San Leandro, CA

The Home Valuation Code of Conduct (HVCC) Becomes effective on May 1st. 2009 and it will hurt home buyers, home sellers, real estate brokers, appraisers and lenders amongst others. Be aware, be prepared, be patient, and... don't talk to the appraiser!

The New York attorney general after concluding an investigation into Freddie Mac and Fannie Mae's appraisal practices along with several government agencies, decided to adopt new changes for appraisals in the mortgage industry. Loan brokers and lenders are no longer allowed to chose their appraiser, all relationships with them are almost illegal!

This is what the first paragraph of the newly enacted resolution says: Home Valuation Code of Conduct: No employee, director, officer, or agent of the lender, or any other third party acting as joint venture, partner, independent contractor, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery, or in any other manner including but not limited to:... Followed by 10 points and 11 subcategories of limitations as to what the lender can and cannot do when dealing with the appraisers. After all, appraisers were blamed for the current market conditions.

These new rules force lenders to go to a third party for their appraisals. They must now use and AMC (appraisal management company) forcing appraisers to join an unregulated AMC that will charge 50% or more of the appraisal fee for their services. It disallows the appraisers from engaging in any type of communication with mortgage brokers, Realtors, loan officers or anybody that may receive a commission upon funding of that loan. Seasoned, experience appraisers are forced to share their fees wiThu AMC's

The home buyer will probably have higher costs incurred as a result of this new rules, the delays in closing escrows now will go further because of funding delays from 30 to 45 to maybe 90 days. Lenders are not prepared or familiar enough to deal with these changes. Buyers will have to pay higher fees for the lock-in rates and the extensions and if they change lenders, they will have to get another appraisal! Home sellers will not be happy either, because for them, closing early might mean the difference between a normal sale, to a short sale to even foreclosure.

For us Realtors, we need to start counseling every client about these delays right from the moment we take the listing or write the contract for the buyer. Listing agents should be well prepared to meet the appraiser, have enough comparable sales if available. When additions have been done to the property, copies of finalized permits should be handled over at the same time, and follow up with the lender to make sure the package is complete when submitted for final approval.

As we approach the November 30th 2009 deadline cut for the $8,000 tax credit to first time homebuyers , these delays will cost a lot of people a lot of money. This is one regulation we did not need at this time, but we have to deal with it. Hopefully we get better oversight and more conservative lending in the future, but until that happen, sit down and buckle up because this is going to be a white knuckle ride if you are dealing with real estate appraisals.

Antonio & Alexia Cardenas, "The Realtors In Motion" Serving the wonderful cities of San Leandro, San Lorenzo, Castro Valley, Oakland, Hayward, Pleasanton and Dublin in the Alameda County, on the East Side of the San Francisco bay. Visit us at www.ListedByAntonio.com (510) 326-4263

Well blog readers, sorry I have taken so long to post a new blog post.

Guess what

I have been busy helping clients. I just finished with two closed escrows. I was working with Tommy and Rachel finding them a nice ranch styled home in Hayward. I was also working with Xiaodong and Faqiang getting them an investment property in Pittsburg.

I have been trying some new marketing. On Sundays when all the house hunters are out looking for open houses, I have been placing my tent sign out at the corner of Bancroft & Dutton with large print printout reading "LIST OF LOCAL HOMES FOR SALE". I then printout the MLS list for the area and supply them in an large envelope attached to the tent sign. Home hunters have been very receptive of this house hunting tool. If you're in the area on a Sunday, stop off at Zocalo Coffeehouse www.zocalocoffeehouse.com for a mocha or latte and then pick up one of my lists at the corner. If you come across a property that you would like more information and would like to see in person, please give me a call at 510 334-7800

Two houses are available on Superior Avenue 565 and 666. 565 is a beautiful well kept storybook style tudor built by Derry, Weaver & Derry as part of the "Cherry City Tract". 666 is a fantastic corner lot 1940s art-deco home built by Derry Bros. I'd love to sell one of these homes to you.

Lets go and find your dream house for you.

What if you client ask you to write it? the seller can only accept ONE offer, what would be your contribution to this frenzy bidding? what about the other 59 Realtors? and their clients? At what point would you say, I am not going to be a part of this frenzy bidding. Apart from that, what type of an offer would you counsel your client to write in order to have a chance to be the highest bidder? What would happen if you go too high and then the appraisal does not measure up? What would happen then? who's fault is it that this one sale went out of control? How much time was spent here by would be home buyers and Realtors?

As I browsed this morning our MLS, looking for a house for a first time home buyer in Hayward, CA, I come across a very nice house in an average neighborhood slightly under-priced, (MLS # 40400913) It has been on the market for only 12 days, and I noticed the note from the listing agent "PLEASE NO MORE OFFERS, 60+ HAVE BEEN SUBMITTED, WAITING FOR A RESPONSE" My heart went out to this pour soul, I can imagine his fax machine spitting out offers at the tune of a minimum 17 pages per offer! 1,020 sheets of paper says my trusty calculator and then he/she will need about a day to sort them all out. And then fax that pile of paper to the bank. We are going to need another fax machine! The number of messages to be returned will need to be streamlined in a very unique way. Out of those 60 Realtors, there are bound to be some nasty calls about "What happened to my offer?"

This real estate market is showing us faces we have never seen before, this is early April 2009 in the San Francisco bay area, where according to the media prices have dropped, unemployment is high and nobody is buying... really? 59 out of these 60 buyers are disappointed and still without a house to buy.

There are some serious issues here. In the one hand the listing agent cannot put this house on the "Pending" side until an offer is accepted. On the other hand, the bank wants to see "any and all offers" so they can pick highest and best. Can a buyer sue you for NOT writing an offer on his behalf? Someone will have to take control of this mess and make the right call, choose the right offer, and hope the buyer does not flop before escrow closes, there will be a lot of people real mad if they have to run back up to that house to show it again and write another offer.

What would you do if a client ask you to write offer number 61? would you take the time to write it? If you were the listing agent, how would you handle such a mess. I truly want to know. I have been a Professional Realtor since 1985, I thought I had seen it all... I guess I haven't, enlighten me please. What would you do in both cases.

Antonio & Alexia Cardenas, "The Realtors In Motion" Selling the wonderful counties of Alameda and Contra Costa in the East Shores of the San Francisco Bay. Accepting Referrals to San Leandro, Castro Valley, San Lorenzo, Hayward, Pleasanton & Dublin. Visit us on line at www.ListedbyAntonio.com (510) 326-4263

The local real estate market is showing signs of life! Finally! we are sensing more activity at open houses and sales at all price points. It does appear that home buyers are more aware of what this market is offering to them right now and they are finally taking the plunge. The $8,000 credit to first time buyers is a big pull plus fix interest rates below 5% shown all over the news is a confirmation to them that this market is turning around and if they don't buy now, they could simply miss the boat entirely. Spring time is the PERFECT time to buy a house.

I predict that as we get closer to the November 30th deadline for the $8,000 tax credit there will be a rush of first time buyers trying to get into the market, but probably they will not find by then the number of properties available to chose from that we have right now.

Here in the wonderful east shores of the San Francisco Bay, in our quiet little town of San Leandro, CA, we are seen below the $300,000 level a tremendous amount of activity. We have encountered multiple offers regardless whether these listings are bank owned properties, short sales or simple common listings. We have not seen multiple offers on the same property for years, but now they are almost the rule. Within the last few weeks we have written 9 offers on behalf of several of our first time home buyers, and still cannot find them a house. These buyers are loosing to other buyers offering sometimes up to $40,000 above asking prices.

Behind the bad news about a recession, lay off numbers up and unemployment numbers rising, there is a very active real estate market happening right now in certain areas of the country, there are great bargains out there for first time buyers and first time investors, people are taking another look at real estate as the great investment that it truly is. Investors are out there competing directly with first time buyers, perhaps they see that the number of displaced families who lost they homes to foreclosures will turn into good long time renters, these people used to be home owners and will have to wait years before they can buy again, rents will be going up as the demand increases.

As a Professional Realtor I welcome with enthusiasm these positive news, I have seen in the last few years how bad financing destroyed the American dream, put people out on the streets, broke families apart and decimated my industry. The damage done to the trust and the credit worthiness of the individual will take years to heal. But for now I am very glad the long road to recovery at least appears to be within sight.

Antonio & Alexia Cardenas, "The Realtors In Motion" Serving the wonderful Counties of Alameda & Contra Costa Counties, specially the following cities: San Leandro, San Lorenzo, Castro Valley, Hayward, Oakland. Visit us on line at: www.listedbyAntonio.com (510) 326-4263

Here is a woman burning with desire to buy a house. For years, she worked towards saving money, cleaning up her credit rating, all the while pining for a house.

Because of the language barrier, she has to rely on both her son and her daughter to help her in the process. So they go to the bank. She gets preapproved. She's ready.

Step by step

• The first time that we met, I walked them through the process. I even gave them a Home Buyer's Guide and asked that they read it so that they know what to expect.
• I asked them to get prequalified. They said they already did, and handed me their preapproval letter.
• I call the lender, he confirms they can afford to buy a house.
• Then I gave them ideas on where we can look for homes in their budget.
• We find her a house, a really nice bank-owned, in San Leandro, CA
• We write a contract. Every step of the way, I explain the terms, the conditions, the timelines, the rationale. They seemed to understand.
• I give them a printout of the estimated costs and the monthly payments. They said okay.
• We submit an offer.
• We get a verbal acceptance, pending some changes on the terms and their acknowledgement. I immediately call them to come back to the office so that I can explain the next step.

I truly wish I delved deeper and made sure everyone was clear on what to expect.

Does this buyer really understand?

So I call...and then I call...and I call again to both mother and daughter. Finally, after two days of repeated calls, the mother calls me back, wailing!

...She says she thought she should have gone through government financing (she must mean FHA). Before writing the offer, I asked them what type of financing they wanted to do. They said conventional. Guess they didn't really know the difference, or their lender didn't offer that option.

....she didn't really want to go to the bank (she calls "private funding.") Guess she didn't understand that the bank could also do FHA loans.

....she didn't know she needed money for closing costs. Both the lender and I explained that there would be closing costs. I even printed a summary of the estimated closing costs, and reviewed each item. Guess that also went over her head.

...she only had so much for a downpayment. Before looking at houses and before writing an offer, I asked her if she had enough for the downpayment and the closing costs. Both she and her children said yes.

...she thought she had 17 days to think about it. Before we wrote the offer, I tried to explain the loan approval/appraisal and buyer investigation process, and that they will need to pay for the appraisal and the inspections)

...she doesn't seem to sense the urgency to respond. I had left messages for them that I needed to see them so that I can walk them through the process again, and each time, I said it is urgent that we have a face-to-face meeting.

Changing the terms and conditions

I will ask the mortgage consultant if they qualify for an FHA loan. That would mean changing the terms of the contract --- amount of downpayment, and length of escrow. If the seller (this is bank-owned) agrees, then we can move forward.

Otherwise, it's back to square one. And I hope that the next one sticks.