Every real estate market, no matter the time or place, is bound to be influenced in some way or another by "distressed" properties. In a "healthy" market, anywhere from 1-3% of the homes are generally distressed sales.
So what qualifies as a distressed sale? A distressed property will fit into at least one of these four categories:
Property that is in poor condition
Property that is or will soon be in the foreclosure process
Property owned by someone who is experiencing financial problems
Property on which the mortgage and lien amounts exceed the value of the property AND an owner must sell.
Well, if you've driven around the San Diego area, you will notice some neighborhoods with obscene amounts of homes for sale (i.e. it seems like every other home on the street has a "For Sale" sign in front), while other neighborhoods have been minimally affected by housing market.
I spoke with an agent from Seattle the other day, who informed me that there were a few short sales and foreclosures, but that those prices did not detract much from the "normal sales." Well, here in Chula Vista, the distressed properties comprise 90% or more of the properties on the market in Chula Vista!
This results in more poorly-maintained properties, more neighborhood eyesores, potential safety problems with vacant homes, disgruntled neighbors, an overall bad vibe in the area, the list could go on. Also important to mention, is the fact that condo associations could lose their ability to have VA and FHA loans written on purchases in their complexes, resulting in a downward spiral of decreased demand, increasing inventory and plummeting property values.
Another important point, is that homeowners who are not paying their mortgage, are probably not paying their property taxes either. This results in lower revenues for the municipalities in which the people reside, throwing off revenues received and creating problems with local, county and state budgets. This can affect everyone.
Despite egregiously high levels of taxpayer dollars, we have not yet seen a major shift in the way banks are handling the hundreds of thousands of impending foreclosure properties. Without a major change in protocol, it is likely that we will continue to see housing prices decline despite low inventories of homes and large numbers of buyers.
As a Certified Distressed Property Expert, I ensure that homeowners who are trying to short sale their property are successful. Foreclosure carries with it many unforeseen problems. The truth is, with the right representation, homeowners who have a legitimate reason for short selling their homes should be able to avoid foreclosure. This will help to keep our friends, our family and ourselves, happier and better able to cope with the other "issues" that life brings.
When it comes to great loan ooprtunites, VA definitely seems to be the way to go for anyone who qualifies. Well, just when I thought it couldn't get any better, it did! VA loan limits have now increased to $625,500 effective now!
Here are just a few reasons why buyers choose to go VA:
Generous loan limits (now $625,500)
Zero-down loan options
No private mortgage insurance payments (a BIG savings!)
Fixed and Adjustable rate programs availalbe
Flexible income, employment and savings requirements
And just in case you are curious about monthly payments, here are a few purchase scenarios to whet your appetite! (payments are principal & interest based on interest rate of 5.25%)
$200,000 purchase, 0-down, for only $1104/month!
$300,000 purchase, 0-down, for only $1657/month!
$400,000 purchase, 0-down, for only $2209/month!
Now is an amazing time to buy, so be sure to call or email me right away for the best information on your next dream home!
Search the enitre MLS and get real-time foreclosure property information at http://www.HottestHomeBuys.com
When it comes to great loan ooprtunites, VA definitely seems to be the way to go for anyone who qualifies. Well, just when I thought it couldn't get any better, it did! VA loan limits have now increased to $625,500 effective now!
Here are just a few reasons why buyers choose to go VA:
Generous loan limits (now $625,500)
Zero-down loan options
No private mortgage insurance payments (a BIG savings!)
Fixed and Adjustable rate programs availalbe
Flexible income, employment and savings requirements
And just in case you are curious about monthly payments, here are a few purchase scenarios to whet your appetite! (payments are principal & interest based on current rate of 5.25%)
$200,000 purchase, 0-down, for only $1104/month!
$300,000 purchase, 0-down, for only $1657/month!
$400,000 purchase, 0-down, for only $2209/month!
Now is an amazing time to buy, so be sure to call or email me right away for the best information on your next dream home!
Good news for first-time home buyers that are looking at new homes in California!
As many people are now aware, there is an $8,000 tax credit for first time buyers, thanks to the "stimulus" package that was recently signed.
In addition to this however, the state of California is also offering a $10,000 tax credit to people buying new construction homes. There is a healthy amount of paperwork to fill out, and "standard operating procedures" have yet to be established, so the best bet is to apply early before the money runs out.
The state has a budget of $100 million for this tax credit.
Like a proverbial yo-yo, the FHA loan limits have once again changed direction.
The National Association of Realtors has been working in Washington DC to help the Federal Government structure the American Recovery and Reinvestment Act of 2009.
As a result of its passage, today HUD published changes to FHA's single family loan limits.
The new FHA loan limit for sinlge-family homes in San Diego County is $697,500.
Download a pdf document with the San Diego limits here: Limits
Since the foreclosure market tends to drive the current housing market here in San Diego and Chula Vista, accurate information is key to udnerstanding what to expect in the coming months.
Here are some of the key facts that I noticed in a recent report by Foreclosure Radar- a wonderful service to anyone looking into the foreclosure and pre-foreclosure market- (click here for instant Foreclosure Radar access).
- From December '08 to January '09, Wells Fargo, (which recently purchased Wachovia) saw NOD fillings decrease 46% while JP Morgan/Chase/Washington Mututal saw declines at 49% for the same period.
- Juxtaposed to that, Bank of America/Countrywide saw filings increase 281%, still lower though, than the record numbers set in the second quarter of 2008.
- Overall, Notice of Default filings were down 11.8% from December '08 to January '09, with an average daily decrease of about 3% (figuring that January had 2 fewer filing days than December).
- There were 22,328 Notices of Trustees Sales filed in January, a decrease of 8.3% from December, and a 4.5% decrease from filings in Janaury 2008.
- There were 15,314 properties sold at auction representing about $6.8 billion in loan value.
- Just over 94% of these properties were sold back to the bank at auction.
Okay, so the market here in San diego, specifically Chula Vista and Bonita, is absolutely cranking! Two-thirds of the inventory are short sale properties, but the stuff that is selling is selling fast, above list price, and with multiple offers.
There is nothing more heartbreaking (or maybe there is, just not in real estate) than finding the perfect home, falling in love with it, only to lose it to another buyer.
So what can you do to maximize your chance of getting the accepted offer? These really are strategies, some are just common snese, but I call them "secrets" because not many people seem to be following them. And they have a lot of rejected offers.
1. KNOW the market inside-out and backwards! You MUST know what the home is actually worth, not acording to Zillow, not according to list price, not according to your gut instinct. Hard, raw data must dictate the reason. No excuses.
2. Offer a REASONABLE price. Otherwise you are wasting time and paper. Let me share a secret with you- listing agents oftentimes list properties for LESS THAN IT WILL SELL FOR ON PURPOSE! With short sale properties, it is usually because the banks need an offer to get the paperowrk going. With foreclosures, this tactic is used to incite an auction-type environment where only the "highest and best" offers are looked at. You will not get a second chance at the offer.
3. Shorten the "contingency periods" from 17 days down to 7 or 10. REO agents love to see buyers who are willing to make everything happen right away and if it is going to fall apart, they want toknow now so they don't waste time.
4. Don't bother asking for the seller to include a home warranty, termite repairs, property repairs, etc. The home is sold as-is. Asking for any of those will kill the deal. You, as the buyer, may do all of that at your expense.
5. If you are using a VA or FHA laon, and the property is in a condominium complex, check ahead of time, and know with CERTAINTY that the complex is approved for VA or FHA lending. Many are not, and many are losing their eligibility due to rising foreclosure rates and insolvency in the HOAs.
6. BE PRE-APPROVED! You must have a letter in hand from a direct-lender (not a mortgage broker) that you are approved for at least the amount of your offer and that the only stipulations needed to draw loan docs are the property address and final sales price.
7. BE PREPARED TO ACT. When the property appears onthe market, you must act right away. You don't have time to get the pre-approval.
8. DO NOT WAIT! The good properties (and many of the not-so-good properties) will have multiple offers in the first week. If the seller is motivated, they may have a verbal acceptance in the first 24 hours.
9. INCLUDE with your offer AND pre-approval letter, proof of down-payment funds, not just the deposit check, along with copies of your credit scores.
Let's face it, with all of the properties going into escrow every day with multiple offers, you need to do everything possible to make sure that your offer ends up on the top of the pile. Anything other than the top doesn't get you into the home of your dreams!
Please feel free to call, email, comment on any of these items.
Now I admit it, I am completely new to the world of school-sponsored fundraisers. My first child just made it to the rank of Kindergartener this last July. We are both learning a lot about schooling.
Having minimal running experience (Coronado 15k) I may be a little naive, but this looks to be a greta event for a great cause. I look forward to being a proud sponsor and hope that all parents will encourage their children to get out, get some exercise, and show some Mountian Lion Team Spirit!
I really enjoyed this blog post from a few days ago. Jennifer Lee in Boca Raton, although 3000 miles away, really has some great ideas.
Please do not take this next comment to be insensitive to those who have lost jobs, homes, etc.
My favorite- look at paragraph 5- what about a tax credit to those who ride out this storm without losing their property?
Maybe there needs to be limitations based on income, but come on, let's give some incentive to people who sacrifice to keep this economy stronger. I have heard too many stories of people buying a larger home, moving out, and then purposely letting the existing home go to foreclosure. It's not because they can't afford it, but because they don't WANT to pay. Shame on them! This puts a huge burden on everyone that has integrity and is trying to play by the rules.
Again, I know that there are plenty of people, if not the majority of those who have lost homes, that tried to do the right thing, who sacrificed everything to try and keep their home and my heart goes out to everyone in that situation.
But perhaps, if we entice people to do the right thing, even though the motive migth not be a pure one, we ge the right thing done.
I like the idea of a 10% tax credit up to $15K for the purchase of property, but I believe it should be extended to all buyers, including investors and non-first-timers. I also think it should 15% to $22,500 for cash buyers. That will create more of an incentive for all and encourage buyers that won't strain the lending system.
I like the idea of 4% interest rates, but again I believe discounts should be available to all buyers as there are many potential buyers that are not first-timers and we need them too.
I think the period for these incentives should be shortened to 4 months. That will cost less money and create more immediate activity. When department stores have sales they have them for ONE weekend or ONE week, not extended periods, to get buyers to act NOW. Housing takes longer to find, pick, finance and close, but a 12 month period is too long. It can always be extended if needed, but human nature is to wait until the last minute, so a shorter period will get people to act NOW.
In addition, I think there should be a tax credit in 2010 for all who ride out the storm in good standing. The people taking second jobs, cutting out their cable, selling their cars, etc, to pay their mortgages as agreed should be rewarded too. If you do the right thing and hang on to you property, you should get rewarded as that is good for the housing situation too. If we shorten the incentive periods, money should be available for those who do the right thing to receive a credit in the future too.
I think there should be a tax credit available to any business start-up within the last 6 months or next 6 months, as those businesses will create more jobs further helping the overall situation. Those business owners are part of the solution and are showing faith and should be rewarded for such. More businesses will be encouraged to open with tax credits aimed at such and the businesses opened within the past 6 months will be aided in their growth. Big companies have bailed out, why not help the small ones get going? These will produce jobs that will help people keep their homes or buy new homes.
Lastly, I would like to see a government guarantee program set up for condominium loans. The government insures FHA, VA, SBA and could just as easily back condominium loans. That would make them much easier to sell by re-opening closed financing channels.
Those are my 2 cents. If you agree with ANY of them or have any of your own, please email your representatives ASAP and encourage them to do something NOW. We need a package aimed at housing, not pork. Email your representative before it's too late. A true targeted focus on housing will change the whole economy. Don't wait for your neighbor to do it. Take action yourself! If we band together and insist on change, we are more likely to get a package that works.
PLEASE TAKE THE TIME TO SPEAK OUT! Cut and paste any part you agree with or send your own suggestions to your officials!
I found this interesting article today and thought that everyone should know about it. I think it will come as quite a shock when peole start looking at their FICO scores this year, especially borrowers whose lowered scores may wreak havoc on their ability to obtain loans.
FAIR ISAAC is changing the playing field again, implementing it's latest version of credit scoring FICO 2008. And it doesn't appear that the change will be leveling it. The three major credit reporting agencies will be rolling out the new scoring system this year, with Transunion deploying it in January, Equifax in late spring and Experian at some later date.
The new FICO is touted to better predict the likelihood of a default on the part of the borrower. However, many of the changes appear to be designed to lower credit scores. FICO 2008 will place more emphasis on available credit, not just balances. So, even if you are not carrying a balance, if your credit line is reduced, your FICO score could be lowered. It appears, under the new scoring system, the more available credit you have, the better your score would be. (I remember having been rejected for an airline credit card in the early 90's because I had too much available credit even though most of it was unused). You will also have your credit score reduced by having only a few open and active credit accounts.
Supposedly, there are three changes that will benefit credit consumers.
It will ignore debts gone into collection if original debt is less than $100
It will not punish single credit set-backs, such as write offs or repossessions as long as all other accounts are in good standing
It will continue to use some "authorized-user" information (although this is only a change from the fact that they were going to discard it entirely).
What will this do to the real estate and mortgage industry? I don't see anything good, at least for the first few months of implementation, especially since at any one time the credit agencies may be using different versions of FICO. That can only lead to confusion. Perhaps, in the long run it will lead to fewer defaults, but until it has rolled out completely, the only change that I can see is some tightening.
Personally, I know that my current FICO score is around 800. I am expecting it to drop just since I am using my cards less and my only installment loan will be paid off in April.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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