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Auburn CA Real Estate is seeing multiple offers over asking price.

Multiple Offers Gaining Momentum in Auburn CA, and other hot real estate markets.

Remember the “Roaring 90’s”….. Those days when you could list your house on Friday and on Saturday people would be parked in your driveway writing offers and good faith checks on the hood of their cars? Multiple offers were the norm and offered sellers a generous selection of offers from which to choose.

Believe it or not we are experiencing a trend toward multiple offers even in this still difficult market and there is evidence that this trend will continue as buyers compete in a market with limited inventory.

What are the fundamentals driving this “Multiple Offer” revival?

• We are currently experiencing a shortage of inventory. Inventories are down 30% over this time last year. Banks are slower to process and release their inventory of bank owned properties and the building industry continues to search for solid economic signals that would incent them to invest in new building projects once again.
• Interest rates continue at historically low rates and it would appear that they will hold for the near future.
• There are continuing signs that the over-all housing market may have reached its bottom or near bottom and that this is the strategic time to jump in to maximize future appreciation. The latest data from Zillow points to stabilized pricing in almost every major housing market.
• Renters are starting to realize that they can afford a mortgage that is less than their current rent. This will continue as the cost of renting rises as landlords realize they can raise rents to the current market “pain threshold”. The flip side of this is that this represents an opportunity for those who want to invest in rental property to optimize their cash flow income with little risk.
• Successful sellers are pricing their homes at fair, realistic and competitive levels as opposed to pricing that reflected emotional attachment to unrealistic historical home values (Which resulted in “months on the market” and repeated price reductions).

Based on this current shift and what appears to be a continuing shortage of inventory, how do serious buyers improve their odds of success in this increasingly competitive “multiple offer” environment?

• Buyers who are serious and want to be able to get their offer viewed as competitive should always pre-qualify with their financial institution or have strong, liquid cash resources. Cash buyers or buyers with a strong cash content in their offer reduce the buyers risks and get their attention immediately. Remember, you may be competing against cash laden investors who want the property as much as you !
• Be prepared to make a strong and realistic offer that is most likely at or above the asking price.
• Sellers who have fairly priced their homes to prevailing market metrics are well aware of the trend in multiple bids and are not motivated to consider “low-ball” or sub market offers.
• Make sure you have a Realtor that does their homework on the current market value of the property in that micro-market and knows how to write an offer that will attract the attention of the seller and their agent. A professional and experienced agent will be able to show you that the home is or is not properly priced based on recent comparative market data in the neighborhood in question. Savvy agents will research the sales data and insure that the home and the data represent an “apples to apples” comparison scenario.

Watch a recent a recent video from the Wall Street Journal on this latest trend.

Good luck and let the bidding begin!

If you’re a home seller on the fence, you had better SEIZE THE MOMENT!

Talk to any busy Realtor in our Auburn, CA, or anywhere in Placer County for that matter, and you will no doubt hear that houses are selling over asking price, and with multiple offers.

Properties in Placer County are being listed and bombarded with multiple offers in a matter of days. And I’m not just talking in the affordable price range of $200,000 or under.

Cases in point:

1. A house in Meadow Vista in the $600K range had two offers–one buyer was disappointed.
2. My listing in Ophir, that did not attract an offer in January until the listing price went below $500K.  I received 2 offers the first day after it was relisted at the bank’s countered price of $520,000 (first buyer had to cancel), with two other buyers who were late to the party.
3. Another listing of mine in Ophir received 5 offers the first week, and I receive calls about it almost every day.
4. I listed a house in Wheatland on Saturday morning and had a cash offer by Saturday afternoon.

So what’s going on? In a nutshell, inventory is severely low.

The old rule of Supply and Demand

In September of 2007, during the decline, we had 10 months of inventory! What do you think was happening to home prices? Bingo, they were sliding downward. Now the reverse is true.

The perfect storm.

Sellers, you have a window of opportunity. We have heard the tale of “shadow inventory,” the homes in default that will eventually be hitting the market as bank owned. We have been hearing this for a very long time. If you need to sell, and sell quick, there hasn’t been a better time in a long time, and we don’t know how long this window will stay open.

Upside-down?

If you are upside-down in your home, there are options for you too. As an agent specializing in helping homeowners sell their upside down homes through short sale in Auburn, CA, and Placer County, my team can get your home sold on you on your way to getting back into this great market sooner as opposed to later.

Contact me to learn more about selling your home.

If you stay current, you may be able to buy a home immediately after short sale.

Under the right circumstances, you don’t have to wait to buy your next home!

Recently I learned about a new loan program from my favorite lender, Roland Benson. He is with iMortgage, a direct lender, who has access to many loan programs that the big banks do not.

Through this particular program, you may be able to complete a short sale on your home and immediately move into your next home, avoiding the typical 3-year wait that most homeowners must endure.

There are some very specific requirements to qualify for this program:

1. Your present home is financed through a conventional loan.
2. You are current on your mortgage payments.
3. You are current on all other debt.
4. The NEW HOME must MAKE SENSE for your family (i.e., you are not selling just because you don’t want to keep your upside-down home), for example:
• The price is lower
• The payment is lower
• The home is closer to work
• There is an increase in room count
• Bottom line, it is the right decision for your family

To see if you might be a candidate for this program, contact me, or call Roland directly at (916) 768-1578.

Loan Modification: Should you waste your time?

Why you shouldn’t hold your breath for your bank to modify your loan.

For the past several months my Auburn CA Short Sale Team and I have been holding free community workshops for homeowners who are upside down in their homes and are unsure of their options. Our local attorney in Auburn, CA, Richard Hall, who specializes in this area of law, gives a great presentation which helps people understand what their options are.

A repeated theme is that our attendees tell us about the nightmare of their attempted loan modification, and include some or all of the following details:

1. It’s been 2 years and they still haven’t modified our loan.
2. They lost my paperwork over and over again.
3. I was assigned a new negotiator repeatedly.
4. One hand doesn’t know what the other hand is doing.
5. A notice of foreclosure sale was posted on my house!
6. My modified payment is higher than it was before I started the process.
7. They told me they wouldn’t work with me until I missed my mortgage payment.
8. And finally, “you don’t qualify.”

Do any of these scenarios sound familiar? Frustrating, right?

The reality is:

1. Approximately 1% of borrower-initiated loan modifications are ever granted.
2. Almost never is there a reduction of principle balance owed.
3. Even if your interest rate is modified, you will likely not be able to pay off your upside-down property in your lifetime.

The other thing that most consumers aren’t aware of is that the path to foreclosure keeps marching on. When the bank finally declines your loan modification, your options become very slim because time is about up.

There are more options than you might think, including the possibility to buy a new home, at today’s value, immediately after closing escrow on your short sale. Contact me to learn more.

6 must-haves for your short sale package.

In order to have a successful short sale, the following items must be assembled asap upon deciding to list your home as a short sale.

1. Recent mortgage statements for all loans.
2. Copies of your most recent tax returns (last two years ) with W-2′s and 1099′s.
3. Copies of your last two pay check stubs (husband & wife).
4. Copies of your most recent bank account statements.
5. A letter, written in your own words, outlining the facts associated with the hardship that caused your financial distress (hardship letter).  
6. Completed financial disclosure, a form usually provided by the lender. Include copies of credit card statements, financial obligations, divorce decrees, physician letters, or anything else that shows you are having difficulty making payments.

Once an offer is received, your Realtor® will submit these items to your lender(s), along with the other documentation necessary for a succesful short sale!

For more information, feel free to contact me.

What is Mello-Roos?

Is there Mello-Roos?  is the familiar cry heard in many communities around California from buyers shopping for homes. So what is Mello Roos?

The Mello-Roos Community Facilities Act was created in 1982 to provide a means of funding community infrastructure such as sewer systems, streets, landscaping, fire and police protection, libraries, parks, schools, etc. Mello Roos bonds remain in place and are paid along with property taxes for as long as it takes to pay the bond off, oftentimes for upwards of 20 years. When a property changes hands, the obligation to continue paying this bond is passed to the new buyer. It is the responsibility of the seller to disclose any knowledge of this bond to the buyer.

To find out if a property has Mello Roos assessments, check out this post.

To search for homes in the area, click here.

The Four M’s of Short Sale Hardship

Will you qualify for a short sale? What is your hardship?

When considering the possibility of a short sale, it is important to know what your hardship is, and be able to communicate it clearly, along with supporting documentation, to the bank.

Here are the  Four M’s of Hardship:

1. Medical. Something has happened with regard to your health, or to the health of one of your family members, which has caused you to lose income, or to deplete savings.
2. Marital. You are having marital problems, either separation or divorce, which has caused a decrease in income to the household, and the desire to sell the home.
3. Money. You have either lost your job or have had a decrease in salary which has impacted your ability to pay your mortgage.
4. Moving.  If you are forced to relocate, this can also be considered a hardship.

Any one of these situations, when documented, will help to support your case with the lender.

For more information, contact me and I’d be happy to help.

What is a short sale? – Avoid Foreclosure

Are you considering a short sale? Here are some basics to get you started.

What is a short sale?

• When a homeowner owes more on their mortgage than their home can sell for in the current market (a.k.a, upside-down), the homeowner can try to avoid foreclosure by negotiating with the lender to accept a “short” payoff.

Are you a candidate for a short sale? Ask yourself this question:

• Do you have a true hardship that is keeping you from making your payments?
• Think job loss, job transfer, illness, or other challenge. Discuss your particular situation with your lender. Loss in value due to market condition does not qualify as hardship.

What do you need to do to prepare for a short sale?

• First, find a Realtor® who is experienced with the short sale process, who knows how to negotiate with banks, and will be your partner to get the transaction closed.
• With the help of your Realtor®, compile your hardship letter and other necessary documentation which comprises the Short Sale Packet.

What goes in your hardship letter?

• In your own words (and in your own handwriting is best), describe the circumstances that have caused you to be unable to make your monthly mortgage payments.
• Be personal and sincere about your situation, and include as much detail as possible. We want them to want to help you.

What goes into the necessary Short Sale documentation packet?

• Proof of income & assets, including:
  • Bank Statements
  • Pay Stubs
  • Assets (investment accounts, stocks, CDs, other properties)
• Proof of hardship, which might include:
  • Bills
  • Unemployment Records
  • Death certificates
  • Divorce papers
• Preliminary net sheet, prepared by your Realtor®, reflecting the price you hope to get, less the cost of the sale. Include a comparative market analysis, prepared by your Realtor®.

Prepare your home for sale

• With the help of your Realtor®, price your house to generate an offer.
• Prepare your home for sale.
• If you do not get showings and/or an offer in the first 2-3 weeks, lower the price.
• Keep lowering the price until you receive an offer.

Submit offer to the bank along with the short sale package

• Your experienced Short Sale Realtor® will take it from here
  • They will submit the package to the bank
  • They will follow up to make sure it has been received
  • They will be assigned an asset manager with whom they will communicate throughout the short sale negotiation
  • If all goes well, the lender will approve the short payoff, and your Realtor will follow the transaction through to a successful close

For more information, contact short sale specialist Noel Crider.

9 Alternatives to Foreclosure – Things to think about before you “Just Walk Away.”

Before you decide to “Just Walk Away,” here are some alternatives that you might not have considered that could reduce the negative impact to your credit score, and allow you to get back in the housing market sooner.

1. Loan modification – The lender and the homeowner agree to change one or more of the original terms of the note in order to make payments more affordable. (Be careful when hiring a loan modification company!) Common loan modifications include:

• Adding missed payments on top of the existing loan balance
• Turning an adjustable-rate mortgage into a fixed-rate mortgage
• Extending the number of years the homeowner has to repay the loan

2. Forbearance – This allows the homeowner to pay less than the full amount of their mortgage payment temporarily for a prescribed period of time. Forbearance might be considered if the homeowner can show there is some source of future income that will bring the mortgage payments current.

3. Reinstatement – The homeowner brings current the amount they are behind, usually by an agreed upon date. A reinstatement is often in conjunction with forbearance.

4. Repayment plan- The lender gives the homeowner an agreed upon period of time to repay the amount they are behind by combining the homeowner’s delinquent portion along with their regular monthly payment. At the end of the repayment period, the homeowner should then be current.

5. Refinance – Refinancing requires income, credit and equity to support a new mortgage or deed of trust. If your current income cannot pay your present mortgage, it may be difficult to convince another lender to offer you a loan with a reasonable interest rate. Based upon the tightening of qualifying criteria for loan applications, refinancing in today’s market is becoming less and less of a viable option. It goes without saying that the only reason to refinance is to lower your monthly payment.

6. Short-Refi – This is the latest trend for lenders in working with delinquent borrowers to avoid foreclosure. The lender agrees to refinance the home with a reduction in the principal balance. Sometimes the lender will also reduce the interest rate as well on the new loan. The borrower needs to provide proof of a “hardship” and fully document the ability to pay the new mortgage.

7. Short Sale- If the sale proceeds are less than the total amount owed to the lender, the lender(s) may agree to a short payoff or “short sale” and write off the portion of homeowner’s mortgage that exceeds the net proceeds from the sale.

8. Deed-in-lieu of Foreclosure – If the homeowner agrees to voluntarily transfer title of the property to the lender in exchange for cancellation of their mortgage debt, the lender may agree to a deed-in-lieu of foreclosure. In most cases though, the homeowner must attempt to sell the home for its fair market value first (at least 90 days before a lender will consider this option).  This option might not be available if there are other liens on the home, such as judgments, second mortgages or tax liens.

9. Bankruptcy – A bankruptcy may allow the homeowner to discharge some debt and reorganize others to keep the property. However, if a homeowner doesn’t or can’t make the house payment after the bankruptcy, the home is foreclosed on anyway. It is not recommend for real estate agents to list the property and try to negotiate a short sale while the homeowner is going through this process. Homeowners need to seek legal counsel if they want to pursue this option.

Contact me if you have any questions, or need a referral to a trusted professional such as a loan modification specialist or bankruptcy attorney.

10 Best-Kept Secrets for Selling Your Home

I read a great article on the BHG site on home selling secrets. I liked this article for many reasons. One of the most important tips, of course, is pricing it right. If it’s not priced right, then none of the other tips matter! I also really enjoyed this tip:

Selling Secret #1: The first impression is the only impression
No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression…

To see the rest of these great tips, click here, and happy selling!