Anja Kerstens - Signature Homes and Estates

So you are confused by all the changes in the Real Estate market. You hear "expert" advise from your friends, neighbors and the news media. You have questions about the new first time homeowner tax credit or want to find solutions for the increasing monthly house payments. You need help or you simply want to know more about the "new" real estate market. Visit the Homeownership fair on May 16th, 2009 from 9:30 am - 4:00 pm.

The Santa Clara County Association of Realtors® is hosting the Homeownership Fair at the Santa Clara County Faigrounds on Tully Road in San Jose. This is a great informative fair for all those interested in Real Estate. It is a great place to be if you are a first time homebuyer, facing foreclosure, want to move up or looking to purchase investment properties. Seminars and educational tables will offer help and information to all types of buyers. Be an informed homeowner or buyer. For more information you can visit the website http://www.thehomefair.com/.

Don't hesitate and get the answers you have been looking for.

I just attended a seminar on the "Pitfalls of Short Sales and REOs" hosted by the Santa Clara County Association of Realtors®. This excellent seminar was presented by attorneys David Hamerslough, and Sam Chuck from the law firm of Rossi, Hamerslough,Reischl and Chuck http://www.rhrc.net/. They discussed how to handle short sales and its pitfalls and liabilities. Topics of discussion were loan modifications (more on that in the next post), bankruptcy and foreclosures.

When a client approaches you for a short sale "determine" (I say that loosely because you can't give legal advice as a licensee or Realtor®) if that is the best avenue for them. You want to know if they are candidates for bankruptcy or cram down (when a judge orders the lender to lower the loan), loan modification or possibly foreclosure. Don't advise your clients what to do but recommend them to see an attorney or CPA for expert advice. You, the real estate agent, will have to document all conversations and follow-ups with clients and anybody else you contact in regards to the short sale. If you don't know the answer to a question, don't answer it. Part of our job is to do risk management and especially in these tricky situations it is important to remember that if you overstep your boundaries you expose yourself to liabilities.

The purpose of a short sale is for the lender to release the lien. You should identify whether the lender has recourse or non-recourse. In case of recourse the lender can go after borrower for the outstanding debt so make sure the lender doesn't state (usually in small print) that they have recourse. Again: document all communication and information in a positive way. Read every addendum carefully because they are written to the benefit of the lender not the buyer/seller. The lender can keep the buyer "hostage" for up to 120 days so again be careful and read all addenda. Be mindful of the date you put on the short sale addendum (contract between seller and buyer); without the seller's signature the contract is invalid. It is beneficial for the seller to push that date back as far as they can.

The tax implications of a short sale are different than those of a foreclosure. Foreclosures will affect the seller's credit rating differently than a short sale does but both will be on the record for 7 years. It will take a about 3 to 4 years before a foreclosed on former homeowner will be able to get a market rate loan again.

Let's not forget about the pitfalls for the listing agent of an REO. You become a property manager, general contractor of who know what else you have to do to keep that property attractive and in good shape. Does your E&O insurance cover all these tasks? Read the listing contract carefully and yes, if you want the listing you have to sign it. Be careful that the lender didn't include an addendum which protects them from all liability.

I don't claim to be an expert on short sales but just want to share and recap what was discussed.

Customer Service is ........

Putting the customer first!

I had just moved to Gilroy and decided to stop by a local farm market which I had passed many times but never stopped at. I heard that the produce there was the best and one day on my way home from a swim meet in San Jose I stopped on Masten Avenue to visit the farm stand.

Everything looked so fresh and yummy and I filled up my basket. When it was time to pay I realized I didn't have enough money to pay for the produce. I don't know if you every found yourself in this situation but I was totally embarrassed. I started to put what I didn't immediately need back in the shopping basket. The nice lady who helped me (later I found out she was one of the owners) told me that I could take everything home and just pay her the next time I came in. She told me that "it would bother me more than her" if I didn't repay her. Of course I made an extra trip two days later to pay her and she gained a loyal customer. That is customer service!

Now I don't mean to tell you that you need to do this in order to serve you customers well but I have never forgotten the extra effort and kindness the owner extended and that is what we need to do in our service oriented business. Stand out from the rest by providing excellent customer service and put the customer first. We can't expect to be rewarded for every little thing we do or only work if the result is a sale or instant gratification.

Too often we forget the saying that "The Customer is always right!"

And the good news is ……… A new research report from the National Association of Home Builders “found that affordability of houses is now at its best level in years.” When I look at the statistics of my local market I tend to agree. Home values dropped 37.5% ($390,000 vs. $624,000) last quarter compared to the same period the year before. According to a study 62.4% of median income families could afford to buy a median priced home compared to only 47% the year before. These are encouraging numbers. In February we had a few more listings, fewer sales and homes were on the market a bit longer than the month before. However, the medium sales price increased slightly. March sales are off to a good start with 13 homes sold as of today.

We are sliding down to the "bottom" - When will we know when we arrived?

We all have been bombarded with negative reports on the housing market and our economy. We have seen our home values plummet. We anticipated that the new bailout program was going to "save" us.

These negative reports drive the economy further down and create a down spiraling effect. Consumer confidence dropped to an all time low of 25 last month, the lowest it has ever been, and worries about job security and dwindling net worth can perpetuate this effect.

Last year 22.2 percent of homeowners in our fine state of California, sold their homes at a loss.

Nobody can predict when we have reached the bottom of the real estate market. We will know that when we have "left" that point and home values come up again. We can predict which direction the market will go by monitoring the statistics. What is the average time a home is on the market, how many homes are closing each month and what about inventory; is it shrinking or increasing?

In Gilroy we have seen prices drop a stunning 37.5% ($390,000 vs. $624,000) last quarter compared to the same period the year before. Gilroy has been hit harder by foreclosure than other cities in the Bay area. Unfortunately, a number of these foreclosures include homes financed by poor lending practices. A fine example is the single family home purchased for $1,350,000 in June of 2006 and recently sold for a "mere" $630,000 (53%). That is not the only home sold in that area for this low price. It's a domino effect.

Because of "fraudulent" practices in the past and other poor lending choices consumers made, either due to misinformation or other reasons, our home values keep dropping. This not only affects the people who "choose" these loans but also the homeowners who have not taken chances on subprime loans; those who work hard to make their monthly payments; those who didn't "cause" this increase of foreclosure and decrease of market value to their largest investment: their home.