Posts Tagged 'mortgage'

Experiencing a Purchase from a New Perspective

What I am leaving!  This is the hard part of moving.

What I am leaving! This is the hard part of moving.

In my last post I mentioned that I am in escrow on a home.   This is no minor perturbation to my life and I am having many mixed emotions.  I am excited – I am overwhelmed – I am scared!  The real description of me is I AM A CLIENT!

The process started when I realized that I could probably purchase a home this year.  I have the income substantiated by my tax returns and I have money for a down payment (as modest as it might be).   Fortunately my credit scores are up in the area that makes me a “good bet” for paying things off.   The banks are starting to lend money to normal people again and the interest rates are so low that it is hardly a factor.  The prices of homes are going up rapidly and I have seen people delay their purchase until they can no longer afford to buy.  Those were the easy things to see.  The time to purchase is now.   The difficult part is that I do love where I currently live.  However, it is pretty far from work and I do not have a garage, dishwasher or bathroom large enough to turn around in.

I struggled with the decisions that must be addressed.  I cannot afford to buy much and less in Sebastopol than if I went to Santa Rosa, Rohnert Park or Windsor.  But I decided that being close to my friends and the places I love is more important to me than the size of the home, size of the lot or about anything else for that matter.  So like a good client, I made my “must have”  list.  I must have a garage.  I must have a dishwasher.  I must be located in Sebastopol, Forestville or Graton.  (Sorry, Occidental.  It is just too much of a drive right now.)  I must have a normal bathroom with a vanity counter.  I must have two bedrooms and a second bath would be fantastic.   I want at least 1200 square feet of living space.

With my list in mind, I started my search.  Realization #1:  There are no detached  homes in my price range.  Ramification #1:  a townhome in Sebastopol is the best that I can do.  What is the difference between a townhome and a condo?  They look the same but the townhome has minimal liability from the homeowner’s Association and therefore has lower HOA dues.

I made an offer on a home off Bodega Avenue.  I loved the exterior space and could live with the interior.  I adjusted to Realization #2: I am going to have a two story home.  This home was in my price range and move in ready.  There were seven offers and it went for $55,000 over asking with an all cash offer.  Realization #3: I may need to spend more than I want to get my “must have” list.  This was very disappointing.

Then I told myself what I tell my clients.  There is something better for you out there.  You must be patient.  I reacted about the same way my clients do – Sure, Barbara, I will spend every spare minute on the Internet looking for something better.  Call me every day so that I don’t spend my down payment on a new car to cheer myself up since I will never be able to afford anything.

But within a week another unit came on the market.  The outside space is not as good – in fact it is a tiny yard and a pretty drab exterior – but the interior space is dynamite.  I could see where my furniture would go.  Not quite move in ready but close enough to make it possible.  Better location than Bodega Avenue.   I immediately wrote my offer and got it submitted.  I offered $5,500 over asking.  And then the wait began.  I gave three days to respond.  At three days, no response.  I am getting nervous.  The rooms are getting smaller.  The stove is getting older.  The floor plan is getting less desirable.  Day 4 and still no response.  By now I am thinking – I really don’t like this place after all.  It is dingy and miniscule.   When clients call me asking if there is anything they can do to get a response sooner, I tell them that they need to be patient as the only real options we have are to wait until the seller responds or withdraw the offer.  This usually elicits a sigh of disgust.  I am now sighing – heavily.  Day 5, I get my answer.  My offer is accepted.    To me it seemed over 10 days.  I now have so much more empathy for my clients.

Gal pals are great for letting you know if you are doing the right thing.

Gal pals are great for letting you know if you are doing the right thing.

I immediately asked if I could go back to see the house and take Gail and Katy – before I even have inspections.  Clients do this all the time.  We walked into the living room and it was WOW!  Other than painting and that I want different flooring, the place is move in ready.  The stove is just fine and my furniture will all fit.  I am delighted.

How did I get this home over the other many offers?  I offered a bit higher than asking (it has appraised at that amount), I took less than 10 days to remove my inspection contingencies (I have the best inspectors), I accommodated the tenant and have a long escrow (71 days to be exact) and I have a reputation of getting the escrow closed.  Whatever really made the difference, I don’t know but I believe that I was meant to move to Sebastopol and live in this lovely home.  I am now 33 days from home ownership and delighted with the prospects of settling in.

Short Sale Senario in March 2012

It is mid-March and I am thinking, “Where did February go?”  I only managed to get three posts written and the last one was mid month.  I have not been vacationing or slacking – the real estate market in Sonoma County is on fire.

A great deal of my time these days is handling short sales – both as a buying agent and as a listing agent.  I get many questions about short sales and think it is time to write a primer for the uninitiated.

What is a short sale?   A short sale occurs when a home is sold that the sales price of the home is lower than the loans secured by that home.  In most cases today, the lien holders, usually banks, agree to take less money than they are owed instead of foreclosing on the home.  But the banks will do this only if they cannot get all of the money from the borrower.  The banks require a hardship and proof that the borrower cannot pay the loan amount.  If the borrower has sufficient assets to pay the loan down to where the sale will cover the loan, the bank will require payment in full.

How long does it take to get a short sale approved?  That depends.  And I really cannot tell you what it depends upon.  I have had a short sale approved in days and I have had one take over a year.  I recently heard that the average time for approval by the lenders on a short sale is three months.

Why does it take so long?   To the best of my knowledge, the process for a short sale starts either when the property is listed for sale or when an offer is accepted.  Different lenders have different guidelines as to if an offer is needed before they will accept a file.  If they do not accept files prior to receiving an offer, the process just starts later.  Once there is a file, it is put in a pile to be assigned to a loss mitigation officer.  This can take weeks.  Once it is assigned,  the loss mitigation officer examines the seller’s financial information and reviews the “hardship” letter.  Add at least a few more weeks for this to happen.  Most of these folks have hundreds of files on their desks so the first one in is the one they are working on.  If the seller is accepted as a short sale candidate, the file is passed on to someone else in the bank.  Again, it goes to the bottom of the pile.  When the file surfaces to the top, an appraisal is ordered which can take another few weeks.  The bank determines what they are willing to accept (this seems to go rather quickly) if it is the same person but if it goes to another department, it can take time to get to the top of the pile.  At some point during this process, the listing agent works with the escrow company to determine what the net proceeds will be based upon the offer accepted by the seller.  The document the escrow officer prepares is called a HUD-1.  The listing agent then prepares a package that includes the offer, the HUD-1, the seller’s financial information (updated), the buyer’s proof of funds to purchase and whatever specialized forms that lender may use including some government forms.  At this point, an acceptance can be issued.  After all of this waiting, the lender asks that closing happen in 30 to 40 days.  If there is a second lien, the whole process may need to be repeated with the second lender.

Why would I want to do this?  Good question.  With short sales becoming the preference over foreclosures, more and more homes are being sold short.  You may not be able to find the home you desire without considering a short sale property.  One benefit of purchases from an owner (other than from a bank after foreclosure) is that the seller must provide information on the home i.e. repairs made, nuisances in the neighborhood.  Banks are not required to provide this information.  There was a time that short sales were considerably lower priced than other sales but that differentiation has gone away.  Today the varying factor is the condition of the property.  Some short sale properties have not been maintained due to the financial hardship of the seller.  In those cases, you will find that the lower price is often below the amount it would cost to bring the property up to good condition.  This is why there is an active business of purchasing and remodeling homes – flipping is what it is called.

Who is the best buyer for a short sale?  The ideal short sale buyer is patient, can move quickly when the bank says to move and can is comfortable with not knowing what is going on.  If you are that person, you can have a great transaction.

How’s the Real Estate market in Sonoma County?

One of my goals this year is to post something about real estate once a week – and sprinkle in some Sonoma County lifestyle blurbs along the way.  All I can say is that I did not anticipate the rapid succession of events in the first month of the year.  The market is hot!  What do I mean by that comment?  I have been showing property and going on listing appointments ever since I returned from Hawaii.  Last week we had some much needed rain which did not slow things down.  On Sunday, January 22 with a playoff football game as competition, I had seven groups come through an open house in the pouring rain.  That may not seem like much but I did not advertise, put 4 signs out on the road and was out in Freestone.  This is remarkable.  Three years ago, I sat in an open house on beautiful days with 12 signs and never had a looker.

Enough of the excuses.  Here are the statistics for the last half of January (16 – 31).  228 single family homes went on the market.  75 were short sales and 69 were bank owned properties.  139 homes came back on the market.  This means that 139 contracts were cancelled – the buyers walked away.  Why?  It could be that they found something wrong in the inspection that they could not live with.  It could be that the 54 short sales that were cancelled was due to the bank taking so long to approve the sale or the property could have been foreclosed upon while waiting for short sale approval.  37 bank owned properties didn’t go on to close.  Maybe the buyers could not qualify for the loan.  Whatever the case, this is a significant number of buyers not continuing with the sale.

On the other end of the spectrum is the 522 properties that went into contract.  172 were short sales and 88 were bank owned.  That is a lot of properties (359) that are regular sales where people have equity in their homes.  That is almost 70% of the properties going into contract are not short sales or bank owned properties.  This is a wonderful statistic to me.  Buyers are making offers on homes that do are not in distress.  The bad news is that for sellers, there is no longer a premium in price for these sales.  The good news is that these properties are selling.

Speaking of sales, 228 properties sold during this time.  88 of these sales are regular (not short sales or bank owned).  75 are short sales and 69 are bank owned.

For those properties that are sold in the first 30 days of being on the market, the sales price is very close to the asking price.  Non-stressed properties sell at about 96% of the asking price.  Short sales are sold at 98.6%  of the asking prices.  Bank owned properties that sold in the first 30 days sold at 104.7% of the listing price.  All this says to me is that property owners that are not under stress ask more than the sellers with properties that are under stress.  Banks price to sell and short sales go for a bit under the market value.

The bottom line is that there is a small margin on price for a short sale.  The cost is the time of uncertainty that goes with a short sale.  I attended a seminar on short sales this last Monday.  The one real takeaway was “Don’t confuse a bank with logic.”  Everyone asked why the banks do not respond or make decisions more quickly.   The answer had to do with the large number of files each negotiator handles.  I get a bit frazzled when I handle more than four files.  They were talking about ninety files for each negotiator.  That is staggering.

We are dealing with a very complex real estate market.  There are many buyers and sellers but all are looking for a great deal.  This is a great market.  If you are a buyer you will get a great deal.  If you are a seller, there are buyers out there.    Patience on both sides are what is needed to make a transaction happen.

New Homeowners in Santa Rosa

Today was one of those days when I love being a Realtor.  I was able to pass the keys to new owners.  The experience is even better when the owners are first time home buyers.   Don’t get me wrong – I like giving the keys to retirees, second home buyers and folks new to the area.  It makes all the phone calls, bank delays and inspections worthwhile.

Celebrating with a little bubbly!

I met Katie a couple of weeks before she and Justin were married.  They were looking to start their home search when they returned from their honeymoon.  I called Katie a week or so after their return.  We met to discuss the process of purchasing a home and to define what type of home they wanted.

First step – they were qualified with Redwood Credit Union for a loan.  Second step – I identified a number of homes that might meet their needs.  Third step – we went out looking at houses.

Katie and Justin were wonderful clients.  When we visited a home, they were forthright with their reactions and what worked and didn’t work for them at each house.  I was quickly able to ascertain what they really wanted.  When a vintage 1920’s home in central Santa Rosa came on the market, I emailed Katie immediately.  Bingo!  This could be the one.

Thinking about the floor plan, the neighborhood, the condition of the house, will the classic car fit in the garage . . . . . .

The offer made.  The escrow open. The inspections done.

The house is now a home.  The Wedgewood range will be producing great meals and the back deck will be the venue of great gatherings.

I love my job!

 

Missing a Mortgage Payment?

One of the many benefits of being a real estate professional is the abundance of information that passes to me.  The article below is from the Wall Street Journal and answers a question that I am often asked.  “Why should I not just walk away from my house and let the bank foreclose?”  There is not a simple answer to this question.  The discussion has to include hardships  that impact the person’s ability to pay and the impact on their ability to recover from the loss of good credit.   I have helped homeowners gracefully exit from a mortgage that is beyond their means.  It is not pleasant but it is less painful than a foreclosure.  Read on.

GETTING GOING: HOW TO WRECK YOUR CREDIT – WSJ.COM

Don’t underestimate the harm that even one missed mortgage payment can do to your credit score—especially if you had good credit to begin with.

The severe consequences underscore that you shouldn’t shrug off even an accidentally missed payment. Instead, you should pay it and call the lender right away, begging for forgiveness before it mars your credit record.

In an unusually specific commentary to lenders, Fair Isaac, the creator of the FICO score, recently spelled out the severe consequences to the credit scores of borrowers who are 30 days late on their mortgages—as well as the long-term impact of failing to repay the whole mortgage.

It isn’t a pretty picture.

Being 30 days late on a house payment—even if it is an accident—can knock 100 points off a pristine 780 credit score, moving you from qualifying for the very best interest rates to the edge of subprime territory.

The actual numerical drop is less severe if your starting credit score is 720 or 680, but the impact is greater, since your new score is likely to sink to a level where new credit is hard to get and very expensive.

The FICO score ranges from a low of 300 to 850, with scores of about 750 or higher generally qualifying for the best loan terms.

The details provide a warning for anyone whose home is way underwater and is tempted to simply walk away, or considering a “short sale.” That is when the sale price is less than the amount you owe and the borrower doesn’t make up the difference. More than 350,000 homes have been sold this way since 2008, according to the Office of the Comptroller of the Currency.

FICO officials usually dodge questions about the specific impact of actions on scores. But Joanne Gaskin, director of FICO mortgage markets, compiled the data partly to counter incorrect information, such as recommendations that people stop paying their mortgages so they can negotiate with a lender, she says.

FICO says a foreclosure or short sale where the size of the unpaid balance is reported are equally devastating to a good or excellent credit score, reducing it by as much as 150 points, to the high 500s or low 600s. A rarer “deed in lieu of foreclosure”—in which the borrower voluntarily transfers ownership of the home to the lender—may have less impact on an excellent score.

Recovering your original score takes about seven years. That also is how long the information stays on your credit report, where insurers and potential employers can see it. Returning to a mediocre 680 score may take only three years.

Here are some other lessons from the data:

GETGO

Your past behavior counts, but your current behavior matters more.

Credit scores are intended to measure the risk that you won’t repay a current or future debt. So your careful payments over many years translate into a higher starting score.

But your score takes the biggest hit of all when you are 30 days late on a payment, falling 70 to 100 points in the FICO example. It drops less when you are 90 days late and if you default. The reason? The first missed payment “captures a good deal of the risk of the consumer,” Ms. Gaskin says.

The best way to rebuild a damaged credit score, ironically, is to use credit.

Avoiding borrowing altogether means “you’ve frozen your credit history in a negative state,” says Maxine Sweet, vice president of public education for credit bureau Experian. You will be better off using a credit card judiciously and paying it off promptly, adding good-behavior points to your record.

A rotten score hurts more than you think.

A person with a 620 score would pay almost 12% interest on a four-year $25,000 car loan, compared with less than 5% for someone with a 780 score—a difference of almost $4,000 over the life of the loan. On a 30-year fixed-rate $250,000 mortgage, a person with a 620 score might qualify for a 6% rate, but probably wouldn’t be able to get mortgage insurance, which is required if your down payment less than 20%. A person with excellent credit might land a rate less than 5% and pay about $3,000 a year less

Written by karen.blumenthal@wsj.com

June in My Wine Country Village

  

Graduate Taylor with her Proud Parents

June is the month of graduations, weddings and moving.  At least this year I experienced the graduation tradition thanks to the lovely Taylor who graduated from Christian Brothers High School last weekend.  The following day party brought together  family and friends for a delightful warm day in Sacramento.  One of those days that you expect in June with enough sun to get the boys in the pool and the rest of us searching for shade to keep cool. 

No weddings on my social calendar this year.  Probably a good thing since I am fully experiencing the opposite and could be less than upbeat at such an occasion. 

And, while I moved months ago, I am still in the final stages of moving.  The house on Conor Court was to have closed today but, alas, the loan did not go through and the buyers are trying a different bank.   (Read my post of May 18 on banks these days.)  We are now looking at June 24 for the close of escrow. That would be quite a birthday present.  I am not discouraged as this will happen and other movings are happening.     

Florence Avenue - with The Rabbit by Patrick Amiot

 A cute little yellow house on Florence Avenue in Sebastopol has new owners.  It is darling and will be transformed into a wonderful oasis by my friends and clients, Anne and Simon.   Florence Avenue is famous for the delightful sculptures by resident artist, Patrick Amiot.  I did an Artist Profile of him some years ago.  I will post it in the next few days so that you can learn more about Patrick.   Today I am off to San Jose for inspections at a condominium that will make a wonderful home for a young family.  New properties are coming on the market daily and there are buyers eager to find their perfect nest.  I showed property for the last two days and have other showings scheduled throughout the month of June.  It is the time when real estate is hopping.  Many people are anticipating an uptick in home prices but I am still seeing substantial price pressure.  Loans are still difficult to get even though the interest rates are remaining low and 95% loans have returned.  It is a good time to buy.  If you are planning on buying, it is a good time to sell.  The market is the market and you have to do what you have to do. 

What June 4 Should Look Like! The Forestville Parade Judge's Stand 2009

The weather forecast is rain for this afternoon and it is quite foggy as I look out the window but June is shaping up to be a great month.  The rainwill be gone for the year and sunny skies will be with us for the coming months. Tomorrow is the Forestville Youth Park Parade and Barbeque.  It is always great fun but I will not attend this year due to my commitments in San Jose.  I am sure it will be wonderful without me.  I love summer in Sonoma County.

Life Goes On!

Much Ado About Nothing - at the Apple Blossom Parade, Sebastopol

  

Where have my days gone?  About three and a half weeks since I last posted here.  What is happening?  I have experienced the Apple Blossom Parade (of which I have about 100 pictures) – I have driven to Los Angeles for a Beachbody Summit (where I discovered a new workout that I am about to start, RevAbs) – I have officially christened my new home with a house-warming party (I must write thank you notes to all those who wished me well by helping me celebrate).  On top of that, I have been holding together 3 escrows which is a time consuming activity in this challenging economic environment.  What is quite interesting to me is that the number of visits to this blog has continued to grow even though there is no new content.  Very interesting – at least to me.  In response to those interested readers, I am inserting some new comments on life and real estate.  

I have received some “constructive” feedback that I seem to only talk about things that are good, positive and in some way uplifting.  I guess that is my nature.  But in response to this comment and in full disclosure, I must say that I am completely disgusted with the state of our banking industry.   

Two of my open escrows are short sales.  One is waiting on a response from the lien holder on a price increase that they requested.  Yes – they requested a $2000 price increase which we responded to in short order and now we are a week later and have not gotten their acceptance.  Why does this take so long?  Believe me, this is a rhetorical question.  I have learned to not expect answers.  The other of my short sale escrows is about to fall apart.  The lien holder is unwilling to wait a few extra weeks for my client to get his loan together.  Here is a deal that would definitely close with FHA financing in another four weeks and the Chase short sale negotiator is willing to nix the whole thing because they have decided that it must close in May.  No, there is not another buyer in the wings – No, they do not think they will get more money if they put it back on the market.  They will probably foreclose on the property and lose another $50K to $100K in the process – but they do not want to wait for my client’s loan to be funded.  Tell me why this is good business?  Oh!  I don’t expect an answer to that question either.  

Loans are taking inordinately longer times to get approval and then to fund.  The one normal (I use that term with trepidation!) transaction that I have in the works is teetering on a loan approval on the house that must be sold before my escrow can proceed.  Nothing big in the way of approval but time consuming anyway.  The bank does not seem to understand the term “time is of the essence.”  

Moving On - Apple Blossom Parade, Sebastopol

  

So I have expressed my angst.  It is a reflection of our current economic situation.  It is something to consider if you are contemplating a home purchase or sale.  I don’t know if my venting on banks is refreshingly different than my usual posts.  I do feel a bit of relief from stating my frustrations.  

My own home is now in escrow and we are waiting for the inspections to be done and the loan to be approved.  I hope that it closes in the time stated in the contract but I know that there will be issues.  I just want it to be sold, a week or two will not make much difference.  

In the next week or so, I will update on RevAbs and Moving Vol. 3.  Life does go on and I am trying to make the most of it.

What is happening in Real Estate?

The last few months I have been talking about moving and vacation and tsunami warning but not much about real estate.  The appearance is that nothing is happening in real estate or I am just not participating.  Appearances can be misleading!  I haven’t been writing about it but real estate is consuming most of my time – which is only fitting since it is the business I am in!

The sales of foreclosure properties is going to be with us for a long time.  Many homes that have reverted to bank ownership are still to hit the market.   Banks are continuing to hold back putting homes on the market that will flood neighborhoods with inventory and therefore drive the prices lower than they are today.  The low end (under $300,000 here in Northern California) had shown signs of firming but there are properties still coming on the market that are indications that we may see another price reduction.   The heavy rains of 2010 have had an impact on buyers willingness to go out looking but even with the inclimate weather, homes are selling.

Last week clients closed on a three bedroom/ two bath home in American Canyon for $325,000.

Over the last nine months, I have been working with 2 sets of buyers who could not get their offers accepted due to the multiple offers for lower priced homes in San Jose.  Today both are in escrow.  This came about through dedication to finding a way to make things happen and creativity in financing. 

One buyer is looking for either a home or condo under $200,000.  This was unheard of just two years ago but today there are many.  The difficulty for my client is one of beating out the cash investor.  With 60% down payment, he could still not get an offer accepted.  The first hurdle was that he did not have a credit rating.  You heard correctly – he did NOT have a credit rating!  Here is a person with no debt and a good chunk of change but no bank would lend to him.  Working with an ethical and hard working mortgage broker, he was able to establish a credit rating by the use of past rent and utility payments, making routine charges and payments to a credit card and being added as an account holder on one of his parents credit cards.  The first is a pretty safe and straight forward action but is not always successful in getting the credit established.  The second is simply a demonstration to the credit watching services that if he charges something, he will pay for it.  The third is a bit touchy as there needs to be a balance  maintained between income and debt.   To establish or improve a credit rating (called a FICO score) you should follow the advice of your mortgage broker carefully.

The second buyer was in a very different situation.  They each have steady jobs with regular paychecks and excellent credit.  But they have a modest nestegg to use as a downpayment and for closing costs.  FHA financing is their only option with the 3.5% downpayment.  With a maximum purchase price of $280,000, many homes are listed on the market but homes in this price range receive multiple offers from all cash investors.   Agents are writing all cash offers for much higher prices than the home will appraise knowing that when the appraisal comes in, they can lower the price.  This totally takes the first time homebuyer out of the market.  The approach we took to get into contract was to locate a home that was in need of major repair in a very good neighborhood and make the offer contingent upon getting an FHA 203K rehabilitation loan.  We located a home that was built in 1901 and has been “improved” over the last century.  Specifically, there are two small additions without foundations.  This “feature” makes the home unattractive to either a buyer who wants to immediately begin cash flow by renting or a buyer who is getting a conventional or normal FHA loan. 

The FHA203K loan program provides purchase money for the buyer plus the needed funds for making repairs and upgrades so that it qualifies for an FHA regular loan.  A licensed contractor must provide a bid for the work and the payments to the contractor are administered by the lender and a 203K consultant to insure that the work is satisfactory to the buyer and that the contractor is paid.  Yes, it is a lot of work beyond a normal purchase – but the homebuyer will have a home that is safe, not in need of repairs and meets their living needs.  It is a great program that is being utilized more than in previous decades.

Putting an FHA 203K deal together is not for the faint of heart.  In preparation for this approach, I became certified as a 203K Specialist by RE-Build USA.  This is a training on the FHA process and an introduction to the people who can make it happen.  I am pleased to  partner with Pollie Barnes of Prospect Mortgage and Wells Fargo Bank in this endeavour.    Feel free to ask if this loan program can be a way for you to get your dream home.

What about those Foreclosures?

Last night I was chatting with my son and daughter-in-law over the best chili relleno in San Jose about the current reality of getting into contract on a less than $250,000 priced home.  My son quoted a news story that 13% of all mortgages in the USA were either in foreclosure or had been foreclosed on.  I found this statistic unbelievable.  I stated that I just didn’t see how that could be.  Foreclosures are a huge part of our real estate business right now but to say that 13% of all mortgages were in foreclosure seemed excessive.  When I got to my Google page, I saw the real story – 13% OF ALL MORTGAGES HAVE MISSED A PAYMENT.  Okay, that seems a bit more realistic but didn’t feel real.  The article broke down the numbers as 9% had missed payments and 4% were in foreclosure proceedings.  That still seems to be way off from my experience.  Another statistic which I found on the fdic.gov website was that 1 in every 200 homes will be foreclosed. While that is huge if you are the 1, that is no where near 13%.  This would calculate to more than 85% of the homes in USA not having mortgages.  That doesn’t seem realistic either.   What is it that Mark Twain said?  “There are lies, damned lies and statistics.”  I don’t know how to reconcile these statistics but I can look at this from a different approach.   I decided to examine some sales figures to work with facts instead of feelings.

Closest to home is Sebastopol.  In the last six months 109 homes have sold in the “Sebastopol” area.  That area includes Freestone, Occidental, Graton and the lands around them.  Of those sales, 22 were bank owned properties referred to as REOs and 5 were short sales.  A short sale is when the sales price does not cover all of the liens.  These are short on funds but not in time.  A short sale can take up to a year to complete depending on the bank and circumstances.  Either an REO or a short sale is considered a “distressed” property.  That makes 25% of the sales being destressed properties.  This is higher than I had expected because of the 119 currently active listings only 6 are REOs and 3 short sales.  The REOs are all under $500,000 list price and the short sales are all under $800,000.  Of the 37 homes in escrow, 6 are REOs and 12 are short sales.  My interpretation of this data is  that while there are many homes on the market that are not distressed, the ones most likely to sell are the distressed properties. 

In Sonoma County, Sebeastopol is one of the less distressed markets and Rohnert Park is one of the most distressed markets.  There are only 37 properties active in Rohnert Park.  11 of these are REOs and 14 are short sales.  The highest asking price is $625,ooo.  In the same 6 month period as quoted for Sebastopol, 238 sales have closed in Rohnert Park.  Of those 238 sales, 114 were REOs and 55 were short sales.  105 homes are in escrow with 75 being short sales waiting for bank approval.  I wrote an offer for a client in February and we are one of those 75 still waiting for an answer.  The stark difference between these two markets is why national statistics are so difficult to decipher.  

Bottom line on all of this is that there are a great many distressed properties on the market and they are the ones that are selling.  Short sales are closing behind REOs due to the long approval process with lien holders.  It is a sad time for homeowners who are losing their homes with the counterside of first time home buyers bringing their dreams to fruition.   The high percentage of distressed property sales has impacted the selling prices for those homes that are not distressed.  This is good news for the conventional homebuyer.   Economic forecasts are positive this week but I don’t know what statistics are being used for that prediction.  In my mind, this is a wait and see environment.

Divorcing Homeowners Beware – What You Don’t Know During Your Divorce Will Hurt You More, Long After.

The family home is usually the most valuable asset in divorce. However, when dividing your marital property, appraisal minus mortgage does NOT equal equity. This incomplete equation leaves your house over-valued and that works against you.  In addition to the inaccurate and unfair division of your property, you risk damaged credit, default, foreclosure or even bankruptcy without more real estate due diligence much earlier in your divorce process. 

Barbara Shula, real estate sales associate with Prudential California Realty have completed course work to earn the RCS-DTM designation as Real Estate Collaborative Specialists – Divorce™.   

An RCS-D™ REALTOR® ,Barbara are professionally trained to neutralize divorce real estate as a business transaction in the best interest of the house – and each divorcing spouse.  Leading your divorce real estate team, Barbara also serves as project manager working with you and your lawyers and can refer real estate and financial professionals specializing in divorce to assist with essential evidence of your house value.  Such additional evidence is needed during your divorce process, especially before any property negotiation or mediation. 

 This course is approved for continuing education credit by the California Department of Real Estate.  This course was written and taught by Kelly Lise Murray, J.D. & Wendy Waselle.  Professor Murray earned her J.D. cum laude from Harvard Law School & currently teaches Legal Writing & Research at Vanderbilt Law School.  Co-Instructor Wendy Waselle has a Masters Degree in Education & created the Fix’n 2 Stay or SellTM   home staging program.  Professor Murray & Ms. Waselle co-created Divorce This House™ TV on Nashville’s ABC station, Channel 2, providing FREE expert advice to divorcing homeowners.

 You may contact Barbara @ bshula@comcast.net or 707 824-4574 to discuss how you can protect one of your most valuable financial assets during the stressful time of divorce. Whether your divorce is completed, just beginning or somewhere in between, Tom and Barbara can help you determine your best options now for a stronger financial future.


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