Melissa Bayles

How Important is Pricing When Your Decide To Sell Your Home? There are a couple of ways to look at this... You can price it really high and try to get force the market to come up to your level of pricing or you can price it correctly. The most important thing to remember when pricing your home is this: if you get a buyer who is willing to pay a certain price for your home unless that buyer is an "ALL CASH" buyer you also have to remember that the buyers lender/bank is going to send out an appraiser and rest assure they are not going to give someone a loan for a home that is overpriced. The Real Estate Geeks do a complete study of the market for the city you live in, the zip code in which you live in, and also within housing tract so you have a full understanding of what's really going on and what you can expect to happen. No matter where you live please seek out a realtor that is willing to do this kind of homework for you... After all if they aren't willing to do this for you, what are they going to not do for you when you hire them to sell your home?

The first and foremost of importance of getting a home inspection is to know what you're buying. The cost of a Home inspection usually cost the buyer a few hundred dollars and well worth every penny. They will check the entire home and if they find something that is out of their scope rest assure they will tell you to call an expert that knows about what they found. For example if your home inspector see's that the foundation is cracked or separating from the home they will point out the issue and tell you to get a structural engineer or if he/she see's some water stains in the ceilings they are going to tell you about it and in this case I would start with asking the current home owner some questions and then call a roofer. Whatever the case is get a home inspection so you know exactly what you're getting into.

If only the President’s foreclosure prevention plan worked as well as “The Cash for Clunkers,” but it hasn’t. When the administration announced the Making Homes Affordable plan in February of 2009, officials said the hoped it would help 4 million distressed home owners to stay in their homes. As of August of 2009, the administration acknowledged that there are only 200,000 trial loan modifications under way. Clearly, lenders have been reluctant to modify loans. (Moreover, there are good reasons for their reluctance according to a recent study by the Boston Federal Reserve.) Also, many borrowers have turned out to be ineligible for the programs or because they are so far under water or uninterested. Whatever the cause the result is the same: a distressed borrower typically needs to choose between (1) a short sale whereas the lender agrees to take less than the amount owed on the home including all of the closing cost including broker commissions. (2) a foreclosure or (3) a deed in lieu of foreclosure (where the borrower gives back the property to the lender prior to foreclosure proceedings). Now the big question is, which is better for you the borrower? Well, I can’t answer that question for you directly, but I can give you some information on the subject. As a homeowner I would first decide what pro’s & con’s work best for you and you situation … so let’s go over some of these options and some of the pro’s & con’s Before I go any further I want to I want to take a second to warn you, and I cannot stress this enough… No matter what option best suits your situation, please DO NOT pay someone to help you and DO NOT sign over your deed to anyone. There is FREE help so don’t pay for it and there is no reason in the world to sign your deed over to anyone as this is not going to stop your foreclosure and yes this applies to every state. Short Sale: In a short sale, the bank aka lien holder agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is “doing the other a favor”; a short sale is simply the most economical solution to a problem. Banks will incur a smaller financial loss than foreclosure or continued non-payment would entail. Borrowers are able to mitigate damage to their credit history, and partially control the debt. A short sale is typically faster and less expensive than a foreclosure. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer. This is where we come into play… It is imperative we get you a FULL Satisfaction & release in writing. Lenders often have loss mitigation departments that evaluate potential short sale transactions. The majority have a pre-determined criteria for such transactions, but they may be open to offers, and their willingness varies. A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from an appraisal or Broker Price Opinion (abbreviated BPO or BOV). Lenders may accept short sale offers or requests for short sales even if a Notice of Default has not been issued or recorded with the locality where the property is located. You DO NOT have to be past due to do a short sale. Given the unprecedented and overwhelming number of losses that mortgage lenders have suffered from the 2009 foreclosure crisis, they are now more willing to accept short sales than ever before. This presents an opportunity for borrowers who owe more on their mortgage than their property is worth and are having trouble selling to avoid foreclosure as a result. *** The Pro’s: You can remain in the home during the short sale process, you will NOT receive collection calls, there will be no out of pocket expenses (all realtor/broker fee’s & closing cost are paid by the bank.lien holder), you’d have damage control on your credit, and the debt forgiveness act of 2008 will allow you to do a short sale and not pay taxes on the forgiven debt amount. When it comes to taxes please consult your tax advisor or your tax attorney. *** The Con’s: I am a little bias when it comes to short sales so the con of doing a short sale is the upfront paper work & picking the wrong realtor/broker to represent you to negotiate the short sale. Please pick someone who can show you they have closed many of these. Short sales have been around long enough that you should be able to find someone who knows what they are doing. Remember this process is FREE so if someone says they are going to charge you then that is not the correct person to help you. Foreclosure: Once you have missed a mortgage payment or two the lien holder can file a notice a default. Once the Notice of Default is filed a Notice of Trustee Sale will follow within 90 days. The Notice of Trustee Sale is good for 21 days. This simply means your home will be put onto the auction block in 21 days after the Notice of Trustee Sale is delivered. During this entire period you may bring your home back to a current status or allow them to foreclose. In most cases the banks will not take a partial payment. Once the bank forecloses on the home you will receive a 3 day notice to vacate at which time you will have to leave the property. *** The pro’s to this process: You’d have about 4 to 5 months in the home *** The con’s to this process: You’d still receive collection calls, notices in the mail, and possible damage to your credit for 5yrs. to 10 yrs. Deed In Lieu of Foreclosure: The deed in lieu of foreclosure offers several advantages.The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does. In order to be considered a deed in lieu of foreclosure both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender. Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations. Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached. *** The pro’s to this process: You’d have more control as to when you’d need to be out of the home, you’d avoid collection calls, and depending on your circumstances your credit score *** The con’s to this process: You’d still receive collection calls, notices in the mail, and possible damage to your credit for 5yrs. to 10 yrs. Loan Modification: Your first step to a loan modification is to figure out where you stand financially. In order to know exactly where you stand you will need to make a list of all of your bills that you pay even if they aren’t a monthly bill. Please make sure you break all of your bills down into a monthly payment and add them to your list. Once you have this list of bills sit down and try to figure out how much you have coming in and how much you have coming out with just that list of bills. Then you’ll know exactly what you have left over for a mortgage payment. Now before you call the lender try to figure out what the bank can do to help you lower your payment. Please know they will not lower the balance, but they can lower your interest rate if you qualify. There are online mortgage calculators to help you try to figure out what interest rate will work for you and then call them. Explain to them what is going on and be as honest as you possibly can be. Please note this process is just that a process… I have heard this process has taken up to a year to accomplish, but also note that if you are behind in your payments they can still foreclose on you. Let your lender know you are looking to change your mortgage terms of your loan to make it more affordable. For more information on how to sell your home or buy a short sale give us a call Melissa Bayles 714-720-2555 Chip Esajian 714-272-5369

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

I thought I would do something a little out of the box this morning... I can post blogs and send out data all day long, but this time I wanted to hear from you. I want to know what all of the first time buyers are thinking and what the investors that are out there thinking about todays real estate market. As you know it changes in a heart beat and that's okay I won't hold you to any of the answers just wanted to hear from you today.

With Southern California seeing it's lowest inventory in 3 years...

What kind of market do you think it is?

What do you think is going to happen to the inventory levels in the next 3 months?

What do you think is going to happen to the prices in the next 3 months?

What do you think is going to happen to the interest rates?

Will the $8000 tax credit for first time buyers disappear on December 1st 2009?

I look forward to reading your thoughts!

Melissa Bayles

The Real Estate Geeks

www.TheRealEstateGeeks.Net

info@TheRealEstateGeeks.Net