Home Sales up in September

In the month of September, homes sales in California were up 6.7 percent. Those looking for bargains were purchasing foreclosures while the median home price fell. In September, the median home price was $249,000.

Homebuyers were buying up foreclosures making sales go up 6.7 percent. Sales figures on the other hand, were still below average for the month of September for the Bay Area and southern California. DataQuick, a real estate information service home in San Diego revealed that home sales were lower than the figure seen in August, which is down 6.2 percent with a total of homes sold at 35,404 in September.

The median home price in September for September was $249,000, which is down 6 percent from what was seen in 2010 and the same as was seen in August of 2011. This is the 12th continuous year over year decrease in the median price. This means that many of the homes sold for half or less than what the home was worth.

DataQuick president, John Walsh stated the number of potential home buyers was growing but the demand is not seen in the numbers yet.

He stated, “Empty-nesters want something smaller, growing families want something bigger,” and went on to say, “People still die, they get married, retire — all of this generates demand. And only a fraction of that demand is being met in today’s market.”

A large amount of the homes that sold in September were foreclosures along with short sales in which the bank sold the home for less than the mortgage. The figures show that more than half of the homes that sold in California in the month of September were foreclosures or short sales.

The figures showed around 33.8 percent were foreclosures down from the 34.3 percent seen in August and 35.6 percent seen in September 2010. Reports showed 18.7 percent were short sales, which is up from the figure seen in August of 17.5 percent and 15.6 seen in September of 2010.

Home sales in southern California were up 0.3 percent from September 2010 but were down from the 7.7 percent seen in August of 2011 bringing the figure to 18,149. The median price for southern California fell 5.2 percent from 201o to $280,000 and only up 0.4 percent over the August figures.

The Bay Area saw home sales increase 6.6 percent from 2010 but down from the figure seen in August to 6,749. The median price for the area decreased 7.6 percent from 2010 and was also down from the month of August to 365,000.

 

Short Sales Growing in Popularity

Short Sales can save borrowers that are underwater as long as everyone agrees. Short sales are for homeowners that want to avoid foreclosure or for those looking for a great bargain, if all goes to plan.

Short sales are transactions in which borrowers owe more on their mortgages than their homes are worth, known as underwater, where the lending company agrees to a discounted payoff. In San Diego County 18.7% of the home resale market for the month in June was short sales, which is up from 2% we saw five years ago, states local real estate tracker DataQuick.

Short sales are growing, however, the process of the closing take time, is uncertain, and changes all the time, which can hinder interested parties.

Kurt Wannebo, a San Diego broker that has over 6 years of experience in short sales stated, “Short sales are changing all the time,” and went on to say, “The banks change their processes all the time … and there are new laws and new short-sale government programs.”

A new state law that was signed in July is meant to help protect short sellers may make the process even longer, more uncertain, and cost the seller more.

Who should use a short sell?

In most cases, those that opt for a short sell are ones that can no longer afford their mortgage and want to walk away as their investment is no longer there.

Shelia Brady and her husband purchased a condo in Rolando for $285,000 in 2004; the condo is now in escrow being sold as a short sale for $120,000. The couple not only lost value but also was behind on their house payment due to surgery that stopped her from working for 2 ½ months while her husband has been unemployed for 2 years.

Why would this couple use a short sell instead of letting the foreclosure process take over?

“You have such a strong moral obligation toward your mortgage,” Brady said. “You sign a document saying, ‘I will do this.’ ”

Greg Ives, 33, purchased a downtown San Diego condo at the Hard Rock Hotel to be used as a rental investment for $405,000. The value on the property depreciated and the amount he could charge for rent depreciated. Once he paid his mortgage, he found he was $1,000 under for several months. He filed for a secure loan modification but was denied, he then decided on a short sale. After five long months, the deal closed. He still owes the lending company and will have to pay $340 per month for the next ten years. He stated that his best option was a short sale. “I’m grateful to be done with it,” Ives said.

For any questions regarding selling your property via a short sale or if you are interested in a buying a short sale property, contact one of our expert real estate agents in the San Diego area.

San Diego Real Estate Trends

Over the past couple of weeks, there are all kinds of numbers coming out of San Diego.

Downward trends showed that San Diego County homes decreased 8.7% in the month of January from what was seen in the month of December. The home prices and sales in Southern California from a month over month basis also dropped. The average 30-year fixed mortgage rate in the Unite States dropped to 5% with a previous 5.05% reported only a week before. Rates are still very low historically.

Upward trends in San Diego County showed that sales of million-dollar homes in the county in 2010 increased marking the first annual increase since 2005. The most-expensive sale was in Coronado, at $10.5 million. The homes in the million-dollar range increased in Southern California, which has not been seen in practically five years.

Looking to the next week
DataQuick will release their January foreclosure figures on Tuesday. The U-T announced that mortgage defaults and foreclosures for San Diego County decreased to the lowest level seen in the past three years. On the other hand, economists are expecting to see more foreclosures this year than last.

Freddie Mac will release their weekly average for mortgage rates on Thursday. The long-term rate dropped to 5% last week.

Bjarke Ingels, Danish architect will be giving an invite only lecture to NewSchool of Architecture and Design students at the Museum of Natural History in Balboa Park on Friday. According to FastCompany.com, Bjarke Ingels is among The 100 Most Creative People in Business 2010 and will discuss how “the evolution of political, economic, and social issues in today’s society is manifested in architecture designs,” stated Maria Velez, a spokeswoman for the design school.“ Bjarke’s architectural style is inspirational and mind-stretching,” said Steve Altman, president of the design school that is hosting the function. Ingels also will discuss “Yes Is More: An Archicomic on Architectural Evolution,” his new comicbook-style book that weaves humor into design.

How to Raise a Credit Score

Millions of Americans are now among the list of those with falling credit ratings due to house prices falling, foreclosures, bankruptcies, and long-term unemployment. There are a few factors that will affect your credit rating along with the steps to improve your rating.

Bankruptcy – both Chapter 13 or 7 – is the worst thing that can be placed on your credit report and once it is there it will take somewhere between 7 to 10 years to fall off the report. If you are involved in a foreclosure, deed-in-lieu, tax lien, or short sale, this will also lower your credit score. If you are in a rough patch and you are pay a bill thirty days late your credit score will drop quite a bit and if the payment is 90 to 120 days late you will notice a larger decline.

In order to improve your credit rating, you need to pay your bills on time. The last two years reports are the most important which will be calculated as 35 percent of your credit score. Do not apply for credit if it is not absolutely necessary. This will also lower your credit score, as it is a sign that you are taking on more debt.

When you have credit cards or other forms of credit, do not use more than 50 percent for any current account as well as focusing on reducing the credit card balances before paying off the installment debt such as car loans and student loans. Credit scores track the oldest account along with the average age of all the accounts combined. Longer credit history will help raise your credit score, so do not close out accounts that have a long history, as they are the most important.

The credit scored is a fluid number that changes often. Consider using an online credit monitoring service that will provide you with access to your credit score and credit history at any given time.

This Weeks Featured Properties

This Weeks Featured Properties

Welcome to our featured homes in the San Diego Area!

This 8 bedroom, 7-bathroom home in La Jolla is 10000, which is perfect for the growing family. The lot size is .5 to 1 acre and has enough parking space for eight vehicles. The three story home has magnificent views of evening lights, the ocean, and panoramic views that will certainly make every member of the family happy with their new home.

If you are looking for room, the master bedroom is 32×15, while other bedrooms measure 34×30, 18×25, 30×23, and 22×11. Looking for a very nice sized kitchen? Then you will love the 30×19 space. Other great features of this home include six fireplaces, above ground pool, patio, central forced air-cooling system, electric, natural gas, and a laundry room.

Our next featured home is in Del Mar offering six bedrooms, eight bathrooms with 6551 square feet built in 1984. The views from this home are wonderful ocean views and panoramic views. The lot size is .5 to 1 acre. You will love the two story with plenty of room for all kinds of family activities. The master bedroom is 21×15 with other bedroom measuring 10×15, 12×11, 15×12, and 11×15. The family room measures 21×20, living room is 20×25, dining room is 15×11, and kitchen is 22×25. You will love the below ground pool offering private and lap and fireplaces in the family room, living room, and master bedroom. It even offers a detached guesthouse.

If you would like a tour of the home in La Jolla or Del Mar you can contact a realtor to see if either could be your dream home. Of course, we have a wide array of homes that may just be your dream home. Just by contacting one of our real estate agents, you will begin your search for the perfect home within your price range.

What Are Discount Points?

If you want a lower interest rate, you can pay fees to a lender to buy a lower interest rate with the fees known as discount points and the process called a rate buydown. The result will be a lower mortgage payment each month for the life of the loan.

One point is equal to 1% of the amount of the loan, which will be paid at closing. This means if your loan is $150,000, the fee would be $1,500. In the majority of cases, one point will lower the interest rate somewhere between .25% to .375%, according to the type of loan you are getting.

If you are wondering if it is a good idea for your customers to purchase discount points, a few factors need to be considered. If your customer is only planning to be in the home for under four years, will refinance in a few years, or is applying for an adjustable rate mortgage it is best to stay away from discount points.

Discount points are normally a great idea if the family buying the home wants to live in the home for at least five years and does not have any plans to refinance for several years into the future.

When discussing discount points with the home buyer it is a good idea to show them a break even analysis. The way you do this is by calculating the mortgage payment they will pay each month without any points; next take away the mortgage payment they will pay monthly. The difference is the money they will save. Now, divide the cost of the discount points by the money they will save and the answer is the number of months it will take for them to break even.

Another great factor of discount points is that as long as they were used to purchase residential property they can be deducted from the taxes in the year the home buyer pays the fees. Discount points are also available during refinancing and are deductible over the life of the loan. Of course, the home buyer should speak to their tax advisor to learn more about the deductibles associated with discount points.

Using Renovation Loans to the best Advantage

While you are showing a home that needs a bit of tender loving care, the best approach is to provide your clients with information on the FHA 203K renovations loans. The loans are great for those looking for a bargain that have their heart set on a fixer upper or even on a foreclosure that needs repairs prior to moving in or even for a homebuyer that wants to add on another room.

Renovation loans will provide homeowners with the money they need to buy a home as well as all the renovation necessary. This means there will only be one loan application, one group of fees including closing costs, and only one mortgage payment each month. While in closing, the money for the home will be used to pay for the home, while the rest of the money intended for renovation will be placed in a trustee account and provided as all repairs are finished. For this type of loan all kinds of improvements can be done that will add more value to the home including new carpet, landscaping, room addition, roof, plumbing, or an updated kitchen. Along with this all energy efficiency improvements can also be used for a renovation loan as well as qualifying for tax credits found in the new stimulus package.

One more advantage of a renovation loan is that the loan amount is based on the value of the property after all the renovations are finished. Other great reasons to look at this type of loan include the down payment, which can be only 3.5%. In many cases, the loan may even offer a lower interest rate than you could receive from a second mortgage and all improvement costs can be spread out over the life of the loan. If you cannot live in the home until renovations are complete, the loan can even provide financing up to six months until the home is livable.

Just understanding what your clients can receive with renovation loans will certainly help your clients when they fall in love with a fixer upper.

Negotiating Your Purchase

Do you have dreams of the perfect home with all the amenities you desire but do not know what you can do to make it yours? When you are ready to start negotiating, there are a few tips that you should remember.

Be Self-Confident – Never trust what someone says and always have questions. If you do not agree with a statement, say something. Buying a home is a very important decision and a large financial responsibility. Always understand what you are getting and for how much.

Never act eager – Eagerness is a sign of weakness. If the Realtor and the lending company know you love the property so much you would do anything to own, you are in trouble. Always act nonchalant and ready to walk away from the deal if they do not listen to your desires.

Patience – Always have patience. Being impatient is just as bad as appearing too eager. If you want that dream home, you have been for quite awhile and you can wait just a bit longer to ensure you get what you want.

Listen – Too many times, emotions get in the way and Home-buyers do not listen. You should know all there is to know about a property before you considering buying. There could be second mortgage, the roof may need replaced, or a whole bunch of other surprises that you will learn about if you do not listen.

Be prepared for long negotiations that can be overwhelming at times. Just remember to take your time, think every action through before committing. In most cases, the seller is eager to sell so you can take your time to ensure you get what you want as long as it is reasonable. Another buyer may come in to purchase as long as the home is left on the market. Negotiations are your best bet but do not expect that every small thing will be handled as another buyer may take the home as is.

Court Decisions Favor Realtors

Court Decisions Favor Realtors

In the news this week are two California court cases in which a real estate broker received due compensation under the California Association of Realtors buyer/broker agreement and the other case in which an attorney was penalized for asserting frivolous accusations against a broker.

Schaffter versus Creative Capital Leasing Group is the first case. In this case, the buyer in 2002 signed a CAR buyer broker agreement in which the buyer agreed to compensate the broker for contracts for the purchase of 16 new units in condo developments. The buyer closed on eight of the transactions, however, went into default on the other eight contracts. The broker was not given his compensation when the buyer and seller agreed to return the deposits back to the buyer except for $1,000.

The broker sued the buyer for all unpaid compensation for all of the 16 transactions. In this case, CAR submitted an amicus curiae or “friend of the court” briefs to support the broker’s position in the case. The buyer on the other hand used the agreement he had with the seller to prove his case explaining the transaction to default on eight of the contracts was done between buyer and seller, thus no compensation was due the broker. The court, however, disagreed with the buyer and agreed with the CAR agreement and stated, “As CAR explains in its amicus brief, the ‘default’ provision of the Buyer Broker Contract recognizes that when a buyer defaults under a purchase agreement, it would not be fair to deny the broker the right to be paid for services rendered under the Buyer Broker Contract.  “The seller’s post-default conduct is, of course, immaterial to determining whether the buyer defaulted.”  The court awarded the broker the compensation for all 16 contracts along with all attorney and court costs.

The next case was Fields versus Sycamore Ventures. This court case centered on a buyer that after buying a new home found mold and leaky pipes. The buyer upon finding this discovery filed a lawsuit against the broker with 18 legal claims. The majority of the claims against the broker such as breach of warranty, nuisance, and trespass were without merit. The court agreed the claims were unwarranted and awarded the broker $13,500. The court will send their decision to the State Bar of California to decide if disciplinary actions are warranted against the attorney for the buyer, Miller Law.

Popular Ways to Buy Foreclosures

With so many foreclosures on the market and all the hype out there about making a fortune with foreclosures, just about everyone is looking to buy a great home at a much-reduced price. The problem is that most people do not how to purchase foreclosures or they become very confused once they start the process.

There are three popular ways in which to buy foreclosures – from the homeowner, at, from a local Realtor, or at a real estate auction.

Buying from the homeowner can be a wonderful way in which to purchase a home that is close to going into foreclosure. The main problem with this is that so many real estate investors wish to purchase the home for practically nothing and leave the homeowner out in the cold. The proper way to purchase from a homeowner is to make sure they receive at least a portion of their equity, buying it for the amount owed on the loan will give the homeowner nothing, except his credit rating. You can find homeowners that do not care about the equity but only wish to save their credit, in this case, and then you are not the one putting the homeowner out in the cold. In order to work with homeowners that are in trouble is to listen to their wishes. Some may only wish to receive enough money from the home sale to put a down payment on another home they can afford.

On the other hand, beware, with buying from the homeowner. You should ensure that they only have one mortgage and that there are not any other liens of any type on the home. You may find out that you bought more than you were ready for financially.

Buying through a realtor is probably the best way to buy a home in foreclosure, if you use a real estate agent that specializes in bank owned real estate property. If you purchase through a realtor you will have the time you need for checking out the home, have appraisals done, and home inspections. You will also receive a clear title; this means that there will not be any type of liens of the home. You will be purchasing a home just like any other home on the market only that it is owned by a bank instead of an individual.

The last way in which to buy foreclosures is through a real estate auction. These are homes that are now the property of the lending company and they were on the market, but did not sell. The problem with buying foreclosures at an auction is that there are several people there also bidding on the property. You must have cash in hand at the end of the auction if you win the bid. You do not have time to inspect the property and you may find that the home is need of expensive repairs once you have the title in hand.

If you do wish to purchase bank owned property, remember, banks are not in the business to sell real estate. Do not even try to find the person in charge to talk with concerning a property you wish to purchase. Find a good real estate agent that understand the process of buying bank owned property and you will soon have the title of the home in your hand.

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