Posts Tagged 'property values'

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.

Why I am looking for a home!

I don’t think I have ever posted someone else’s writing.  But this is so well said that I needed to post it for you.

me buyers face dilemma with shortage

Kathleen Pender
Published 3:28 pm, Saturday, March 9, 2013
  • The home at 2334 Clipper Street in San Mateo that received dozens of offers and sold for far above the asking price. Photo: Courtesy Claire Haggarty / NBT, NBT Realty Services

If you buy now, you might have to pay above asking. But if you wait, you could end up paying an even higher price and a higher interest rate if you need a loan. That’s because inventory won’t improve until prices rise enough to get more homeowners to sell and more builders to break ground.

The inventory shortage is especially acute in California. Of the 30 largest housing markets, the four with the biggest drops in homes listed for sale on Zillow in February compared with February of last year were Sacramento (48 percent), Los Angeles, San Francisco (41 percent) and San Diego.

Although listings are increasing on a month-to-month basis as the busy spring season gets under way, Trulia Chief Economist Jed Kolko predicts they won’t start rising on a year-over-year basis for a year or more.

An example of that: “In all of Millbrae, there was one listing two months ago. There are about a dozen now,” says Roger Dewes, a Coldwell Banker agent on the Peninsula. In a normal market, there might be 20. “We are not there yet, but going from one to 12 is quite a leap,” he says.

Experts cite five factors contributing to the inventory shortage:

— Fewer foreclosures are hitting the market. “California did a good job of disposing of its backlog” of distressed properties, says Zillow Chief Economist Stan Humphries.

In California, where most foreclosures are handled out of court, the process is taking about 11 months on average, according to RealtyTrac. In New York and New Jersey, where foreclosures go through a court proceeding, the process is taking 36 and 32 months, respectively.

— Many people still owe more than their homes are worth. If they sold now, they would have to come up with extra cash to pay off their loan. Although prices have rebounded from their lows, 23.3 percent of homes with a mortgage in San Francisco, San Mateo and Marin counties were still underwater in the fourth quarter of 2012, according to Zillow.

— Even if they are not underwater, many owners won’t sell for less than they paid. If they bought near the peak, it may take a while before they are ready to budge.

The median price paid for a new or resale home or condo in the nine-county Bay Area was $415,000 in January. That’s less than halfway between its low of $290,000 in March 2009 and its high of $665,000 set in June/July 2007, according to DataQuick.

— Many people, even if their homes are worth more than they paid, won’t sell because they are afraid they won’t be able to buy another house. “It becomes a game of musical chairs; they are afraid to get out because they can’t get back in,” Humphries says. This becomes “a self-reinforcing cycle” that keeps homes off the market.

— The housing bust put new construction on hold.

The shortage comes at a time when demand is rising in the Bay Area, not just from regular buyers but from investors, second-home buyers and foreign buyers, especially from Asia.

‘Heck of a wreck’

The result is stories like this: A 1,500-square-foot home on Clipper Street on San Mateo’s east side, advertised as a “heck of a wreck,” attracted 97 offers in the first eight days, says listing agent Claire Haggarty of NBT Realty Services.

The home was listed in mid-January at $375,000, which Haggarty considered “a little under market.” It sold for $510,000 in an all-cash deal with no inspections, no contingencies and a 10-day close.

At some point, prices will rise enough to shake lose more inventory, but it won’t happen immediately.

Based on what’s happening around the country, Kolko says inventory tightens fastest in the first 12 months after prices hit a bottom. “Everybody wants to buy at the bottom and nobody wants to sell at the bottom,” he says.

Real Estate Market in Sonoma County – Many Offers and Cash is King

On October 1 I entered 152 Firethorn Drive, Rohnert Park into the MLS.  After a week of constant showings and a well attended open house, I received 10 offers on October 8.  We accepted a full cash offer from a party that was willing to do inspections during the period of review for a preapproved short sale with Bank of America.  The sale closed on October 30 with no hitches.  This home was a fixer but was in a great location and had good “bones”.

Yesterday I learned that an offer we submitted on a major fixer in the Rincon Valley area of Santa Rosa was not the winning bid.  They received 17 all cash offers and ours was the only one for an owner occupant.  The asking price was $229,000.  I believe that the final contract price was around $255,000.  We will not know until the property closes.  What is a “major fixer”?  The roof was caved in at one spot and the floor boards underneath were rotted through.  Read the article below and you will learn that this is not an unusual scenerio.

Realtors’ 2012 Housing Survey:

Competition Is the Name of the Game in California

A highly competitive market pushed California’s housing recovery into high gear in 2012, forcing homebuyers into bidding wars for available homes and rewarding sellers with the strongest prices seen in years.

A new report — the California Association of Realtors’ annual Housing Market Survey — helps explain the dynamics of today’s market.

The survey found that 57 percent of home sales received multiple offers in 2012, the highest in at least the past 12 years, with each home receiving an average of 4.2 offers, up from 3.5 in 2011. Lower-priced homes – typically short sales and bank-owned properties known as REOs – attracted more offers than equity sales. Seven of 10 short sales and REO sales received multiple offers, while only half of equity sales received more than one offer.

Such a competitive housing environment has led to more properties selling at or above the list price, with 41 percent of homes selling without a markdown from the asking price, the highest since 2005 and up from a long-running average of 32 percent.

Additionally, homes sold faster in 2012, with equity sales selling in 32 days compared with 67 days in 2011. REOs took 30 days to sell compared with 50 days in 2011, while short sales took 90 days compared with 141 days in 2011, reflecting the still-difficult process.

Many regions in the Bay Area saw even tighter markets.

“San Francisco saw a higher percentage of multiple bids than the statewide average,” said Patrick Barber, president of Pacific Union International’s San Francisco region. “A solid majority of homes here are selling at or above the asking price.”

Chart showing the share of home sales with multiple offers.

The share of California home sales with multiple offers is the highest in at least 12 years.

In the East Bay, nearly 70 percent of home sales received multiple offers in the third quarter, and many homes went into contract within two weeks of coming on the market.

Across the state, the competitive market is being fueled by favorable home prices and record-low interest rates combined with pent-up demand and a severe shortage of available housing.

“Well-qualified buyers are recognizing the once-in-a-generation opportunity to purchase a home in California and are jumping into the market,” C.A.R. President LeFrancis Arnold said in a statement accompanying the survey. “However, the fierce market conditions have forced many buyers to compete with all-cash offers and investors, setting off multiple offers and bidding wars, making it even more difficult for first-time buyers to become homeowners.”

Other findings from the survey:

  • The percentage of homebuyers making all-cash purchases has more than tripled in the past 11 years, from 9 percent in 2001 to 30 percent in 2012.
  • Demand for investment properties and second homes remained strong in 2012, with investors accounting for 16 percent of sales and second-home buyers for 7 percent. The remaining 77 percent purchased homes as a primary residence.
  • International buyers accounted for 5.8 percent of sales in 2012, relatively unchanged from 5.7 percent in 2011. Buyers from China, Canada, India, and Mexico made up the vast majority of international buyers at 39.1 percent, 13 percent, 8.7 percent, and 8.7 percent, respectively.
  • Reflecting tighter lending standards, very few homebuyers have a second mortgage. The share of home sales with a second mortgage has fallen dramatically from a high of 43.4 percent in 2006 to 1.8 percent in 2012.

The C.A.R. report was based on a questionnaire sent to a random sample of 15,000 real estate agents  throughout the state.

 

Blogging and Living – are they compatible?

Image2012 has not been my best year for blogging.  After a couple of years of getting at least one blog a week done – I have been getting about one blog a month written and it has been something that must be said.  As I sit in my easy chair with a terrible cold (yes, I am thinking it may be bronchitis at this point), I ponder on what the differences are between 2012 and years prior.  Two things pop out immediately – the real estate market is very active which has translated into my business being active and I have found myself at home less for both personal and professional reasons.  But I must be honest here – I have plenty of time to write a quick blog.

When I started this journey of blogging, I was intent on writing about real estate and the wonderful reasons for living in Sonoma County.  I took it very literally and struggled with the content.  Then I saw the movie,  Julie and Julia, and decided that I was taking the writing far too seriously.  I started writing about what I did that was fun and whatever came to mind.  Blogging was no longer a chore but an outlet.  Last night I saw that movie, again. (Yes, when you are sick enough that moving is a painful experience, TV is a great pastime.)  While I saw the movie through different eyes, I got the same bottom line.  I need to get back into putting it down on the screen and stop keeping it all in my head.  I need something that puts me out there and that is about me.  So welcome back, Barbara, and may your readers enjoy the ride.

So what have I been doing?  As I said before, business is booming in Northern California.  Does that mean that prices are skyrocketing? No.  But it does mean that there are lots of buyers out there and at a bargain (compared to 2007) price homes are selling like hotcakes.  I hear about homes that are getting 13 to 15 offers in 3 days.  These are at the lower end of the market but I have had multiple offers at the $1M price point.  My goal is to have 3 listings at all times and I don’t mean the same three!  I have a short sale listing that is now going on it’s 9th month.  I keep holding out hope that this is the month that the stars align and all of the lien holders, sellers, buyers and new lenders are ready and in agreement at the same time.  It is a challenge but I know that it can happen.  The home on Chileno Valley Road should close on October 1 and I have a new listing in Rohnert Park that you should be able to view on this blog in the next week or so.  I know that it will sell quickly – great location – right price point.   I am looking for the replacement listings for these three so that I keep the well primed.  I could possibly handle more than three at a time but I don’t know how to give less service so there is a limit to how many I can take.  On the other side of the business, I am working with a number of buyers who are ready to buy but need to find that special property whether it is $120,000 or $2,500,000.  I love showing property so bring on the challenge.

ImageIn the midst of this real estate frenzy, I have been out of town for about half of August – some business – most pleasure.  Early in the month I drove to Los Angeles to a real estate event to catch up on the latest in marketing and business techniques.  It was inspirational and tactical – just want I needed.  Katy went with me and we stopped at my sister’s home in Cambria, visited Hearst Castle and spend some time at Disneyland.

Home for four days and then I was off to Seattle (the opening picture is from the Chihuly exhibit in Seattle by the space needle) and an Alaskan cruise.  The scenery was spectacular.  The cruise wonderful.  Business was conducted at the ports of call.

Looking forward to doing more posts when I am feeling better.  Cheers.

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.

Setting the Value of a Property

A Distressed Property that Looks Great

This last week has been a busy one in Real Estate.  I am asked many questions about the process of buying or selling short sales and bank owned properties (REOs).   I just listed a great home in Santa Rosa that is not a “distressed” property.   The question came up as to what is the pricing difference between “distressed” properties and those that are not.  I always respond that the prices are about the same for the same condition.  But often distressed homes are not in as good a condition as those regular sales.  Below is an article on appraisals that was sent to me by Ron Shaw of Paramont Equity.  I think that it gives a good description of the values given to different sales conditions.  Hope you enjoy it.

The Appraisal Institute recently released guidelines to instruct its members on how to deal with distressed sales and foreclosures when seeking comparables.
According to the Institute, some homeowners claim appraisers have undervalued their homes by relying on nearby foreclosed homes and distressed sales as comparables to their properties.
In a recent announcement about the new guidance, the Appraisal Institute states that qualified appraisers “know what adjustments to make, if any, when using distressed sales as comparables, for such methods are taught in basic coursework and updated seminar materials available to professional appraisers.”
Regardless, because the issue is “particularly crucial” in the current market where distressed sales are common, the Institute is offering additional guidance.
The new guide instructs appraisers to rely on less recent sales and broaden their geographic parameters when they cannot find an appropriate comparable within the traditional boundaries.
In general, “foreclosures and short sales usually do not meet the conditions outlined in the definition of market value,” the Institute says.
Short sales may involve “atypical seller motivations,” and foreclosed properties may be damaged or deteriorating. However, “appraisers cannot categorically discount foreclosures and short sales as potential comps in the sales comparison approach,” the institute states.
“As is always the case in selecting sales to use as comparables, appraisers must investigate the circumstances of each transaction, including whether atypical motivations were involved, sales concessions were involved, the property was exposed on the market for a typical amount of time, the marketing program was typical, or the property condition was compromised,” the guidelines state.
When using distressed sales as comps, appraisers must assess all aspects of the sale and decide whether it is appropriate to make an adjustment due to uncommon conditions.
 

So when you are deciding what to offer on the property, the condition is what is paramount – not the type of sale.

 

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.

2011 Has Been A Wonderful Year

Happy American Canyon Buyers and Los Altos Sellers!

The last day of 2011 and what a year it has been.  When January 2011 came around, I had no idea where I was going or what the year was going to bring.  My first post was about the increased and difficult business of real estate.  Thankfully the volume continued and I am pleased to report that I closed more transactions than I have in any other year of my real estate career.  The year finished as it had begun with a flurry of activity.  Alas, the difficultly continues as sales are plagued with late appraisals, slow loan approvals and the hurry-up-and-wait process of short sales and bank-owned properties.  Home values have continued to decline except in those few areas where the prices fell so precipitously that there is nowhere to go but up – specifically Rohnert Park has seen some price increases in single family homes.  This December was a very busy month.  Not only was I working on Sonoma County real estate but I closed transactions in American Canyon (Napa County), Los Altos (Santa Clara County) and Lakehead (Shasta County).  These put a few miles on my car but I love working with great folks and these buyers and sellers were top-notch in my book.  I would go anywhere in the State of California for people like them.  And speaking of going – I only attended 8 parties in 14 days during this frenzy of work.  I needed a rest week after Christmas.

View from a Bedroom Window - No difference which one - they are all fantastic!

I am starting 2012 with a listing that I expect to be of great interest to anyone looking for a luxury weekend getaway.  Privacy, space and up-to-the-minute elegance is the best description.  This modern tree house is in a wonderfully sunny spot on Green Valley Road.  It will hit the market late January and you can be certain that you will see it on this blog.  There are many people looking for bargains in real estate and I am working to serve them.  But enough about 2012.  This post is about 2011!

The statistics for this blog were sent to me today.  Around 5,300 hits in 2011 with 35 posts.  I have made a New Year’s resolution that you will get a weekly update on Sonoma real estate.  This is something I follow and I should be sharing the information.  I was surprised to learn that my most read post in 2011 was the one I wrote in May of 2009 on our Redwood Empire Rose Show.  I guess that tells me that I should be more diligent about reporting on the Rose Society.   And, of course, I will continue sharing events around Sonoma County and my travels.  I don’t expect much traveling this year but then, one never knows.

Just a quick report on the Sonoma County real estate numbers.  Here are some numbers comparing November 2010 to November 2011.  The months of inventory (meaning – at the rate houses are selling, how many months would it take to sell all the houses on the market if no new ones were added for sale) has dropped significantly from 5.9 months to 3.3 months.  This is an indicator that buyers are taking advantage of these great prices and low interest rates.  Another interesting fact is that while the average list price has increased from $616,000 to $773,000 (about a 25% increase), the averages sales price has only increased from $374,000 to $386,000 (only a 3% increase).  This tells us that more expensive houses are coming onto the market as owners realize that holding out for better prices may not be a good idea.  The lower priced homes are not getting any lower and the higher priced homes are seeing a price compression.

Maike in Kauai

This last week I have spent on Kauai with my granddaughter – oh, and her parents and my friend, Katy.  What a great way to spend Christmas – no hassle, no clean up, no expectations.  We have had a wonderful time and I may get to reporting on our activities here.  But now it is New Year’s Eve and I wish the very best of 2012 to all my readers, colleagues and friends.

View of Bali Hai from the St. Regis Beach

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!

 

What is Happening in Sonoma County Real Estate?

Amazingly I realize that it has been almost two months since I have posted.  It is not that I have not thought about it – it all has to do with timing.

December was filled with getting myself situated at RE/MAX PROs in Rohnert Park.  Yes, it is the same office as CPS Property Advocates which I joined in November.  Four affiliations in the span of six weeks is quite an undertaking.   Fortunately during this time, I have been able to get some business transacted.

Last week the little cabin in Maribel Heights of Forestville closed.  Two days prior to the close, the short sale on Gamay Street in Santa Rosa was approved and inspections were completed.  Early last week, we opened escrow on a bank owned condominium on Racquet Club Circle in Rohnert Park.  I would say that business is picking up in Sonoma County.

But none of these escrows are straight forward or “easy.”  What is a “straight forward” escrow?  Straight forward is where the seller agrees to an offer, the inspections are completed to everyone’s satisfaction, the appraisal is submitted and accepted by the bank, the escrow company draws up the papers, the buyers and sellers sign the documents, the bank funds the loan and the sale closes.  There are many steps but everything goes in a smooth order.  This does not seem to happen often these days.

8190 Knoll Drive, Forestville

The sale in Forestville was the perfect opportunity for a regular, straight forward transaction.  It is a cute, clean cabin – built in the 50’s (maybe – who knows when the county did not keep records at the time) and with a second lot next door.  First problem was that many did not believe that the lot was buildable (i.e. that the county would allow a residence to be built upon it).   We finally (okay, it was only a couple of weeks) got an offer that seemed to be acceptable to all parties and opened escrow.  Second problem was that while there were other homes sold in the last three months in the neighborhood, none were with post and pier foundations or with a lot as large.  Then the appraisal came in $40K less than the agreed upon price – not much value for the extra lot and no comps in the same area.  When the bank reviewed the appraisal, they decided that errors were made and took another $20K+ off of the value.  So now we have a buyer who was willing to pay more and a seller who was expecting more.  After much back and forth, it was agreed that the house would sell for some over the appraisal (based upon what extra cash the buyer could pull together) and after the first of the year to allow time for the sellers to find a property to exchange into.  Everything was set – and then the interest rates began rising.  The property finally closed but it was nail biting down to the end.

1623 Gamay Street

The home on Gamay Street is a short sale.  What that means is that the bank is owed more money than the house will bring in a sale.  Wachovia is the bank who holds the note and they have been proactive in addressing the issues.  My client was qualified for HAFA (Home Affordable Foreclosure Alternatives) which is a very good program for people who are losing their homes due to financial circumstances beyond their control.  The two major benefits of HAFA for the seller are that the loan is forgiven (meaning that the bank cannot come after the seller in the future to pay off the remainder of the loan) and the seller is given $3000 to cover moving expenses.  All was going well and then the appraiser climbed under the house and said that he observed a leak in the plumbing.  The bank said that there needed to be a licensed plumber called to remedy the leak.  Two inspectors had been under the house and did not observe a leak.  The plumber did not observe a leak.  We are awaiting a resolution from the bank.

The condo in Rohnert Park is in escrow with a bank.  Fortunately (based upon the two earlier examples) there is no loan and, therefore, no appraisal.  The challenge is that the bank wants everything done yesterday but seems to be taking their own sweet time about getting their end of the deal done.  I am sure that it will work out well but I expect that something out of the ordinary will happen.

This is real estate today.  Deals are getting done.  Nothing is easy.  Most buyers and sellers are stressed.   But the bottom line is:  When you need to sell, sell.  When you need to buy, buy.  There is no better time to do it.

When I return to Sonoma County from my vacation, I will be holding the home on N. Main Street in Sebastopol open and I will be listing a horse property on Sonoma Highway.  Watch here for details in early February.

417 N Main Street, Sebastopol - OPEN FEB. 13, 2011 1 to 4


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