Archive for September, 2008
San Diego’s real short sale story
September 30th, 2008 Categories: Real Estate News, San Diego County Community News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO– This weekend, assisstant professor of economics at USD, Ryan Ratcliff wrote a U/T piece about his experience buying a home in the current market. His experiences mirror what I have been telling clients, both buyers and sellers, for months.
First, the adage for buyers that “if your offer doesn’t insult the seller, it’s not low enough” is not a good way to start negotiations. Ryan’s attitude going in to the home search was,”that I would have sellers falling at my feet begging for the opportunity to sell me their home” (San Diego Union Tribune 9/28/2008 *) but what he found out was that there is plenty of competition for competitive priced homes, especially REO or bank owned homes. During the process he was outbid on four homes they submitted offers on and states that those homes sold 10–15% higher than the list price.
Secondly for buyers, short sales are not what they seem. While they currently make up a large portion of the active listing market, very few are closing. Additionally, those that are closing are selling for more than the asking price. From January 1 through September 12 there were 5,744 short sales listed with only 1,381 closing. The median active list price of these homes was $299,000 while the median closed price was $328,000.*
I am working with numerous buyers who see a home that comes in to their price range, but fits the “if it’s to good to be true” adage. While you do need to consider short sales, it is important that you look at all the information regarding the current market value of the home and the owners loan position in the house. These things still matter as they are exactly what the asset manager will be considering and remember less than 25% of short sales are closing.
An example of a good short sale would one where the purchase price is no more than 15% less than the loan value, not the last sold price, and if there is a first and second, at the least the first will be getting close to if not all their money back. Many times if they are in this position, they will kick some money over to the second in order to close the transaction. If you have to work with only one lender the odds greatly improve.
An example of a bad short sale is a listing at $525,000 for a home that sold for $700,000+ and the owner has two loans at 95% of the original purchase price. Additionally the last sold comparable home in the last 90 days sold for $610,000 and is a true comparable property. If this home falls in to your not more than $500,000 budget and you think they will come down some, I would suggest moving on.
Again, short sales need to be considered, but do not get blinded by the asking price.
For seller’s, if you are in the position where you need to sale your home and you are going to be short there are a few important things you need to consider.
First, you should look at this as a real sale that you need to participate in. Treat it as if you stood to make money by making your home show its best and make it easy for potential buyers to view it. Yes, I know the situation is usually a bad one and it is hard to get motivated to help sale a home your essentially losing, but remember the bank is usually the one losing ten of thousands of dollars. The real reason for this however is the better the package you can present to the asset manager, read decision maker, the better your chances of getting your short sale approved and this is the goal!!!
If you need motivation, consider the credit score you spent so much time building. You will still need that to rent, buy a car and more, so you need to protect it. When necessary, I work closely with two short sale negotiating specialists and we insert clauses in to the contract to do everything possible to protect your credit. Remember, the better the buyer package the better the chances of avoiding foreclosure and getting short sale approval.
Secondly, the author notes the short sale “illusion”. You need to be realistic with what you are trying to do or you will be wasting your time and everyone elses and time is precious.
In several cases during my shopping this summer, an attractively priced short-sale with multiple offers would just sit, eventually being repossessed, only to be listed for a higher price as an REO a few weeks later.
The difference: you can actually buy the house at this higher price, where the short-sale listing and its attractive price were essentially just an illusion.*
I have lost listings where I approached the sellers with accurate and factual information and treated them with respect and honsety. The problem has been that I see bad financial situation and suggest a realistic short sale. Unfortunately, their goal is to try to breakeven or possibly make a few thousand and they find a real estate agent that affirms their thoughts but the whole time banking on the fact that the sellers will eventually give in and go for the short sale. The problem as I see it, is it is less than honest and in many cases the clock is running. The sellers waste precious time getting nowhere and they become discouraged. It’s a wear down and wasteful tactic and you should avoid it.
There is not a single stategy to short sale success whether you are a buyer or a seller. There are well recognized paths that when combined with the right agent can increase the chance of success. If you’re real estate agent is not putting real money into marketing your home, you need a new agent and quite possibly a new strategy.
Call me with any questions. I promise honest straight forward answers and if I can not provide them to you I promise to do everything I can to find the answer or the resource. The short sale battle is against you as a seller, but as I have said, the right agent and the right stategy can help change those odds.
But the short-sale component of inventory defies this logic: A desperate would-be short seller could list a house for 30 percent below comparable properties, but the combination of red tape, overwhelmed and understaffed loss mitigation departments at the lenders, and misconceptions about what’s needed to get the sale approved mean the house doesn’t sell any faster, if it sells at all.*
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DO NOT FALL VICTIM TO MORTGAGE SCAMS
September 25th, 2008 Categories: Real Estate News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO– GOOD NEWS, the rate of foreclosure filings took a break last month only up 23% from the year previous. The average going into August had consistently been over 60%. BAD NEWS, as the flood gates of bad economic conditions continue to open further, I have a feeling this will be a brief respite.
So in this time of a seemingly endless parade of bad news, there are those out there looking to make a buck by scamming desperate homeowners out of money and sometimes their actual home. Nothing like kicking someone while they’re down.
While there is a great article from MSN about three of the most common scams, the most common potential for a scam in our area is probably the “Phantom Help”.
The “phantom help” scammers are usually the guys placing the yellow signs offering help at the freeway offramps and on the telephone poles. In this scam the company charges you thousands of dollars for various administrative duties like filing forms and phone calls, or else keeps simply promising a big rescue late. What the company is really doing is nothing and
eventually you will fins this out. Unfortuantely, by that point it is generally too little too late to take real steps. On top of this, you are out of the money you spent.
These companies can also target you through foreclosure sites and/or the public record. When your lender starts the foreclosure process in California they file a notice of default and list the amount of money your are delinquent on. These companies now know you are behind in your mortgage payments and you become there target.
There is help though.
If you are falling behind on your mortgage or know that is inevitable, there are things that can be done. First and foremost, you have to be honest with yourself with regard to your situation. Chances are time will ont heal this wound.
Your first line of defense is your phone and your computer. You have to communicate with your lender. Not only explain to them what is happening in your life to cause your situation, be prepared to back it up with documentation. I recently wrote a blog post about loan modifications and it was reported that almost half of all loan workouts were loan modification. Statewide this number monthly hoovered between 9,000 to 10,000. Realize this is a real possibility. You just need to be proactive and patient. This process can take many weeks. You are trying to save your home and your 
credit so do not give up.
If you do not seem to be getting anywhere or you do not have drive to push it through, I do have a lender who has a team that will work on a loan modification for a fee. How this is different from the scam mentioned, is they do not collect any money unless they are successful in getting the modification. Additionally your fee is based on the amount of money you have saved.
If you can not get your loan modification I can help you with the sale of your home. If you are delinquent on your current mortgage, we would do a preforeclosure or short sale. The diifference between the two is your standing with the lender. It would be considered a short sale up to the point that the lender files Notice of Default initiating the foreclosure process. At this point it technically becomes a preforeclosure sale. The bottom line is we do everything we can to find a buyer and submit that offer to your lender along with a hardship letter explaining why you no longer can afford your home in the hope that the lender will take the short payoff and not foreclose on your home. 
Again, probably the most important thing you can do is to acknowledge your situation promptly and try hard to work with your bank to come to agreeable terms. While you are doing this, CALL ME, work with someone you cna trust to evaluate your situation. Your goal should be to try to keep your home, but I realize that is not always possible and I will do everything I can to help you. Remember, even renters are buying a home. Just not theirs.
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Renting? Don’t forget your renter’s insurance
September 21st, 2008 Categories: Real Estate News, San Diego county Real Estate News, Triathlon Club of San Diego Race Reports
SAN DIEGO– It has been reported in a survey by Allstate insurance that only 40% of the nation’s renters have renter’s insurance versus 96% of homeowners holding policies on their homes. The primary reasons for the lack of insurance by renters were not enough time to look into insurance, the belief that coverage is too expensive and they did not think their belongings were that valuable.
While I can not help you the time, I hopefully can help you see why you should find time to seek coverage which averages $15 month nationally.
First, it’s important to know your landlord’s policy will not cover your personal belongings or relieve you of personal liability. Their policy is there to cover the building and their liabilities.
While individually your belongings do not seem expensive or valuable, imagine having to replace everything you own at one time. It has been reported that the average renter has approximately $20,000 in personal belongings. If you are a triathlete or cyclist, it is a renter’s policy that would replace those bikes if something were to happen to them. This may also apply if something were to happen to them while traveling, shipping, etc. You would need to verify this with your agent, but this option is open.
Also, personal liability can be huge in our sometimes quick to sue society. Coverage from your policy would cover any costs incurred, usually medical but may include legal costs, if someone were injured at your home. This coverage could also be viable for an accident that occurs away from your 
home and may also include dog bites if you have a pet.
It is very important that you take an inventory of everything you hope to have covered. This includes clothes, jewelry, shoes, hair straightener(those things are expensive!!), bike pump, EVERYTHING!! It is best to have a written inventory and either pictures or video of items that a claims adjustor may have a hard time believing the value of. Now here’s the important part of this step….. DO NOT KEEP THIS IN YOUR HOME and have more than one copy. A safe deposit box is probably best, but at the least, have one copy with a family member and maybe one at work.
Now that you have your list, and hopefully you now appreciate how much you actually have, it’s time to contact an insurance agent. The best place to start would be with the carrier of your auto policy as most insurance carriers have multiple policy discounts. Also, make sure they are 
aware of any high dollar items such as the $10,000 Pinarello or the $12,500 Rolex. You want to make sure these items are covered.
There are a couple of other things you need should specifically speak to your agent about. Ideally you want “replacement cost” versus “actual cash value”. Replacement cost pays for the item in today’s dollars up to limits in the policy term, while actual cash value pays for the replacement cost minus depreciation. This is an important difference. Another question that may be applicable pertains to roommates. Ask specifically if your roommate can be added to the policy.
Are you convinced? Hopefully so. Remember this post is advisory only as I am not an insurance agent so PLEASE verify any information with your agent. Also, ask questions. Even if there is a one in a million shot of the scenario playing out, inquirer about it. Lastly, inventory EVERYTHING!!!
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Is the real estate market THAT bad?
September 17th, 2008 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News
SAN DIEGO– With all due respect to auto dealers and CarMax, sincerely, can the real estate market be so bad that a used car lot trumps a new condo project? After all housing and construction are traditionally a huge economic engine in our area.
The developer of a 160 unit condo project in the northwest portion of Escondido is forgoing the plan and leasing the land to CarMax for a new used car dealership.
While the city it seems is happier to have the dealership coming in place of the condo project, there may already be signs of trouble. The attorney for the developer, Steve Fitch, is quoted in a North County Times article as saying, “ CarMax hopes to begin construction early next year and open the dealership by the end of 2009.”
The sign of what I consider trouble ahead for this plan? CarMax spokeswoman, Trina Lee in the same article said, “company officials recently decided to slow the pace of new dealership construction and that she doubted the Escondido site would open in 2009.”
Somebody, better get a memo out.
What is the city’s Mayor Lori Holt Pfeiler’s opinion on this change and her city’s real estate market?
“The developer decided that a residential project would take too long for them to get a return on their investment,” said Pfeiler. “It must mean that the housing market is even worse off than the car market.”– North County Times, September 16, 2008 7:53 PM PDT.
So just how are things going in the Escondido real estate market.
When comparing August 2007 to 2008, NSDCAR HomeDex report show an average 40% price decline for detached homes and 57% for attached in the
city’s three zip codes. The postive side to these numbers are an affordablity rate of over 70% for attached homes which is the highest for North San Diego County. Unfortuantely, so are the depreciation numbers.
The upside to the downside.
As of this writing, there are 100 detached homes of three bedrooms or more FOR SALE IN ESCONDIDO FOR $200,000 OR LESS. Using BANKRATE.com’s mortgage calculator and average interest rate for today, you could finance $190,000 for 1106.38 a month on a 30 year fixed.
Could you rent for less? Would you like to write off an additional $15,000 a year off your income tax while saving versus renting? To make this happen you would need approximately $8500 for your down payment and closing costs, however, some of this could come from a buyer’s credit, so it could be less.
CALL ME if you are interest in exploring this opportunity for yourself or as investment properties.
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Italian Vacation Villas for $1.46 us
September 16th, 2008 Categories: Real Estate News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO– Amongst all the news of the rescue of Fannie Mae and Freddie Mac, the sale of Merril Lynch and the collapse Lehman Brothers and AIG, 
there was this: Italy, Villa For Sale: Two Bucks.
With 12 months of sun and breathtaking views across the hills to the Mediterranean Sea, this is your chance to own an historic part of Sicily, Southern Italy and enjoy the Italian culture in your Italian holiday home.
My thoughts immediately went from doom and gloom to the romanticism of the Italian Riviera as I strolled the beaches of the Sicilian coast where the smell of the chaparral and the ocean air mix. Ahh… not a care in the world.
Italian villas on the cheap
It seems back in the late 1906’s the Sicilain village of Salemi experienced an earthquake that killed 200 people and reduced the much of the towns villas to rubble. The city’s new celebrity mayor, Vittorio Sgarbi, in an effort to stimulate the town is hoping to sell 3,000 of the ruined villas for 1 euro. However, there are conditions to the sale as well as a concern for corruption.
The new owners have two years to renovate, staying true to each building’s original characteristics and, when possible, using the area’s local
artisans, masons and builders. The estimated cost for basic renovations is between $140 to $186 per square foot, based on local market prices for labor and materials without any extras( I converted these numbers based on today’s exchange rate) or approximately $100,000 total.
Due to Salemi’s proximity to the famed Mafia town of Corleone there is a concern for corruption, but a thorough screening and application process has been instituted to help maintain the integrity of the project and its developers.
If you are interested in this possibility click any of these links to the UK real estate firm that specialises in Italian property and the 1 Euro property in Salemi Sicily.
Looking for a home in San Diego’s Little Italy, go here and then give me a call.
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San Diego’s housing picture just got clearer?
September 9th, 2008 Categories: Real Estate News, San Diego county Real Estate News
SAN DIEGO– As most everyone knows by now, on Sunday, the federal government put both Fannie Mae and Freddie Mac in to conservatorship.
Placing the companies in conservatorship, rather than receivership, could signal that the government does not intend to nationalize or liquidate Fannie Mae and Freddie Mac. Instead, under the terms of a federal law passed this summer, conservatorship is designed to allow the government to restructure the companies and return them to private control. Treasury officials have previously compared the process to Chapter 11 bankruptcy.-Seeking Alpha, 9/6/2008
So what does this mean to San Diego’s current and potential homeowners?
There are two primary impacts to our housing market.
Firstly, for existing homeowners, interest rates have already started to fall on fixed rate loans and are expected to continue trending downward for the next 3–6 months. This is great news for homeowners with loans that have rate adjustments coming in the future. However, being realistic, the changes in loan program, new qualifying guidelines and loss of equity, are 
going to be factors limiting the number of homeowners that can take advantage of this.
Secondly, for potential buyers and sellers, more importantly is the cause of the lower interest.
The reason rates have already gone down, currently at 5.88% down from 6.26% last week, is the potential for a large and consistent infusion of cash in to the mortgage market from the government. This infusion will ‘loosen’ the flow money which should help lower underwriting standards.(Isn’t this how we got into this predicament in the first place?)
The government hopes that loosening the purse strings will prompt lenders to lower underwriting standards and ease the credit crunch that has kept many potential home buyers on the sidelines.-San Diego Union Tribune,9/9/2008
With the significant drop in home pricing and our market’s high inventory, if you have been waiting to purchase, I would give serious consideration to the current market. Your new home is waiting for you and remember, if you are renting, you are buying a home. Just not yours.
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Save money, time and your credit
September 6th, 2008 Categories: Real Estate News, San Diego County Community News
SAN DIEGO– I was recently surfing the net looking for something to perk my interest for my blog. I happened to go to the Department of Corporations website, not sure why, and what I found there is encouraging.
I am working on a market campaign, the pictured is a rough idea, reaching out to homeowners in trouble. The worst thing homeowners facing a money crunch can do is hope the problem goes away and it seems their biggest hurdle is reaching out for help. I realize it is hard to talk about these things, but you HAVE to and the sooner the better.
There is a huge window of opportunity right now to get either a loan modification or a short sale.The government, federal, state and local are all over lenders to do everything they can to help homeowners stay in their homes. Currently it is estimated that up to 60% of the homes banks have already foreclosed on are NOT on the market. The average monthly case load
for a full time loss mitigation manager in the state is approximately 150 files a month. Again there is a huge incentive for financial institutions to try to help as they are getting buried.
What the survey showed to my surprise is that approximately 20% of all loan workouts initiate in the state are granted loan modification or forbearance. This is GREAT news. Another 25% close escrow through foreclosure/REO sale or short sale. However, short sale closings are less than 10% of this group. This tells me homeowners have a GREAT chance of getting a loan modification if they initiate the process soon enough and have a real reason for the need.
Lastly, I am here to confidentially help you with your situation. We will work together to try to come to the best solution for you. I am working with a lender that can help with the loan modification process. Feel free to email me or call 760–415–3329.
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San Diego’s free shade tree program in jeopardy
September 3rd, 2008 Categories: San Diego County Community News, San Diego county Real Estate News
SAN DIEGO– What does a New Zealand Christmas, a Chinese Flame and a London Plane have in common? They are three of the up to 19 varieties of shade trees available for free from the California Center for Sustainable Energy Cool Communities Shade Tree Program. This program is now in jeopardy due to a loss of funding.
Started in 2002, the shade tree program was designed to provide homeowners with free trees to plant strategically on their property. With proper placement, homeowners could save energy by using shade trees to help keep their homes cool in San Diego’s year round summers. An added benefit of course is that trees help beautify the homes and help our environment. Since the programs inception over 36,000 trees have been distributed.
Prior to 2006, the program had been funded by the California Public Utilities 
Commission with funds collected for the public purpose program charge. This charge is tied to to our SDGE based on natural gas usage. While the monies will still be collected, it is the shift in oversight of the funds to SDGE that has caused the program to loss its funding. SDGE is looking to use the funds for more immediate energy efficiency benefits.
The program is funded through 2008 and unless new funding is found, it will most likely be terminated then. Here’s your chance to beautify your home, neighborhood, save energy and help the environment all at once.. FOR FREE!!
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