This morning I received an email from Bank of America that there is still Transition Assistance for Distressed Homeowners in California. Not all homeowners will qualify, but for those who do, it can be a real blessing. Here’s the email: Distressed California Homeowners May Qualify for California’s Keep Your Home California Transition Assistance Program (TAP). If your financially distressed California clients can no longer afford their homes and are pursuing a short sale or a deed in lieu of foreclosure, they may be eligible for financial help with their relocation to alternative housing. The funds come from the Transition Assistance Program (TAP), part of the Keep Your Home California Program. The state of California is providing up to $5,000 in transition assistance to qualified homeowners who can no longer afford to stay in their homes. You can help by advising your distressed clients that they must: Apply for the funds through their state’s website or by calling 1.888.954.5337. Maintain their property until their house is sold or returned to the lender via a negotiated deed in lieu of foreclosure. For qualified homeowners, these state funds may be used in addition to any other transition assistance that the homeowner may receive by participating in the Federal Home Affordable Foreclosure Alternatives (HAFA) program or in any other pre-offer short sale program. To learn more about the Transition Assistance Program’s guidelines, and how your clients may qualify, please visit that program’s website at keepyourhomecalifornia.org. You can also direct your clients to call 1.888.954.5337 and identify themselves as Bank of … Read More
Some new housing data was released, revealing the incredible shrinking housing market. For starters, 31% of all homes sold in Q2 of this year were either short sales or bank-owned foreclosure sales, which together are collectively known as “distressed sales”. The percentage of overall market activity that was distress-driven actually went up from 26% year-over-year, even thought the total number of distressed properties sold went down. More about that in a moment. One finding that deserves a good long look is the discount at which distressed properties are purchased. According to these findings, REO sales and short sales, on average were purchased for 32% less than comparable non-distressed properties. 32% is no chump change, by any means. The fact that he number of distress sales has dropped off yet they have gained market share can only mean one thing; that fair-market sales have dropped off further. This is indeed the case, as non-distressed homeowners are refusing to list their homes. This is due on part to the hit that their equity has taken over the last few years, but that is merely one part of the story. Fair-market listings are being undercut on price at every turn, meaning that even if they are listed, in many cases they are less attractive to buyers and don’t make it to the closing table. This is important to note because fair-market sellers have a special role to play in any healthy housing market. In many cases, fair-market sellers sell their home, and buy another, more expensive home. The mid-high … Read More
You really need to look at the year before to see how the market performed – and from the statistics, we can see the median home price, county-wide, is actually down 33.5% in April of 2009 compared to a year ago. … Honestly, I am mystified how people can take a few anecdotes, completely ignore the state of the economy and the housing market as a whole, and now herald, with strident authority, that we are now at the bottom of the market and THIS, TODAY is the time to buy, or you will miss out on the chance of a lifetime. … Well, that’s not true – short sales can also occur at those prices, and some people who have had their homes a long, long time may have enough equity in them to compete with all the REOs and short sales. … Personally, I think it’s going to put increased pressure on the bottom of the market, as many people who were looking at buying a lower-priced “starter” home may now be thinking of stretching to go for one of these “premium” foreclosures which I expect we’ll be seeing.
Whether you think the current housing crisis is a cause of a symptom of the economic meltdown in the United States and abroad, there’s no denying that there’s a great deal of uncertainty about how long this recession will last , how deep it will cut , and what this means for people looking to buy a house in Santa Cruz today. I’ve said it several times in various postings to this blog, but I think it bears repeating: I think home prices in Santa Cruz county will continue to drop for the foreseeable future – and by that, I mean the rest of this year, at least. … It’s not a new thing – as I mentioned a blog entry or two ago, this multiple-offer feeding-frenzy has been going on at least 18 months, I don’t see that it is more common today than it was a year or so ago – but perhaps it’s being talked about more in the media, as there is now more effort into talking up the economy rather than talking it down. … I had seen it when it had come up (I send myself e-mails from my automated system for every bank-owned home that hits the market), but at the moment, I had a number of deadlines I was working to meet so I didn’t look at the particulars to see that it was really an incredible deal. … Actually, when it started out, I don’t think it was a short sale – but as the months went by, the price was reduced until finally the owner owed more on it than the market would pay.
While you can get a good deal on a property by buying it as a short sale, I posit that you are not necessarily getting a “good deal” – you are probably getting a fair deal, given the state of the market. … The thing with short sales is, the lender gives short sale approval, with a close of escrow to be on-or-before a certain date – and they typically don’t give you very much time to close escrow once they have given you approval, as was the case here. To cut a long story short, we were ultimately able, by hook and by crook, to get the unit certified as “asbestos free” in time such that the lender could fund the loan and close escrow in time to stay within the time period permitted by the short sale approval letter. We had to kind of cheat here, actually – my client got the testing company to do a simple field test, because if we’d have had to wait for the actual electron-microscope lab test, we wouldn’t have made the cut-off date.
I personally don’t have a problem with creating urgency to buy – I think that by now, most people can see the writing on the wall – if you want to buy some real estate in Santa Cruz, now is a fine time. … The idea is that you do such a good job interviewing the client and finding out what they really want, you can save everyone a lot of time by only showing them properties that they have a good chance of actually buying. … I do encourage folks to drive by on their own, because most of these “well priced” properties turn out to be not so well priced when you discover there’s high tension power lines, or the neighbor has his front yard littered with broken down cars, or the odor from the sewage treatment plant is just a tad too ripe. Don’t get me wrong, I’d like to show each buyer no more than three properties, because the Keller Williams people do have a point – there’s little point in showing property that you are fairly certain the client will not buy.
I think they expanded the digit count because the MLS is growing, it won’t just be the five counties around here (Santa Cruz, Santa Clara, San Mateo, Monterey, and San Benito) but will expand to include the Greater San Francisco Bay Area. Another thing that’s happened release with “Release 3.8” of MLSListings.com is that you can now search for bank-owned REO properties. … The thing is, of course, that the agent has to manually set that flag, and agents are not the most detail-oriented people in the world – especially busy REO agents, who often put no comments or pictures on their REO listings. We’ll see how well that works out – but no matter, because I have my own weekly Santa Cruz REO and Short Sale list that I send out, which I find by manually reviewing all the listings that come on the market each week and send the list out to subscribers.
Or, if their asking prices are reasonable, more often than not, it’s a short sale, which means that the contract and price are subject to approval of the one or more lenders which have loans outstanding against the property. … That leaves bank-owned “REO” foreclosure properties (not all of which are actually priced to sell) and those few not-overly-encumbered homes with enlightened sellers who realize where their homes need to be priced in order to actually be in the market and have a decent chance of selling. So when you look at homes that are actually in the market and priced right, there really is not a good selection of these kinds of homes. … Beyond the fact that the seller, a bank, already said it was an as-is sale and no repairs would be made or credits issued for same, there’s another salient point: there were three offers on the table.
You know me, I never look a gift horse in the mouth – if the boss is going to give me an opportunity to be in front of a bunch of potential real estate buyers, I’m there! … I know about all kinds of real estate aside from foreclosures, but I imagine they’ll let me chime in if I have something I feel needs to be said on another topic. … The panel discussion will be held on Thursday, May 8th at 6:00 PM at Santa Cruz Title Company in Capitola – 1955 41st Avenue , just three doors down from Starbucks (behind the Burger King, Citibank, and various other corporate logos ). … They say “Space is Limited, Call now to Reserve a Seat” – but I don’t imagine the fire marshall will be on-hand to shut us down if we should exceed the rated capacity from the room.
And it is also better than getting woken up by the morning news, especially in these dark days. You may have heard this one on the drive in to work, or perhaps they were bantering about it on NBC’s Today Show or something: [From Bloomberg.com: Worldwide ] U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders. … Read on: [From Median home price drops to $650,000 – Santa Cruz Sentinel ] The switch pushed the median price of a single-family home down in March to $650,000 from $682,500 in February — but not as low as $599,000 in January, when 33 percent of homes sold for less than $500,000. … According to the article: Ganges doesn’t specifically track REOs but he found 12 of the 28 homes sold in Watsonville in January, February and March were bank-owned. … I included Watsonville and the outlying areas (but not north Monterey county), and counted houses, condos, and multi-residential properties (actually, I don’t think any multi-res sold in that time period).
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