Everyone who has written an offer on a foreclosure property knows that when the offer is accepted, it isn't accepted using the California Residential Purchase Agreement but is accepted using the bank's contract.  Why does that matter?  The bank's contract is written by the bank's attorneys for the bank's best interests.  Many rights afforded buyers on the California Residential Purchase Agreement are specifically excluded.

The new California law "Buyer's Choice Act", which went into effect on October 11, 2009, returns one right to buyers.  The Buyer's Choice Act prohibits foreclosure sellers from requiring, either directly or indirectly, that the buyer purchase title insurance or escrow services from a particular title insurer or escrow agent as a condition of selling the property.

The law does not stop a buyer from agreeing to accept a title insurer or escrow agent recommended by the seller -- if written notice of the buyer's right to make an independent selection is first provided by the seller to the buyer.

A "seller" subject to this law can be a financial institution or and individual lender who foreclosed and acquired title to residential 1 - 4 unit property at the foreclosure sale.  This law applies only to such sellers and their agents.

This law will remain in effect until January 1, 2015.

NACA Save The Dream is hosting a Note Modification event in the Craneway Pavillion, Richmond from October 16 - 20.

This event is structured to try and assist homeowner's attain a Note Modification.  It starts with an orientation for 500 homeowners at a time.  The homeowners bring their financial and hardship documentation, meet with individual NACA counselors who determine the payment the homeowner can afford, scan the documentation and submit it to the mortgage servicer.  The homeowner then goes to meet with their servicer who is right next to the counseling area.  In some cases, the homeowners receive their note modification on the same day. Read the entire article.

The documentation typically required to consider a Note Modification is:

- Copies of all paystubs for the most recent two (2) months

- Copies of the last two (2) months statements - all pages - for checking, savings, investment and retirement accounts, as applicable

- Copies of your Federal Tax Returns for the last two (2) years, including W-2's.  If you are self-employed, copies of your business tax returns will also be required plus a year-to-date Profit & Loss statement

- Completed Financial Statement reflecting all income, assets and liabilities

- A Hardship letter

Placing your house for sale and having it fail to sell may leave you feeling discouraged or frustrated.  If you are committed to moving on with your life, your first experience may be nothing more than a speed bump.

Free Report:  When Good Homes Fail to Sell

This 19 page report covers:
- 5 Basic Reasons Homes Fail to Sell
- Understanding Fair Market Value and List Price
- External Influences on Fair Market Value
- Conditioned to Sell
- Market Price is a Buyer Magnet
- Buyer Viewings in Relation to Price
- Real Estate Marketing
- What Went Wrong? Look for Clues

You have the opportunity to change the game plan, break the status quo and start out with a clean slate.  Download my free report When Good Homes Fail to Sell.

I recently received a phone call from a frustrated mortgage lender.  She has a significant backlog of pre-approved FHA first-time buyers that can't find homes that will accept FHA financing - and the deadline for the First Time Home Buyer Tax Credit is looming.  She asked, "What's going on?"

In order to answer her question, I pulled the Active single family home listings in the $275k - $350k price range ("starter" homes in our Northern California market area) in the three cities with the most homes in this price range.  The results shocked me. 

Of the 43 active listings:

NO FHA

• 11 are short-sales, of which only 6 will accept FHA financing.  Given the 3-4 month average timeframe for a short-sale decision, an offer written on these homes will not be approved and closed by the Tax Credit deadline.
• 3 are cash-only REOs.  The properties won't qualify for any financing.
• 15 are REOs that will not accept FHA financing.
• 12 are "normal" sales that will not accept FHA financing
  

FHA OK

• 2 are "normal" sales that will accept FHA financing - a miserable 7% of the possible listings (excluding short-sales and cash-only REOs).

Is it possible that the 27 "no FHA" homes have such significant pest, health and safety issues that FHA financing would kill the deal?  No.  Does Conventional 10% down financing overlook all pest, health and safety issues? No.

Does the FHA financing exclusion serve the sellers?  No.

Less than 5% of first-time buyers have the funds necessary for a 10% down payment ($27,500 - $35,000) plus loan costs.  Limiting the financing to Conventional decreases the potential pool of buyers to 5% of the first-time buyers and bargain-hunting investors.

Let me play devil's advocate for a moment.  Let's assume that an FHA Offer will cost the seller $5,000 in pest, health and safety repairs, but in exchange for that cost the pool of potential buyers will increase by 95%.  This isn't a marginal increase in potential buyers, this is a huge increase!  The potential cost will be offset by a higher net sales price.

I recognize that REO's are sold as-is.  That being said, am I the only person who knows about the FHA 203(k) Rehabilitation loan that doesn't require any repairs prior to closing?


FHA Fix and Flip 90 Day Rule

Many of the homes in the best condition are investor fix and flips.  Unfortunately, FHA will not provide financing on these properties until they have been owned by the investor for 90 days.  These investors are extremely savvy.  They purchase structurally sound homes that are a cosmetic mess.  They fix holes in the walls, paint, put in new flooring, update the kitchens, add granite counters and new appliances.  They are, for the most part, beautiful and turn-key ready for the market in 30 - 45 days.  They are sold and closed by the time an FHA buyer is allowed to write an offer.

The 90 Day rule serves who?  Protects who?

Are you facing the same issues in your markets?

Fishing requires just the right pole, the right weights, hooks, bait, bobbers, hook pullers and all sorts of nifty tools attached to your fishing vest (according to my husband). Once properly outfitted, you head off to find the best fishing spot (which requires an understanding fish psychology) and determine which combination of the toolkit items will get the fish to bite.

At the end of day 1, my well-outfitted husband returns without a single fish - and pissed.  He said, "I could SEE them! They were swimming around the boat and jumping out of the water but they refused to bite.  They were flipping me off with their fins!"  I then asked, "Did anyone else catch any fish?".  It was a dangerous question if they had, but it was an unsuccessful day for all.  They did, however, all establish a comfortable sense of comraderie regarding their combined lack of results.

My husband doesn't fail well.  He tossed and turned throughout the night thinking of strategies to out-smart those darn fish and woke up early the following morning to completely change all of the doo-dads on his fishing pole.  As he went out the door, he pronounced that he would not return without fish.

In the middle of the day, my curiosity got the best of me so I took a hike to find out if he was accomplishing his mission.  I arrived at his normal fishing spot - no husband.  I hiked around a bit and saw other fisherman in their boats, talking across the water about the lack of fish.  Still no sign of my husband. 

I hike back around the lake wondering where the ranger station is located in case I need them to find a lost husband when - lo and behold - there he is! 

No boat, standing in the water up to the top of his waders, no other fisherman within calling distance for moral support and a look of intense concentration on his face.   Dare I interrupt? 

At that moment he looks up, spots me, gets a smile on his face and lifts his string of fish out of the water. 

By the end of the day, he had his limit and was practically a fishing hero because most ended the day empty-handed.  Interestingly enough, the other fisherman didn't ask him how he chose his new fishing spot or what doo-dads he changed on his pole, they attributed his success to luck. Sound familiar?

A highly experienced associate of mine, Bill Leone, recently asked me to co-list a luxury view home on acreage with solar, septic, well (septic and well are uncommon in our area) and the plans and utilities are in place for a second home on the property. 

Honestly, the seller could not have picked a more qualified person than Bill to represent this unique property.  In addition to Bill's traditional real estate knowledge, he is a walking dictionary of all things pertaining to residential construction, land use issues and the permit process. 

When Bill came to me and requested that I co-list the property, my first reaction was, "Huh? Why?"  His response was interesting.  The property is both luxury and unique.  The "old school" marketing may not flush out the buyer for this property and he is too busy to upgrade his mental hard-drive and learn my internet marketing strategies from scratch.  In order to provide proper representation to this seller, both skill-sets are required. 

The short time we have worked together has been fascinating for me as I watch a knowledgeable 20 year veteran in action.  From the initial listing appointment to his Critical Path Marketing system, he has been an open book.  I have also learned how deep the average foundation pier is to bedrock for a hillside home, the clues that reflect construction quality, that a well must pump a minimum of 4 gallons per minute and that septic tanks can be constructed of different materials and not all are equal.

You won't find Bill Leone on LinkedIn, Facebook, Twitter, a blog or a social network (yet) - he is a successful, old school, referral kind of guy.  For my part, I can't wait to show him that the internet isn't difficult, doesn't cost a fortune, reaches local, national and international buyers and is a new venue for his current, successful strategies.

Facing an increasing number of Friend requests from business associates, I had to ask myself "Do I really want to blur the lines between personal and business to that extent?"  Do I want business associates to read my mother's comments about her second bout with Melanoma?  Do I want them to see my daughters' college pictures and comments? Do they  really care about my nieces and nephews in Minnesota?   The answer to my question was "No".

The good news is that Facebook has the answer to my dilemma - a Facebook Page.  A Facebook Page is basically the equivalent of a Facebook Profile for business.  Anything I post on my business Page forwards to my Friends' news feeds (rather than their Wall) but, more importantly, the items posted on my personal Wall don't forward to the Page.  Another nice feature of the Facebook Page is that I was also able to set up an auto-feed to Twitter so my posts get double exposure.

Learn about Facebook Pages.

When selling a house, it is important to understand that the market determines the sold price, not the real estate agent. 

Download the FREE REPORT:  Understanding Fair Market Value and List Price to learn the basics of real estate valuation and pricing.  This information will be invaluable when you interview real estate agents to sell your home and review their Competitive Market Analysis.