James Malanowski - REO Broker - Palmdale, Lancaster, Rosamond, CA

Just when you thought it couldn’t get any harder to qualify for a home loan …

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When I saw this I just had to share! Back on October 10th our Governor sent out a batch of vetoes. Included in the stack was AB 1176 which was supposed to raise property taxes in the San Francisco Bay area and allocate 20% of the increase to rehab and preserve Pier 70 (see a short fact sheet on the project here). This bill was proposed by Assemblyman Tom Ammiano, (D-San Francisco) recently told Arnie, who crashed a Democratic fund-raiser that Ammiano was attending, to kiss him where the sun don’t shine!

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This is #1 of a 9-part series highlighting new and/or updated laws as of the closing of the October 2009 legislative session affecting buyers, sellers, and real estate agents in California. Subscribe to this blog so you won't miss the rest of the series!

Assembly Bill 957 - Signed into law by Gov. Schwarzenegger on October 11, 2009 and stays in affect until January 1, 2015 is known as "The Buyer's Choice Act."

Before we go into the purpose of The Buyer's Choice Act, let me give you a little of the back-story ...

The process of buying a bank-owned (REO) property can be stressful on buyers here in the Palmdale / Lancaster area. During a time in which most foreclosure buyers think that they should have all the control - Hey, it's a Buyer's Market, right?! - when they actually get into the process of negotiating an offer on the home they've decided on they realize that they don't have as much power as they thought ...

The actual process of the REO home purchase is a topic for another post, but let's just say that the bank likes to play hardball and twist some thumb screws with their pages of additional addenda to the California Residential Purchase Agreement. Part of the fine print usually defines which companies the bank wishes to use for escrow and title services. The REO Seller has most likely chosen these services for the following reasons:

• The escrow and title fees have been negotiated upfront. Due to large volume the escrow and title companies have given the REO seller a discount.
• The escrow and title officers have been trained in the systems and procedures of the REO seller. Banks have a large amount of foreclosures that they are working with, so to keep the processes easier and uniform they like to make sure that every file will be handled the same way and all the necessary internal forms are used.
• REO departments like to have a single point of contact. One stop for all the REO files is much easier to keep track of for them.

Now, the problem we are running into here in Palmdale and Lancaster, is that 9 out of 10 bank-owned sales are placed into escrow with a company that are far from local. This sometimes makes it harder for agents and buyers of the REO properties to get paperwork to escrow or for the buyer to go into the escrow or title office to sign loan documents. This has also made a huge impact on the local Antelope Valley escrow and title offices. Many of the smaller escrow companies went out of business in the last couple of years since the real estate bubble burst and even the larger companies have either closed or consolidated their Palmdale and Lancaster branch offices. This has caused several job losses here in the Antelope Valley!

So, I told you that story to tell you this one ...

It has long been California law that the choice of escrow and title services are to be negotiated by the buyer and seller as part of the offer/counter offer process. Although some agents may say that the buyer doesn't have the choice, that has never been the case. The problem has been that some REO sellers that are not familiar with California law are telling buyers, through their pre-printed addenda, that they have no choice ... It's either the bank's way or the highway!

The purpose of The Buyer's Choice Act is to prevent the REO buyer from feeling like they are being strong-armed into using services they may not wish to use. The Act requires that the REO seller provide a disclosure to the buyer stating that the buyer has the right to request that other escrow and title services be used. The Act does NOT hand the control to the buyer and force the seller to use the buyer's preferred escrow and title services - This would be just as bad.

So, does the Buyer's Choice Act really help the buyer? Possibly ... It will require that the REO agent disclose that the buyer can negotiate their own escrow and title services BUT the REO seller still has the right to tell the buyer to go pound sand!

My personal opinion is that the Buyer's Choice Act was lobbied for by the escrow and title companies that were losing business because they weren't able to strike a deal for the foreclosure business that some other companies did ... I can't say that I blame them. I miss using my local escrow and title officers too! This may help bring some business back to the local Palmdale and Lancaster businesses (and that would be a good thing!) but the bottom line is, that in this age of the Internet, e-mail, digital signatures, overnight deliveries, etc. it truly doesn't matter where a company is located - what matters is that they do their job and work with the agents, buyers, and sellers to get the REO sale closed!

What do you folks think? Let's discuss it in the comments below!

If you don’t get the reference to the elephant, please take a sec to go read my last post. Go ahead, I’ll wait … Got it? Okay!

So I did some quick research and found that according to RealtyTrac the Notice of Default filings (NODs) in Palmdale and Lancaster has been rising steadily since January. Yes, the elephant is now going to whack the ignorant upside the head!

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Yes, as reported by the AV Press today, home sales in the Antelope Valley (Palmdale / Lancaster, CA) are way WAY up from last year ... here's the numbers released by the Greater Antelope Valley Association of REALTORS:

• 773 homes sold in March 2009 (282 in March 2008)
• 2111 Homes sold Jan 2009-Mar 2009 (654 sold Jan-Mar 2008)
• Average sales price $129,390 in March 2009 (DOWN 46% from March 2008)
• Average sales price $140,401 Jan-Mar 2009 (DOWN 44% from Jan-March 2008)
• About 2500-3000 active listings (DOWN from about 5500 Q4 2008)

So what does this mean? A few things, in my opinion.

First of all, prices are at a level that many homes can be purchased here in the Palmdale / Lancaster area for about the same or less than it costs to rent. Why throw your cash down the toilet by handing it to a landlord when you can be buying your own piece of the American Dream?? If you have good credit and can prove your income, there are plenty of banks dying to give you a loan contrary to all the BS most media outlets (or even your own President for God sakes) would have you believe! Loans are being made every day and I've got the closed transaction history to prove it!

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