Pacita's Quick Bytes of Real Estate: October 2009

My first time home buyers are whooping it up. Why not? The popular first time home buyer tax credit that was set to expire end of November 2009 may be extended through end of June 2010.

I have buyers who have been looking for months but are getting outbid so many times, or are running out of time waiting for the short sale approval/acceptance of their offers.

Even better, it isn't just first time buyers who have reason to celebrate. A new tax credit was introduced to aid repeat buyers. I wonder if this will apply both for buyers who want to move up as well as buyers who want to downsize.

Although the complete details aren't available yet, here are the key provisions.

First time home buyer tax credit

• Buyers must be in contract by April 30, 2010
• Buyers have 60 days from that day to close escrow to qualify for the tax credit
• Tax credit is $8,000 or UP TO 10% of purchase price

Repeat buyers tax credit

• Defined as homeowners who have lived in their residence for five years
• Tax credit is $6,500

But wait, there's more! The levels for the home buyers were increased! Good news, indeed, for at least one of my buyers who was making more money than the previous qualifying level. So now, there's a chance that he will qualify for the tax credit after all!

• Individuals earning up to $125,000, up from $75,000 for individuals under the current law
• Couples earning up to $250,000, up from $150,000 under the current law'

More tax credits.

Additionally, there are other tax credits that the homeowners can explore. Although folks may argue that these tax credits are costing us....think of another way to look at these credits. They will encourage folks to BUY! And when they buy more goods and services, they (and we) do our share to stimulate the economy.

• federal tax credits for energy efficiency. Time to replace that old furnace? Want to get double pane windows? Need to get better insulation? Want to replace that leaky roof? Old water heater on its last legs? There's an energy-efficient solution to meet your requirements.
• ENERGY (Energy Efficiency & Renewable Energy) STAR appliances that may apply to central air conditions, washers, dishwashers, freezers, refrigerators, and more. More on this as things develop.

Have fun shopping!

Market observers think that the bottom of the market was three months ago. In Oakland CA, this may be the case.

GET THE PICTURE!

Months supply of inventory

Some seasoned real estate professionals and observers say that when the months inventory is less than six (6) months, it is a seller's market. In Oakland, that inventory is less than two months, and is the lowest it's been in two years. Are we there yet?

 

Median sold price

Astute investors always advise "Buy low, sell high." In Oakland,  for data on detached single family homes, the median price saw a drop of 69% from $616K in Sept 2007 to $191K in Sept 2009.

 

Supply and demand

Supply of homes for sale declined by 52% from Sept 2007 to Sept 2009, while the number of properties for sale showed an upward movement by 156% during the same period of time.

If buyers are waiting for the price to drop, they should keep a close look at the dwindling number of homes for sale compared to an increasing number of buyers. They may NOT see the price dropping much more than they have already since a sellers market may be emerging.

 

 

RANT! RANT! RANT!

As if researching suitable properties isn't enough of a challenge, now we have to deal with listing agents who don't bother posting at least one photo to show us what the property looks like.

While going through a list of properties using certain criteria, I identified 127 that may be suitable. But going through the list, I was dumbfounded at seeing that 30% of these listings do not have a single photo of the property.

And of the 38 that do not have pictures 31 of them were short sales.

SHORT SALE PROPERTY OWNERS ARE DISTRESSED!

For gosh sakes, when people are selling their homes as short sales, they are obviously in distress.  And what they need is for someone to write an offer so that the short sale negotiator can review the file and hopefully accept and approve the offer to prevent foreclosure or bankruptcy. Right?

SHORT SALE LISTING AGENTS: Are you doing everything you can to sell this property?

We know the importance of pictures, visual tours, staging, etc in marketing a property for sale.

But if the listing agent doesn't take a single picture of the property, how does that reflect on that agent's ability to market,  much less aggressively push the short sale process?

And agents, if you're not members of the local MLS where your listing appears, have you thought about either referring out the listing to someone who is, or get a reciprocal agreement so that your listing appears on the local MLS?

SHORT SALE LISTING SHOULD BE HANDLED AS DELICATELY AS A REGULAR LISTING

Yes, we know. It takes a lot of work and a long time to get a short sale approved and accepted, if a all. But these property owners entrusted us to help them sell their property to save them from a more financially disastrous situation.

If you can't give these folks the same care and respect as your regular listing, then for goodness sakes, don't take the listing.

Give it to someone who truly gives a damn!

RANT! RANT! RANT!

 

RELATED POSTS

Short Sale Listing gets multiple offers

Make sure your short sale package is complete before submitting to the short sale lender

The first lender, Countrywide, insisted on a short sale price of $625K, although the first loan with them is less, at $588K. Countrywide said that because of the missed payments, etc., the monies owed are now around $610K. HUH?

The second lender agreed to a payoff of only $9K. And usually, it's the second lender that gives us grief. Not this time.

And my poor co-Realtor, who has worked on this listing for months is puzzled. She received several offers on this property. All of them were in the $550-575K range. The sellers accepted the highest and best, and they even have someone in back-up.

The realtor provided detailed comps and market analysis to justify the $575K sales price and to challenge the BPO. But the Countrywide loan negotiator won't even present this information to their investors, and wlll not budge from the $625K.

The sellers feel like they have no choice but to let Countrywide foreclose. Or they may file for bankruptcy.

Has anyone run into this problem before? Are other lenders demanding the same thing?

 

 

Yes, it's not Friday yet, but I couldn't wait for Funny Fridays. I needed a good laugh, and researched a video that had me rolling on the floor laughing the first time I saw it.

Everyone has seen the laughing baby videos. But have your seen this one?

Hyuk! Hyuk! Hyuk!

To illustrate a point about the value of using a comparative market analysis by a REALTOR, I pulled up the information on two of the most popular places where people go. To say that the difference is startling would be an understatement!

This house in Los Angeles is owned by my client who is debating whether or not to sell the house to his relatives who are renting from him so that he can buy his own house here in Alameda.

To get the market value, I advised him to get a CMA from a REALTOR. But I had to show him what it would be like to get the estimates from two of the most popular sites.  And here's what we found.

CYBERHOMES

 

ZILLOW

WHAT A DIFFERENCE!

My client was amazed at the difference in the estimates. At least he now knows that going to either site isn't going to give him the information he needs to make an informed decision. Although these sites are sources of information, they are not or should not be THE best and only resource.

This was a fabulous way to make that point!

REFERRAL

And this was also a good time to let him know that as part of my service to him, I will find a REALTOR who can get him the information he needs. 

Since I am a member of several networks, one of which is Active Rain, I have already engaged a REALTOR who had sent me a referral earlier this year. YEY!

These are troubled times, true. But does that mean we will value our time any less?

When is a prospective buyer NOT a client?

SCENARIOS

• WE WANT TO SEE A PROPERTY NOW. Prospect calls at 1 pm, and want you to show a property in a few minutes because they're standing in front of a property they'd like to see it. 
  • You ask how they heard about it, and they say they received an email notice from another agent.
  • You ask why not have that agent show it to them. They say they don't have a relationship with that agent, and just gets these notices
  • You ask if they're pre-approved, they say yes. But hesitate when you ask by whom?
  • You tell them you're not available at this time, or that the property needs 24 hours notice. So you ask to call or email them to set up another time. They'll give you a phone number, but won't give the email. Or they'll give you an email, but not a phone number. Or they say they're only available today.

 

• WE WANT INFORMATION NOW. Prospect calls about a property and would like more information.
  • You ask the usual questions, including whether or not they'r working with an agent. They say yes, they have an agent, but he's out of town, or busy at the moment, or they don't want to bother him. HUH?

 

• DO YOU HAVE A LIST OF HOMES FOR SALE? Prospect walks in during your floor time and wants to see a list of all homes for sale.
  • You tell them that home prices range from $200K to $1.5M in your town. So what budget range are they looking at? Blank look.
  • Or they tell you they'll know it when they see it. 
  • You tell them you'll be happy to print information on certain properties but you'd like them to sit down with you to go over their requirements. They say they can't stay, or that someone is waiting in the car.
  • You ask to get their name, number, email address so that  you can alert them via email notification. They wlll give you some, but not all the information you request.

 

• YOU GIVE REGULAR UPDATES BUT....So you got the critical information. You know what they're looking for. You even managed to show them a few properties. You regularly communicate via voice mail and email. You even send notes from time to time. For a while, they were gung-ho about the search....and then it happened.
  • They tell you they've postponed looking for a while. or worse,
  • They don't return your calls or emails

In my opinion, if a prospect isn't willing to spend the time, or give you critical information about themselves inspite of your efforts to build rapport, then this isn't a client.

NEXT!

 

 

 

Today, while reading through some questions posted online, I came across this one:

"What is the status of the CA Foreclosure Moratorium that went into effect in June 2009? Are lenders still required to try a loan mod with the borrower for 90 days?"

I wondered if this REALTOR was trying to stimulate discussion. But she honestly sounded like she needed guidance. It seemed to me that the subject matter would make an excellent blog as an update, and not as a question from a REALTOR.

So I researched it on California Association of Realtors site. There is a wealth of information there. I feel guilty that I don't visit more often to stay abreast of Market Matters or Legal Updates.

One of the best resources for this Q&A is found on the Housing Stimulus Laws for 2009 (must be a member to log in and get this info)

And that's where I found the answers to her question. I promptly responded, and encouraged her to go to CAR's website to see for herself.

 

CALIFORNIA ASSOCIATION OF REALTORS  - This is a wonderful opportinity to review what our member benefits are. Looking at the various tabs, one will find:

 

• Newstand that has links to daily headlines about the real estate industry
• Education our California association provides high-quality real estate education for members, and this is offered via a variety of delivery methods, like Face2Face, live lecture, online, and home study
• Governmental Affairs - update on what CAR is doing to advance and support REALTOR issues in politics,  public policy and legislation
  
• Legal - lots of good and timely legal updates
• Meetings and Events - allows us to register online to attend meetings
• Business Tools - here's where we can access member beneifts, sign up for free webinars, etc
• Find a REALTOR - the search can be customized by distance, specialty, designation, language proficiency, etc

 

When in doubt --- go to the most trusted source!

MY DEAR SELLERS

During a short sale, our mutual goal is to get an offer accepted as quickly as possible by your lender  to prevent a foreclosure.

And as you already know, the effects of a short sale are far less damaging than a foreclosure or a bankruptcy.

REMEMBER YOUR GOAL:  SELL THE PROPERTY!

Please understand that maintaining the home is still your primary responsibility during this selling process, whether you choose to stay or not at the property, remember what it takes to sell.

 

 

MAKE IT EASY TO SHOW YOUR PROPERTY

Keep the house looking nice inside and out. You literally only have minutes to make a good impression. Make that first impression count! 

If it's messy and smelly, it won't sell. And if it doesn't sell, consider the alternative: foreclosure!    

Allow the realtor to put a lockbox that other realtors can use to access the property.

How can we sell it if we can't show it?

Don't insist on unreasonable windows of time to show the property, such as showing only between 12 noon - 1 pm, or requiring 24 hours notice.

If you're serious about selling, you'll do your best to accommodate all interested buyers and their agents.

Keep the utilities on. Buyers, inspectors and appraisers need the utilities on to complete their respective activities.

A dark home is gloomy and uninviting. No power on will also make the home smell musty. Bathrooms and kitchens may show mildew. These are all unappealing and are turn-offs. Why take a chance? You'll only have to turn them back on for inspections later anyway. So just keep them on.

 

COMMUNICATE

Be accessible. Provide a number to best reach you, and return calls promptly

When you're going out of town, make sure you can still be reached by phone, email, fax.

Complete all required documents, especially your financial information, in a timely manner.

Keep your records current and handy. Don't pack away important information like your most recent tax returns, bank statements, pay stubs.

Keep the lines of communications open. Although doing a short sale transaction will take weeks from the time an offer is submitted, by the time the offer is ratified by the short sale lender, it becomes a race for time especially if the lender insists on a specific date to complete the transaction.

Your role as a seller doesn't end until the transaction closes escrow. What if the buyer backs out?  We'll need to regroup quickly.

 

BE REALISTIC  

Accept the possibility that your property may be worth less today than what you owe, or what you paid for.

What your house sells for should not be your primary concern. Protecting your credit and your future ability to buy a home in the near future, is.

Remember that as a condition of a short sale, you as the seller will not receive any funds from escrow.

So does it really matter to you how much it finally sells for? Just aim to get it sold!

You may have to spend a bit of money to spruce up your property , but consider that an investment to accomplish your goal

 

 

TAX RELIEF

 

Yes, these are challenging times. Nonetheless, remember the provisions of the Mortgage Forgiveness Debt Relief Act   "to amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income, and for other purposes."

Key point in a short sale: the difference between what you owe and what it finally sells for was normally considered income, and would have been taxed as such....until the Mortgage Forgiveness Debt Relief Act was passed in December 2007, and applies to debt forgiven in calendar years 2007 through 2012.

As such, because this is not considered income, you may not have to pay taxes on it --- please consult with your CPA to get the complete and right answer.

 

As much as I bemoan the length of time and the hoops I go through to do short sales transactions, I am taking this opportunity to say, "THANK GOODNESS FOR SHORT SALES!"

Why?

...Because it's a way to guide our sellers who have found themselves in dire situations  and may not know their options.

...Because it's a way for distressed property owners to avoid foreclosure or bankruptcy, and thus salvage their credit

...Because more homes are within reach for home buyers who have little money but have a lot of time and patience to wait out the lengthy short sale process

...Because while there is a frenzy for buying foreclosure where people compete in multiple offer situations for AS IS purchases, there is less competition for short sales where there is room for negotiation

...Because short sales offer opportunities not just for the buyers looking for a good deal, or sellers hoping for debt forgiveness, but also for realtors who truly want to help their clients and who are in it for the long haul. When the going gets tough, the tough gets going. Right?

...Because we've learned how to do another type of sale. And every key learning is a new marketable skill.

What do we have to lose? It takes time, sure....but eventually, it will bear fruit.  The more we sow, the more we reap.

 Perhaps this is a good time to add that ALL of my current escrows are with short sale buyers and sellers!

 

RELATED POSTS:

SHORT SALE PACKAGE: Make sure it's complete before submitting to the lender

OPEN LETTER to Short Sale Sellers. If you really want to sell your property....

BEST AND WORST SHORT SALE LENDERS - a Short Sale Report from ForeclosureRadar.com

RED FLAGS: Are short sale sellers selling, just or stalling?

While setting expectations for a new client, I checked with the listing agent of a bank-owned property about the offer situation for the 3 bedroom/2 bath house in Hayward. I almost fell off my chair. He had already received 98 offers!

EDUCATING THE SELLER

Yes, we understand that in many cases, the banks set the list price. And that the strategy is to move the properties as quickly as possible. But aren't they at least informed or educated about the local markets? In recent months, there have been previously-unheard of stories of multiple offers in the 50s and 60s....but 98?

By listing the bank-owned property at incredibly low (and therefore artificial) price, the bank succeeds in:

• creating havoc among the buyers and their agents
• creating unnecessary work not only for the REO agents who must wade through these offers,
  
• challenging the buyer's agents who have to explain to buyers why their above-list-price offers are not even in the running
  

EDUCATING THE BUYERS

This is an opportunity to educate the buyers on what it will take to have an offer accepted (or at least considered or countered) --- besides offering a wad of cash at way above list price.

But how can we keep motivating the buyers?

How can we motivate the buyers agents?

I've run into competitive situations...but I can't fathom 98 offers --- and at last count, they were still coming!

 

 

On TRULIA a real estate related network where people post questions about buying, selling, market conditions, etc. , there was a recent question that had me shaking my head in disbelief.

What is the best way to wall off the so-called "pros" from discussions? This poster said that he "got tired of the endless self-serving promotion by realtors of themselves and the real estate market. It is quite a turnoff and just ends up dumbing down the entire discussion to a sort of infomercial level."

And he asks:

• Is there any way to have a section here where realtors and brokers are excluded?
• Are there other real estate forums where you can have an adult discussion?

That opened the door to a lot of comments. Since this is a real estate forum, of course there will be a lot of realtors who will weigh in. After all, this is our life.

 

HOWEVER.....

It does bring up the question on when and how we should present our credentials ---- as people who are sincerely trying to help and provide good information, and not as hungry agents trolling for business.

I have to admit that I, myself, have seen where others do promote themselves and have gotten annoyed at a few who are so blatant about it.

Then I second-guessed myself, wondering if that's the way to build a business  --- but an associate cautioned against doing that. He said that if you yourself are disturbed by what others are doing, why would you copy them?

What we should aim to do when answering questions is to stick to our purpose: give good information and qualified guidance.

 

QUESTIONS:

1. What are the two most important words in the English language? "Thank you."
2. What is the least important word? "I"

 

This is probably the right place to share this  quotation from the Dalai Lama:

"If you want others to be happy, show compassion. If YOU want to be happy, show compassion."

 

 

"Men are from Mars, and Women are from Venus." "He Said, She Said." Just a couple of book titles on the subject of how men and women think and express themselves.

"You don't understand!" "It's like talking to a wall." "You just don't get it." "You're not listening!" Sound familiar?

This video probably explains it better, and in just a few minutes, in a most entertaining way.

ENJOY!

Going through angst because of challenges regarding REO properties?


If you haven't seen this yet, you should watch it. The truth hurts, doesn't it?


Someone was clever enough to put the travails of a home buyer and a buyer's agent when it comes to making an offer on bank-owned properties.


I am going to send this to my buyers --- those with a sense of humor, of course --- and hope they can see the truth behind the hilarity.

This is a non-real estate related post, but directed at dog lovers in this community.

My family was made aware of two ailments that befell our dogs --- diseases we did not know about. And yes, they're serious.

 

HGE - Hemorrhagic Gastro Enteritis

http://vetmedicine.about.com/cs/dogdiseasesh/a/HGEindogs.htm 

Last Thursday, my sister said their young Shiba Inu  named Aiko seemed listless, and started vomiting blood. They made an appointment to see the doctor the following morning.

That night, her husband kept vigil over the dog. At 1:00 am Aiko started heaving and vomited a lot of blood. They packed her up and went to the veterinary hospital just 10 minutes away. Aiko didn't make it.

She was barely 4 years old. She was spirited and feisty. The family is in shock at how fast it happened.

 

 

 

Pemphigus Foliaceus

http://www.veterinarypartner.com/Content.plx?P=A&A=2202&S=1&SourceID=42

Our rescue dog, Joey, who is a Formosan Mountain Dog, started developing some skin lesions on his nose. They would dry up, and then new lesions formed. We took him to the vet who took a biopsy and confirmed the diagnosis. Left untreated, it could also be fatal. Fortunately, we were able to get him to a vet. Although the treament will be a long one that needs to be constantly monitored (and yes, it can get very expensive), we are thankful that we don't have to endure the heartache of losing a pet again.

 

We have never heard of these diseases before....so I wanted to make sure that the dog lovers are aware of their existence, what the symptoms are, and how fast one should act.

Don't second guess...

 

We can't tell people enough times the value we bring to the table. Buyers and Sellers alike don't really know what we do for them. And if they don't know, how can they appreciate us or refer us?

In advertising, there is a saying, "REPETITION, REPETITION, REPETITION"

Here's a question to all: How much is your time worth? Can you afford not to get paid for service you provide?

We, realtors, don't just provide transportation and open doors. I can only speak for myself, but this is a sampling of the service I provide for my Sellers:

BEFORE MEETING THE CLIENT

• I prepare a comparative market analysis and put together a marketing presentation (not a cookie-cutter presentation. There's a lot of thought, research and effort in this presentation.
• REALTORS will know that putting together a comparative market analysis is not just about looking at what sold, are active or pending. One has to determine other factors to qualify specific properties to be in the comps.

DURING THE MEETING

Because of the mountain of paperwork involved, it is critically important to review and explain the various documents and disclosures requiring the Seller's signature. This is also when we discuss a calendar of action items on what the seller and I should do to prepare the property for sale

ACTION ITEMS.  These are the various activities I undertake:

• Services
  • Scheduling inspections (home inspections, pest inspections, etc)
  • Helping and guiding sellers on staging their house.
  • If they don't have the right stuff, or don't have enough, I augment the staging by using a few of my things. Or, I will recommend a professional stager to consult with the client.
  • Providing resources for sellers, and letting in the service personnel in the house (e.g. Wood floor refinishers, painters, plumbers, electricians, housecleaners, landscapers, inspectors)
• Marketing Materials Preparation
  • Taking pictures (a lot of pictures!) - Selecting, editing, cropping, re-sizing, compressing, photo-stitching
  • Creating visual tours
  • Writing and designing flyers
  • Advertising in print (newspapers, postcards, flyers)
  • Putting together a Property Binder to include information about the property, copies of inspections, demographics, permit history, etc. that I provide at the house so that agents and prospective buyers can consult this information while they are at the property. Nothing like having info at your fingertips when you want it.
• Marketing Activities
  • Holding brokers' tours (during which I serve refreshments to entice more agents to come see the property)
  • Holding open houses as needed
  • Showing the property to prospective buyers

• Online and target marketing to reach the biggest audience: THE WORLD!
  • Uploading the posting on the MLS.
  • Showcasing the listing on REALTOR.com, uploading as many as 25 pictures, customizing the descriptions and scrolling headline for the showcase. This is critically important since this serves as the primary source of information that other realty websites pick up. So by the time I activate a listing, it is complete with pictures and visual tour.
  • Creating electronic flyers using Postlets, Vflyers
  • Customizing uploads on Zillow, ActiveRain, Trulia
  • Posting regularly on Craigslist
  • Uploading and creating website information about the property (this is posted on my website on Point2 which is networked with other Point2 members.
  • Uploading the information on our company website
  • Uploading disclosures online.  

  

INFORMATION 

• Following up with agents and prospective buyers who saw the property -- I send notes, email, and make phone calls
• Updating my sellers frequently on the activity on their house. I do this by sending them copies of the reports on REALTOR.com and Trulia on how many times it's been viewed. I include other reports that are available (how many times it's been viewed on Zillow, my website, et). I include a list of all the realtors who have shown the property, provide numbers of people who came to the open house, etc.
• Having continuous conversations with my Seller on the market, and if we should make some adjustments

 

OFFER NEGOTIATION

• Negotiate offers--- my first question to the other agent is if the offer is the BEST and HIGHEST offer from the buyer. That may give them pause, and then they ask me to counter rather than reject the offer.
• If there is more than one offer, I prepare an Excel spreadsheet comparing the terms and the estimated seller proceeds
• Upon presenting the offer to the Seller, we go through an intensive discussion. Sometimes, we go back and forth, and may even have more than one counteroffer.
• I call the buyer's lender and the buyer's agent to get a more complete sense of the financial wherewithal and motivation of the prospective buyers to close escrow
• During the escrow period, there is continuing negotiation that may involve request for repairs, credits for closing costs, etc.
• Coordinate with the buyer's agent the inspections and appraisal appointments

 TRANSACTION COORDINATION

• When we go into contract, I remain the point of contact among all parties
• I engage, and pay for a transaction coordinator to make sure our paperwork is in order
• Through it all, it's follow up, follow up, follow up!

These action items take hours, days, and weeks. I don't get paid until or unless I close escrow.

OUT OF POCKET EXPENSES
Remember, that I pay for all the advertising and marketing expenses that include membership in the Multiple Listing Service (MLS), REALTOR.com, website and visual tour hosting, newspaper advertising, color flyers and postcards, signage, etc.

If the property doesn't sell, I am not reimbursed for any of my out-of-pocket expenses

PUTTING THINGS INTO PERSPECTIVE: How much is your time worth? Can you afford not to get paid for service you provide?

SAN LEANDRO

When folks from San Francisco come to the East Bay, they only know a few cities based on the weather map they see in the San Francisco Chronicle. Most of them know about Oakland and Berkeley. But very few are aware of some gems of neighborhoods in the cities of Alameda, San Leandro, Castro Valley, Hayward and others.

Perhaps that is changing. As people find out about the more affordable housing in the East Bay (as compared to San Francisco, Marin, Santa Clara counties, etc), we are seeing increased interest in real estate in our neck of the woods.

And perhaps that explains the movement in our markets.

Like San Leandro. Here's what it looks like the past two years, Sept 2007 through Sept 2009, for detached single family homes.

• Supply and demand ....are we approaching equalization, perhaps a "normal" market?
  

• If the months' inventory level is any indicator, homes are selling at a brisk pace. Since we're at below 2 months' inventory, is this a signal that it's turned into a seller's market?
  

• Median price is below what they were in 2007, but it seems to be on the upswing
  

• Number of properties sold also inching upwards

 

 

 

 

 

OAKLAND

A picture certainly paints a thousand words. These charts show the trends for detached single family homes over a two year period from September 2007 to end of September 2009. Perhaps this illustrates why buyers are finding themselves in multiple offer situations on attractively priced properties that seem to sell in less than a week!

• The trend for inventory of detached single family homes for sale is startling . The high level of nearly 16 months inventory in December of 2008 steadily declined to its lowest point of 1.5 months in September 2009 in a 2-year period

• Number of homes sold appeared to have peaked in July 2009. Summer is typically when sales are brisk.

• The lowest median price was in March 2009 where it remained at that range for about three months. Then it slowly inched upwards for a noticeable increase in September 2009 at the same time that the inventory level was at its lowest the past two years. Could this be a sign of recovery?

• Supply and demand ---  another indicator that perhaps we're returning to "normal" as opposed to the "irrarional exuberance" of years ago.

 

 

 

 

 

ALAMEDA

A picture says a thousand words.

These charts compare the market activities for a two-year period from September 2007 to end of September 2009.

• One of the key indicators we look at to determine whether it's a buyer's or a seller's market is the inventory of homes for sale. If there are few properties on the market (low inventory), it signals a potential seller's market. As of September 2009, it appears we have just a little over a month's worth of inventory before the properties are sold.

• Number of homes sold (unit sales) appears to pick up. For example, there were only 18 homes sold in September 2007, same number in September 2008, but it increased to 32 sales in September 2009. This report says that's an increase of 78% comparing Sept 07 to Sept 09.

• But median prices are still comparatively low, from the low $700k in Sept 2007, to the high $500K in Sept 2009 for a decrease of 20%. 
  

• Supply and demand chart seems to support the oft-repeated phrase that Alameda is "holding its own" since there doesn't seem to be a drastic change in the market activity although the median price did go through quite a transition.

Could it be that the market is getting back to "normal" as opposed to the "irrational exuberance" and frenzy of the early 2000s?

 

 

 

In a previous post, I relayed the story of sellers who are gaming the system and did not intend to sell or move out. This is not an isolated case, and others have also told about their own experience in being interviewed for, or taking a short sale listing.

These sellers may use the short sale tactic to delay being foreclosed or evicted while they find another way to keep, or stay in the house.

RED FLAGS to watch out for, and I invite others to add to this list for future reference. 

While discussing the short sale listing:

• Sellers don't want a lockbox
• Sellers don't want a for sale yard sign
• Sellers won't give you a duplicate key
• Sellers won't give you the code to the security system and insist that they want to be at the house for all showings
• Sellers give very strict times to show, like only on Mondays between 6-7 pm
• Sellers won't give you letter of authorization to contact the lenders
  • If you do have the authorization, you should check frequently to see if the sellers are doing a loan modification. That's a dead give away that they won't or don't want to sell.
    
• Sellers delay providing essential information to complete the short sale package that will necessitate their personal financials (tax returns, pay stubs, bank statements, income/expense statement)
• Sellers are too picky about how to write the hardship letter, the photos and property description
• Sellers make it hard for you to take photos because the house is a freaking mess
• Sellers will argue about your list price, insisting that the price be at, or close to what they paid for it even though you show proof of current market value
• Sellers will argue about your commission even though you tell them the short sale lender will make the final decision about it

And when you do get the listing:

• During showings, and if the sellers are there, they talk so much about "problems" with the house to discourage would-be buyers
• Sellers do not make any attempt for up-keep
  • If they do want to sell it, they would make it presentable and appealing to buyers
• Sellers don't make themselves available to look at, much less discuss offers

When you have offer(s): 

• Sellers insist on countering offers, sometimes, over the silliest details
  • For example, they will want to uproot certain plants (that Myers lemon tree in the back of the house) because of "sentimental" value
• Sellers won't accept an offer AT the list price --- that's a HUGE RED FLAG --- and nitpick the offer
  
• Sellers don't provide a complete disclosure package regardless of how many times you explain they need to provide this info. Their only reason: it's an AS IS sale, take it or leave it
• Sellers say they need to consult with this or that person who aren't on title

When you are in touch with the short sale loan negotiator

• Sellers won't respond to request for updated financials the loan negotiator needs (the file wasn't opened for 2 months, the previous financials are old) because they say they already gave that information once before, and don't want to do it again

When you are ready to close

• When the short sale is approved by the lenders, and it's time for the buyers to have appraisals and inspection done, sellers aren't available at the requested times
• Sellers don't show evidence of packing to move out
  
• Sellers don't want to move, and ask if they can rent the place
  • Or worse, Sellers don't want to move, and want Cash for Keys
  • They dare you to evict them
• Sellers keep asking for postponement of closing, and going through the drama of not finding a suitable home to move to
• And....when checking with the lenders, you find out that:
  • the sellers filed for loan modification
  • the sellers filed for bankruptcy

What have you run into?