n September 2007 every news channel was reporting The Bubble has officially burst and home prices were on a steep decline. As a matter of fact that was the news until mid 2008. In mid 2008 the news had caught up with the time to find that this is it… Get out there and buy. Headlines, Were: It time to take Advantage of the seriously good deals.
From January of 2008 till about October 2008 Los Angeles County had over 15,000 bank owned properties & Orange County was tipping the scales with about 9,500 bank owned properties on the open market. During this time Buyers came out in droves to get a “Steal of a Deal”. Especially once they announced the first time buyers tax credit for $7,500 then changing it to $8,000. It was as if any buyer during the housing boom that got pushed out of the market due to pricing all came out with a vengeance. And really who could blame them? The banks & servicing companies were slamming the real estate market with inventory levels that most realtors thought we’d never sell them all. At one point Los Angeles County & Orange County alone had a surplus of 18 months of homes to sell. That simply meant if no other homes were to come onto the market it would take us 18 months to sell them all. However, that wasn’t the case. As of this morning Los Angels County has 1,294 bank owned properties & Orange County has 315. So with that little tid bit of information you can see why you’re seeing multiple offers on homes you’re trying to buy.
Buying a home in Southern California has gotten a lot tougher and a lot of people simply keep asking why & what can I do? As a matter of fact I would venture to say we are seeing this across the country.
Let’s start with a little history, so to speak . In September of 2008 the government imposed a moratorium stopping all foreclosures. This was one of those double edged swords. On one side we have millions of home owners with predatory loans that were or were just about to adjust to levels that they could no longer afford the home & some simply had a job lose which again created a financial hardship. I personally cannot speculate what financial hardship each and every home owner has been going through and why, but rest assure that was what the powers to be were wondering too. Hence why the banks & bank servicers’ were instructed to go back to each of these home owners and try to work something out. On the other side of the sword this has created the lack of inventory levels that home buyers are now faced with now.
So, what’s a buyer to do? Well, first please understand that had they not taken this action of imposing the moratorium and had they not kept extending these time lines for the banks and servicing companies to get to all the home owners… Simply put our news channels would be talking about the millions and millions of homeless families that were on our street because of this which wouldn’t do anyone any good. Personally that would have devastated me as I think there is a way to solve the homeless population and mark my words someday it will come to pass that I will have had something to do with correcting that, but that’s a whole other story.
Secondly, know that the banks are foreclosing again, but also know they have to make sure that no one is living in the homes, that they are safe, they must be cleaned out, and priced which is taking a little time. Also know that the banks are not going to flood the market again with homes. We have plenty coming there is no doubt, but we are not going to see the flood we had in 2008 as this would only create more of the same.
Thirdly, be pre-active. Make sure you’re keeping your loan approval up to date. What do I mean by this? Well, every time you get paid call your lender and fax him/her a copy of your check stub. The same goes for any type of bank statement you get. Also watch the date on your pre-approval letter if it’s reaching 60 days old and you have supplied your lender with current information make sure he/she gives you a newer pre-approval letter. This would also be a good time to start contacting other banks for pre-approval letters as a lot of the banks are requiring pre-approval letters from other banks. If you’re wondering which banks to talk to first and foremost I would talk to your Realtor, but consider the big ones first… ie, Chase, Bank of America, Wells Fargo, Wachovia, Prospect Mortgage, Pacific Mercantile Bank, Citibank, and HSBC. Again, talk to your Realtor he/she can tell you what banks to contact for your area, but for Southern California those are the big 8 banks we have needed approvals for our clients.
In addition, now would also be the time to start aligning yourself with the right Realtor if you haven’t done so already. Make sure he/she knows whats going on in your market place. Interview a few so that not only do you find someone who really knows what they are doing, but also someone you feel comfortable with. Remember this; don’t pick someone because you know them pick someone who’s going to get you the right house, at the right price & terms, and at the right time. Be very upfront with this person and expect the same in return. When hiring a realtor he/she might ask you to sign a buyer/broker agreement are they bad, no. What they are is a commitment between you and that agent/broker that he/she is going to work hard for you and in return you agree to submit offers through them only. The best example I can give you is a short-term marriage.
Another thing you could do in the meantime is start checking out areas. Find out where it is you really want to live. If you have small children and schools are important now would be the time to do your homework. Do not depend on someone else to know the schools inside and out. Get the information first hand so you make the right choice. So many times I have seen home buyers wait until they find a home and then find they have make a bad choice. Also please make sure you’re know the price point for these areas. After all, no area is a good area if you can’t afford it.
Last, but certainly not least keep in contact with your realtor. Talk to him/her about what you’ve been seeing online or what you have been seeing while driving around certain areas so he/she can guide you in the right direction. Be patient and try to enjoy the journey of buying a home. Your home is out there it just hasn’t made it to the market yet.
We certainly hope this information helps you. If you have any questions, comments, or concerns please contact us… We’d be happy to help you any way we can.
Melissa Bayles, GRI-RE Masters, Realtor
www.TheRealEstateGeeks.Net
Info@TheRealEstateGeeks.Net
about 20 years ago from its original life as a large multi-building apartment complex. 
