If the challenges we’ve been facing the past two years weren’t bad enough, we have a new hurdle to overcome. Lack of inventory.

Not that we’ve run out of foreclosures. They just aren’t on the market right now. Since last year’s moratorium, banks have held homes off the market and they are just starting to trickle back on.

In a  nutshell, what this means is that consumer demand is high (buyers don’t want to miss the boat) and supply is low (hundreds of foreclosed properties have not been made available) resulting in multiple offers over asking price.

Despite all that, median sales prices continue to decline as shown in the graph below.

What’s a buyer to do? Keep looking for the home you want and can afford. Be ready to offer more than asking price if you really want that house. Always to the math. Only offer an amount that works for your budget and makes sense as far as long term value of the property.

Don’t despair if you don’t get the contract. More homes are coming. Be patient and diligent. You’ll get there!

home-buyers1By Lisa Scherzer, SmartMoney.com

Apr 10th, 2009

The declining home values that are plaguing homeowners are just one of the factors creating an opportunity for prospective home buyers.

Standard & Poor’s latest Case-Shiller index, which tracks home prices across 20 major U.S. cities, reported that values dropped 19% in January from a year earlier.

Those depressed values, combined with near-record-low mortgage rates and government incentives (an $8,000 first-time home buyers’ tax credit included in the stimulus bill), are luring more first-time home buyers into the market. Indeed, a recent Century 21 Real Estate survey found that more than three-quarters (78%) of potential first-time home buyers say now is a good time to buy.

If you agree, be aware that buying a home comes with plenty of potential missteps. Here are 10 all-too-common mistakes first-timers make.

1. Not knowing how much house you can afford.

Many novice home buyers spend a lot of time researching homes – comparing kitchen layouts and backyard square footage – but very little time researching their financing options. One of the first things buyers should do is talk to a qualified lender and get preapproved for a mortgage, says Claire Clark, senior vice president of business development at Prudential California Realty. Without first figuring out how much house you can afford, you risk falling in love with one you can’t.

2. Assuming foreclosures are great deals.

Just because the previous owner owed $450,000 on a house before the bank took it over doesn’t mean it’s worth that much now. Values have slipped significantly, says Jay Michael, partner at Estate Property Group, a Chicago real estate brokerage, so you may not be getting the bargain you think with a foreclosure. Also, most homes owned by lenders or banks have been sitting vacant for months and may have been vandalized. That could require extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll likely reap by buying a lower-priced foreclosed home. Read the rest of the article here.

Here are the latest stats from trulia on Median Sales Price on homes for sale in Brentwood. Seems the trend is still downwards, although it appears that the downslide is tapering off.
Brentwood median sales prices
Brentwood Recently Sold Homes

Median Sales Price is the price at which one half of the homes sold above that amount and one half of the homes sold below that amount. Median Sales Price is based on sales during the most recent 90-day period available and is updated each week to include recent transactions from public record data sources.

Number of Sales

Also, the number of homes sold in Brentwood is dropping off from the peak in late 2008. Inventory has dropped as banks have held properties off the market, but more foreclosures are expected to boost supply soon.

Number of sold homes in Brentwood
Brentwood Recently Sold Homes

Number of Sales is a count of all known arms-length residential property sales over the prior 90-day period. Volume for All Bedrooms may be higher than the total volume for 1-4 Bedrooms. All Bedrooms includes not only 1-4 Bedrooms but also 5+ Bedrooms and records where the number of bedrooms is unknown.

This was sent to me from a colleague of mine.

I just found this information regarding the new tax credit….I don’t think a lot of buyers or agents are aware of the fact that buyers can claim the tax credit on their 2008 return even if they purchase the home in 2009….great incentive to pass on to buyers and agents….

taxesQ.

If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return? Yes. The law allows taxpayers to choose (”elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns).

A.

Benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount. Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

As always, talk to your accountant or tax professional to make sure you qualify and file correctly.

Do you own a home in Brentwood, Discovery Bay or Antioch? Need some answers about modifying your mortgage?  Here are a few answers from the FAQ’s about Loan Modification for Mortgages from the HUD website.

“A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.”Mortgage Loan Modification

Question 1: In utilizing the Loan Modification option to bring an asset current, can the mortgagee include all fees and corporate advances?

Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified principal balance.

Question 2: May a mortgagee perform an interior inspection of the property if they have concerns about property condition?

Answer: Yes, the mortgagee may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the mortgagor’s continued ability to support the modified mortgage payment.

To read the rest of the article, go to http://www.hud.gov/offices/hsg/sfh/nsc/faqlm.cfm

the_kitchen1

Many experts recommend that you focus on the kitchen first when preparing your home for sale. For many potential buyers, the kitchen is the most important room in the house.  Since the kitchen has the power to make or break an offer, you should do everything you can to enhance it before showing your home to buyers.  And, most experts agree that next to painting, improvements in the kitchen are the most profitable.  Remember though, money you spend here is a cost of selling, you don’t want to do a full remodel, but rather take some affordable steps to show what you have in the best possible light.

Start by creating space.  You want the kitchen to look large, light and roomy.  Clear the counters of all clutter.  Take everything you can out of drawers and shelves and move it to storage.  You can almost count on buyers opening your drawers and shelves when they come to see your home.  What you want them to see is space, and plenty of it, not your old pots and pans.

the_kitchen2Consider paint.  Paint is always the most profitable improvement.  A fresh coat of light, neutral color paint on your kitchen walls will make them look spotless and new.  Exactly the look you want.

Pay particular attention to the sink.  It should be absolutely free of stains and of course there should be no leaks or drips!   If your faucet looks old and dated, consider replacing it with a new one, it will go a long way towards improving the look of the whole kitchen, for very little money.

Counter tops.  If your counter tops are looking old and tired, you should consider new ones.  Remember to stick with neutral colors though.

Freshen up the cabinets.  Replacing the cabinets is expensive and probably doesn’t make sense.  But you can paint them, or put new, modern looking pulls on them for very little money and give them a fresh look.

In short, buyers will be quick to notice any shortcomings in your kitchen.  So you want to do everything you reasonably can to freshen up your kitchen and give it a new open large look.

Turn off your TV, stop reading the newspaper and start working on your plan to buy a home in 2009. There are tremendous opportunities to SOLDbuy right now and I suspect that will continue through the rest of the year.

When will we see the bottom? It’s simple. Sometime after we hit it and we’re on the way back up.

That may not satisfy your desire to purchase at the perfect time, but it’s the truth. The best time to buy is when it’s the best time to buy for you.

Here are a few things to consider if you want to take advantage of the current market, especially if you are a first time home buyer.

  1. Home prices are at pre year 2000 levels in many areas. Some are bank owned properties and some are not. Do your homework to find the area that meets your personal needs as well as your financial budget.
  2. Know where you qualify as far as getting your mortage loan before you start to shop. RISMEDIA reports that today “Thirty-year mortgage rates increased slightly last week for the second consecutive week. The weekly average rates for 30-year fixed mortgages increased to 5.10%, up from 5.07% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate website Zillow.com(R). Meanwhile, rates for 15-year fixed mortgages decreased to 4.79%, down from 4.86% and 5-1 adjustable rate mortgages increased slightly to 5.62% from 5.56%.”  Keep your eye on rates as part of your purchase strategy.
  3. Know what the tax advantages will be when you buy. Talk to an accountant or tax pro and know how owning a home relates to your overall financial health.
  4. Think of your purchase as an overall part of your life and finances. Buying a home is not an isolated event in your life, think about how it works to fit your needs in the long run.
  5. Take action. Do the work upfront and have a solid plan that you stick to. Buying a home is a very emotional event, and it’s easy to get caught up in the excitement without considering the long term effects of those decisions.

The time is right to buy for many right now, but not for everyone. Find out if it’s right for you.

avoid_holiday_theftAlthough we’d like to believe the holidays bring out peace on earth and good will towards men (as the Christmas carol goes), the weeks between Thanksgiving and New Year’s Day tend to be a prime season for criminals. During this busy time of year, you can take some easy precautions to prevent becoming a victim of theft. Consider the following safety tips:

When holiday shopping:

  • Don’t park in unlit areas at night.
  • Put your shopping bags in your trunk. Don’t try to cover items on your seats with a blanket. Better yet, take your packages straight home after a shopping spree and then go back out.
  • Don’t carry large amounts of cash with you, or else, keep it in your front pocket not in your purse or wallet.
  • Be extra careful when carrying a purse – they are the prime targets of criminals in crowded shopping areas. If you must carry one, make sure it has a strap that can go over the shoulder and be held under the arm, making them more difficult for purse snatchers to grab.
  • Keep a record of all of your credit card numbers in a safe place at home.
  • Beware of strangers approaching you. This is the time of year when thieves may try various methods to distract you with the intention of taking your money or belongings.

At home:

  • When leaving home for an extended time, have a neighbor or family member watch your house and pick up your newspapers and mail.
  • Leave a light on when you leave your home at night or put your lights (including Christmas lights) on an automatic timer.
  • Make sure your holiday gifts are not visible through the windows and doors of your home.
  • Never say you are away from home on the outgoing message on you answering machine or voice mail. Simply say you are unable to get answer the phone at the time.

During the holidays, many people can become careless and vulnerable to theft and other holiday crime. Protecting yourself and your home from potential crime is the easiest way to ensure a safe and happy holiday season.

Support Matters. That’s what it says on the big red can in our Coldwell Banker office.

“What’s this about” I wondered?

americanflag-animatedNow I know and I’m on a mission to fill this 32 gallon can with donations and care package items. So here’s the deal. There is a local group called the Delta Blue Star Moms, “a service and support group for the families and friends of US military personnel”.

This is not a political organization, this is about people. Specifically the kids serving our country all over the world.

Just imagine if your son or daughter was half way across the globe. Just imagine how home sick they would be.  Wouldn’t you send them a ‘care package’? Of course you would!

So here is your chance to make someone else’s life a little brighter this holiday season. Bring your donation and help fill the big red can.

Here is some of what they are looking for:

DVDs and CDs (new or used), Beef jerkey or Turkey jerkey, single serving drink mixes, duct tape (I know you have 3 rolls in the garage, fork one over), breath mints and gum, batteries, card games, hand held games, chapstick, deoderant/antipersperant, pads of paper, pens, stationary and nerf balls. :-)

This is by no means the entire list. For more ideas, go to https://www.deltabluestarmoms.org/Support_Our_Troops.html.

Please, next time you are at the grocery store or mall, grab an item for our troops and drop it of at:
Coldwell Banker Amaral
8290 Brentwood Blvd., Brentwood
Call 925-634-0600 for directions

You can also send an email to president@deltabluestarmoms.org for more information or just click on the ‘Contacts’ button at www.deltabluestarmoms.org

Ready to make an offer?
Most banks have a REO department that you’ll work with in buying a REO property from them.  Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.  Before making your offer, you’ll want to contact either the listing agent or REO department at the bank and find out as much as you can about what they know about the condition of the property and what their process is for receiving offers. 

Since banks almost always sell REO properties “as is”, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it.  As with making any offer on real estate, you’ll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.  After you’ve made your offer, you can expect the bank to make a counter offer.  Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.  Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends.  It’s not unusual for the process of offers and counter offers to take days or even weeks.

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