Lee Ginsburg

Buyer's Market? You bet it is. I will be speaking about the low end of each market area. On the Peninsula and San Francisco we talk about Single Family homes priced under $700,000. In the East Bay it is below $400,000. Buyer's Market yes but not in the traditional way. Today's buyer cannot expect to purchase a home for 20% off the list price, but they can expect to purchase a home 30-60% off of 2004 prices. Today's buyer cannot expect the seller to take care of all necessary repairs, but the buyer can expect to receive an $8000 Federal Tax Credit and an extra $10,000 State Tax Credit if they are purchasing a brand new home. Today's first time buyer cannot expect to be the only offer, but they can expect to receive the lowest interest rates in 40 years. I think it is just in a different way.

The Real Estate Market in San Bruno, South San Francisco, Daly City, San Mateo is hot just like the weather. Prices are based on supply and demand. Demand is strong as all smart people want to take advantage of the buyers market. By the way the $8000 Federal Tax Credit terminates Nov. 30 of this year. many people do not understand this credit. It is a true gift. When this concept was originally introduced the credit was really a loan and needed to be paid back. In 2009 it became a true credit. You could just amend your 2008 taxes and receive your check in less than 2 months is what many buyers have seen. Other are choosing to claim it when they file 2009 taxes. Inventory is drying up. Please look at the chart. We are seeing less homes for sale today than we had last month or last year. If you remove the short sales that have received offers (maybe 25% of the homes available we are probably close to the inventory of the hot market in 2005. Please not the difference in the higher end and lower end of the markets.

Information deemed reliable but not guaranteed.

You are among the millions underwater and over stressed. What shall you do.

Your credit will be most negatively affected with a Foreclosure, then a short sale. As long as you stay current on your loan, loan modification should not affect your credit. Your credit score weather it is right or wrong is used by potential employers before hiring, landlords before renting, insurance companies before granting insurance and etc. Depending on your individual situation maybe credit is not important.

My client's father nearing retirement age could live in his son's rental unit and will not be looking for another job said he might pass away before his home in Las Vegas is worth as much as as his loan. He opted for foreclosure.

I had another client, a family with parents and adult children living at home. They came to me for a discussion on their options. They are still working and acquiring things so their credit score is important to them. Being an immigrant family losing their home, the "American Dream", would be extremely emotional and their image amongst friends and family here and back home would be devastated. They struggled making payments, but after family members lost two part time jobs they couldn't do it any more and came to me for help. They pondered the situation. Should they continue making payments on a home that they owe $250,000 more than it is worth. They purchased this home with no money down and realized they would probably never be able to save the 10-20% now required down payment to purchase another home. They opted for a loan modification. They were hoping for some debt forgiveness.

Their bank would not hear from that. But with persistence similar to a short sale approval I was able to get the bank to modify their 6.5% fixed interest only loan to a Principal and Interest loan starting at 3% for five years, 4% for 1 year and 5% for the next 34 years. Before that, the second lender agreed easily to modify their 8.5% loan to .31% yes .31% not 3.15 but only for 1 year. We will follow up with them in a few months. With home ownership tax benefits their new payments are now about the same as rent would be. They are thrilled, knowing they will now be able to afford the "American Dream". During these negotiations I had them apply and they were approved for a property tax reduction with annual savings of almost $3,000.

I was told during this process that each loan holder not necessarily the servicing bank has their own set of ratios and criteria for loan modification. This worked out to be win-win situation. Their lender will receive their full payment over a longer period of time rather than losing several hundred thousand dollars during a short sale or incur thousands of dollars for foreclosure expenses.

We have all read that more than 50% of loan modifications are defaulting. Maybe it depends on the modification. I recently reviewed a loan modification for a client that was in default. In November her loan was modified from 8.4% to 7.9%. Maybe $100 reduction and then they had the nerve to add on another $550.00 per month to bring her current. Her payments were $400.00 more than before the modification. If I did not see it myself I would not believe it. What were they thinking? It is no surprise she is in default again only 4 months later.

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Many sellers are determined to set their listing price higher than they are willing to accept so they have room to negotiate. With the New Millennium buyers they unfortunately will not get any offers. Today's buyers are more educated than any others. The internet gives the buyers the opportunity to research all public records. They know the price of all the homes in the area that sold recently and are on the market. They know the trends, the cost per square foot; they know what the seller paid for the home and how much they owe and sometimes the improvements the owner has completed. If a home is over-priced the "New" buyer is almost offended that someone would expect them to purchase it at the "Over Valued List Price" so they don't even make an offer. Many don't even waste their time to view the home. That is the old school pricing method. My parents would have done that. Back then information was not so accessible. With today's buyer's research and knowledge they are willing to pay over the list price because they realize they are not paying over the market price. They are just paying over the list price. The old school seller does not understand this new Price it Right philosophy. It is the responsibility and ethical obligation of the professional honest agent to advise the old school seller that their price is too high and to educate them to the New Pricing Philosophy. If not, the seller will not get maximum value. Although the Old School Seller will reluctantly reduce the price after a few weeks it is too late. That property is now stale. It quickly gets a reputation that something must be wrong with it mentality by the buyers and some agents. This property may not deserve the reputation but it sticks. When an offer does come in it will be less than the reduced price and less than the market value. If it was priced right at the beginning most likely they would have received several offers within a week.

Buyers are out there. Homes in San Bruno and South San Francisco priced right are having 75-100 potential buyers view their home during the Sunday Open Houses. Homes not priced right get less than half that. I personally know of eight homes in San Bruno and South San Francisco that went on the market priced right and within the first week received multiple offers and sold at above the Listed Price. Not by much but they sold while others not priced right are still on the market. Sellers must understand that for every week their home does not sell it is costing them .25% or more.

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30% of Real Estate Deals Don't Go Thru. Maybe it is more, maybe it is less, but that is a pretty good estimate. So what does that mean to buyers and their agents? It means the property you lost out to in multiple offers or just because someone was faster than you does not mean it is gone forever. We all know that a ratified offer on a short sale means nothing until the lien holders agree. Many REO's and individual sales are falling through today. Many buyers, especially first time buyers get concerned when a property falls out of contract. They think there is something majorly wrong with the property. Properties fall out for various reasons today, some for financing issues, property condition issues and just plain "Cold Feet". One property that fell out and I was able to get into contract for my client was across the street from a school. An elderly couple's offer was originally accepted on it and upon more thought and said at their age they preferred not to be across from the school and cancelled the contract. For my clients being across the street from a school was a benefit. So you never know. Keeping in touch with the listing agent is not enough. It is important to watch the MLS I have found busy listing agents change the status in the MLS and do not call the previously interested agents. I made an offer on an REO. It fell out; I contacted the agent immediately and requested she submit my original offer. She said she had no record of my previous offer and please resubmit. It leads to wonder if my original offer was ever submitted. That is another subject.

In the past, after the two week contingency period is over we would consider it a solid deal. Not in today's market. Banks are forever requesting more information, buyers continuously get nervous, lose their job or have an accident. One quick story: Two days before closing, loan docs signed and ready to fund the buyer gets a DUI, loses his license and cannot purchase the home because it was too far from his job. I felt like an ambulance chaser but my client jumped at the opportunity to purchase the property he thought was gone. Originally they were upset they lost this home and couldn't get it out of their mind. They compared everything we looked at to that. When I called them with the news they were thrilled and couldn't write the check fast enough. Inspections went smoothly also. I was a hero.

What to do as a listing agent to prevent deals falling out? Keep a record of every agent or buyer that makes contact with you concerning the property and contact them immediately after a deal falls through (maybe even when you get that feeling). When accepting an offer request to see proof of the down payment, question the lender how thorough they were in qualifying the buyer, question the agent as to how serious, motivated and experienced their client is. Have they made other offers? Are they homeowners? How long were they looking for? A listing agent can do and must do the above when they have multiple offers. Price is important but should not be the deciding factor. If you have no other offers ask some questions and keep your fingers crossed.

Every Negative Has a Positive
Positives of This Economy

•1. Bay Area Housing Affordability has gone from 16% to 38%

•2. Debt of Americans is Decreasing.

•3. A Large Increase in People Volunteering.

•4. A Large increase in Military Enrollment.

•5. First Time Home Buyers can get an $8000 Tax Credit.

•6. Buyers of California New Homes can get a $10,000 State Tax Credit.

•7. People are able to modify or refinance their loans to an affordable payment.

•8. Businesses have the opportunity to clean up their books and start fresh.

•9. Great Opportunity to Purchase a new car or any other major purchase.

•10. Tax on Debt Forgiveness is waived.

And one of my favorites; you can Buy any Foot Long Sub for only $5.00

Please add to this list of Positives
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