'Your Questions Answered!' Category
Is It Available or Not!?
January 31st, 2010 categories: First Time Home Buyer Info, Your Questions Answered!
The Term “Active Short Sale Cont.”
There is some confusion in the market today with a relatively new term that relates to the market status of a home called “active short sale cont.”
Short sales are new for our market. They have only been around in abundance for the last year and a half in this cycle and most buyers, first timers especially, aren’t familiar with the term. It appears that the home is available because the word “active” is there but this is misleading.
In the process of a short sale, the seller/borrower must produce financial documents showing that there is a legitimate need to sell for less that what is owed on the home. The lender doesn’t want to take a loss and won’t approve the short sale without good reason to do so.
Currently, this process takes forever due to the volume of short sales happening nationwide. Our economy and value losses in our region have taken their toll and some can no longer afford to stay in their homes.
Waiting On Lender Approval
After the seller/borrower of the home to be sold short has gathered together all of the financial information they 
need to submit to the lender, the listing agent packages those documents along with the listing agreement and the highest and best offer and sends it to the lender for their approval.
This is when the property goes into the status “active short sale cont.”.
Listing agents tend to submit only one offer to the lender so that the financial package is streamlined and efficient in the hope of getting a speedy approval.
This rarely happens as the volume of files the lender is receiving requesting a short sale is just more than their loss mitigation departments can handle.
And More Waiting
After the package is submitted, the waiting game begins…and goes on and on and on.
While the short sales process has gotten quicker, in the Rocklin and Roseville real estate markets, the average days on the market for a short sale is 169 days. This is the average amount of time it takes for a short sale to go into “pending” status.
Then add 30 to 45 days in escrow and the average time for a home to be sold short in Rocklin and Roseville since August 1st of 2009 is roughly 209 days!
Sweet!
The days on market time stops when a home goes pending sale.
“Pending” status in a short sale is when the package has been approved by the lender and the offer has been accepted…if the buyer is still around to close!
Often, the original buyer disappears long before the short sale approval ever happens and then the seller/borrower starts over with a new buyer. The process just takes too long.
With the new buyer, time frames are shortened as the short sale has already been approved and it’s then a matter of submitting a new offer and getting lender approval.
“Buyer disappeared, need offers!” is a common comment in the confidential agent remarks in the MLS.
All in all, and I’ve said this before far too many times, there is nothing short about a short sale. If you’re in a hurry trying to take advantage of the first time home buyer tax credit..you won’t have enough time to get it closed before the expiration date.
Have questions? Please feel free to call or email.
Thanks for visiting!
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How To Get Your Offer Accepted!
November 12th, 2009 categories: First Time Home Buyer Info, Your Questions Answered!
Results of Sold Homes Survey in North Natomas
I’ve got a buyer who I just love working with. As much as I like he and his girlfriend, they are 
depending on me to get them into a home for the holidays.
This used to be a pretty easy task. You find a home, write an offer that’s attractive to the seller and off you go to escrow.
Now, not so much!
Dramatically Low Inventory Levels
As the foreclosure crisis churns on and banks are releasing fewer of the foreclosures to the open market for whatever the reason, the number of available homes for sale has decreased dramatically in the last year.
This has created a fiercely competitive market for buyers and sellers are, again, enjoying getting their listing prices as high as appraisers will allow them to go due to multiple offers on almost every home.
Days on market, depending on the area and price range, has declined as well.
The declining amount of homes for sale is why you’re currently having trouble getting your offer accepted.
Agents are communicating with each other only to the extent of “give us your highest and best”.
Beyond that, mum’s the word. As a result, it then becomes a mystery has to how to structure an offer that gets accepted.
Until now!
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Your Questions Answered!
October 14th, 2009 categories: Your Questions Answered!
“Has the market cooled at all with the Nov. first time home buyer money coming to an end? Is it a waste of time to offer less?”
I got these questions today and I thought they were great ones to address because in 45 days or so the first time home buyer tax credit may come to an end.
No, the market hasn’t cooled because the number of homes for sale has decreased dramatically. There are multiple offers everywhere, prices have increased a bit due to the competition for homes and the title companies are seeing short sales closing a little faster as well as an increase in regular real estate transactions. (between willing buyer and seller, like it used to be!)
Should you offer less?
Only on properties that have been on the market for extended periods of time. This applies to homes in higher price ranges that are taking longer to sell. Everything below $300K or so is flying off the shelf, so to speak.
First Time Home Buyer Tax Credit Extension
Based on my research, I have a feeling the tax credit will be extended. There is so much support for the first time home buyer tax credit as it has added 400,000 additional sales this year and could add up to another 1.86 million sales* in 2010 if it was extended for one more year.
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Your Questions Answered!
October 9th, 2009 categories: Your Questions Answered!
“Are lenders making loans on lower priced homes?”
I got this question from Debbie in Cameron Park this week and I thought it was a great question. My initial reaction is that I didn’t see why lenders wouldn’t make loans on these lower amounts.
I called my friend Tim Clark at Capitol Mortgage and my friend at Masters Team Mortgage, Stephen Hart. They both have closed loans in the lower price ranges within the last two weeks. Tim closed a $49,000 note and Stephen a $79,000 note.
So yes, it was confirmed through my favorite lenders, loans are being made on lower loan amounts.
“Are lenders modifying loans?”
Because I’ve done articles on loan modification success stories, I get calls every so often regarding whether or not I coordinate loan modifications between borrowers and lenders. I do not help with the loan modification process but because I get questions, I called Hope for Homeowners.org to find some answers. Here is what I’ve been told:
1) If you’re not currently behind on your mortgage, your lender, generally, will not consider you for a loan modification. I know this doesn’t seem to make sense but this is what I’ve been told.
2) Lenders are not modifying principal 
loan amounts. They are adjusting interest rates and restructuring loans but, from what I’ve been told, getting a principal loan amount reduction is rare.
My view is that this is the only valid modification tool.
3) If you don’t have the income to sustain your restructured payment, they lender won’t grant the modification.
4) The goal of the lender is to get your payment to 31% of your gross income.
5) “Strategic defaults” are beginning to increase nationwide. A strategic default means the homeowner is so far underwater that they don’t see their value coming back and just walk away from their homes regardless of their ability to make their payment. I’ve been hearing stories of this happening throughout the Sacramento region from many different sources.
6) 50% or more of restructured loans are re-defaulting within the first year of the modification.
7) Don’t call a third party to help with a loan modification until you talk to Hope for Homeowners.org. Although most of the shady loan modification scams have been shut down, they are still some out there. Help for Homeowners.org is free and is working directly with the lenders to modify loans.
Loan modifications are happening throughout the nation and it is possible to get one. However, with perhaps as high as 45% of homeowners underwater in California (and getting worse), without a principal loan amount reduction most loan modification efforts will not be long term solutions.
Of the 500,000 homeowners that have been given trial loan modifications under the “Home Affordable Modification Program” only 5, yes just 5, have been given principal loan amount reductions.
Please call me if you have any questions you’d like answered.
Thanks for visiting!
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“Do I Need A Realtor To Buy A New Home?”
July 21st, 2009 categories: Your Questions Answered!
Your Questions Answered!
When I check my statistics, “do I need a Realtor to buy a new home?” is one of the most prominent search terms that people find me for. I wrote an article in September about this very topic but I thought I’d cover it again as it is an important question.
The answer boils down to one of trust. Who can you trust to ensure you get the best representation and the best deal possible on your new home?
This question is easy to answer and I will explain why it’s important. Right now, it’s easier to get a good deal in new homes than in resale homes.
Who Represents Who
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“REO? Foreclosure? They’re The Same, Right?”
May 15th, 2009 categories: Local Real Estate Info, Market Commentary, Sacramento Foreclosure Statistics, Your Questions Answered!
Well, No They Aren’t!
As I’ve said before, I get many real estate related questions every week from people who are trying to 
sort out this market. Admittedly, it’s a very complex thing. Some markets are harder than others especially when you’re dealing with financial institutions.
Just a few short years ago, no one was worried about foreclosure, short sales, declining values or losing their incomes. The market was good, property was appreciating and everything looked very rosy. As Paul Harvey used to say, “now you (we) know the REST of the story”.
Things will get better, they always do. It’s the natural ebb and flow of life. I hope it happens sooner than later.
What’s a Foreclosure?
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Your Questions Answered!
May 12th, 2009 categories: Local Real Estate Info, Your Questions Answered!
I get questions from clients and potential clients all the time. That is one of the great things about having a blog; it’s a very interactive platform. Much more helpful than the newsletters I used to do and a lot more fun!
I’ve created a new category called “Your Questions Answered” where I’ll be giving my opinion based on my experience in the real estate industry. I hope you find it helpful.
The question in this post is concerning short sales. As the REO/foreclosure inventory begins to decline, the short sale inventory will begin to increase or seem to at least due to the absence of foreclosed homes to purchase. (Don’t infer that the foreclosures are going away. Let’s just call it a “stay of execution”! 
)
“What’s the length of time a bank will respond on a short sale?”
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