great time to buy property in Sonoma County!

This came in my email news feed today:

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

The State Bar of California has recently launched numerous investigations against attorneys for misconduct related to loan modifications.  In a rare move, the State Bar has released the names of 16 attorneys under investigation, by opting to waive investigation confidentiality in favor of public protection.  These attorneys have allegedly taken fees for promised services, but failed to perform those services or even communicate with their clients who face the possible loss of their homes.  Their non-attorney staff may also be under investigation for unlawfully practicing law.

Not all attorneys engaged in loan modifications are unscrupulous.  However, this announcement from the State Bar serves as a good reminder for REALTORS® and their clients to be careful when dealing with attorneys and others for loan modifications.  Scam artists may intentionally associate or affiliate themselves with attorneys in an attempt to lend credence to their fraudulent schemes.  The list of attorneys currently under investigation is available at http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395.

Your Realtor will be a great source of information and help to look at your options. Recently I finished the CPDE training: a training for Realtors to help distressed homeowners with options to avoid foreclosure. Foreclosure has serious consequences and for some it might mean not only loosing a home but also loosing a job… There are many options out there, contact your Realtor for help.

  Have a great day!

Mirjam

Yesterday we received a ‘Red Alert’ email from our local MLS board about the Rental Scam on Listed properties. The PressDemocrat had an interesting article about the subject earlier this week.

There is a rental scam taking place in which listed properties are advertised on Craigslist and other online classified services for rent, when the property is not for rent at all.  The ads run for a very brief period of time.

 How can you protect your listings from being a part of the scam?
Some brokers have removed the address of their listings on the internet.  While this hides the address from the scammers, both the buying public and the seller could be disadvantaged.
Monitor classified advertising internet sites like Craigslist to watch for ads using your listing information “for rent”.
Put a “NOT FOR RENT” rider on your signs.

The FBI’s guidelines for the general public to avoid being victimized.

• Only deal with landlords or renters who are local.
• Be suspicious if you’re asked to only use a wire transfer service.
• Beware of e-mail correspondence from the “landlord” that’s written in poor or broken English.
• Research the average rental rates in that area and be suspicious if the rate is significantly lower.
• Don’t give out personal information, like social security, bank account, or credit card numbers.

Should you have your property listed, please follow the advise your Realtor gives you. He/She is made aware of the problem and knows how to handle this. So far we do not know of people being victimized in Sonoma County and right now it is a major nuisance.

Enjoy the rest of this wonderful weekend, it’s a bit breezy still sunny and warm.

  Mirjam

In talking to people I have come to realize that some people have an interesting view on banks. You might blame the bank for offering you the ‘bad’ loan, however you might ask yourself: who ultimately signed? Also, banks are not social security, they have obligations to their share holders. I know, some ‘not so smart’ decision in life have dire consequences ;-(

One of the statistics I recently received from Bank of America was that 80% of all the loan modifications they did was in default again within 8 months. That is a poor success rate considering the time and effort put into this.

So when looking at you situation, figuring out what to do, ask for a loan modification, do a short sale (talk to your CPA when considering this), or wait for the foreclosure (might, depending on your job, cost you your job too), think what you would do with yourself should you be the bank.

When pursuing a loan modification think about this: if I were the final decision maker who was held accountable for my decision, would I offer myself a loan modification? If yes, it’s worth pursuing the loan modification.

Last week I had an interesting conversation with Darren Seliga from Seliga Financial, he mentioned some really good ideas to come up with when talking to the bank.

Any loan modification is hard work, doesn’t come easy but if it keeps you in your house and the result is a good mortgage, it’s worth it.

Oh…. and don’t forget the beautiful weather outside, enjoy it, despite all the hardships, it’s only money, spending time with friends and family that’s what’s really important. Don’t let your money worries keep you from being and enjoying time with your spouse, kids, friends, name it.

Have a wonderful day!

  Mirjam