Mike West

El Dorado Hills, CA REO (BANK OWNED) SALES DATA FOR SEPTEMBER 2009

This is a continuation of my monthly report on Bank Owned home sales for El Dorado Hills, CA. This report covers REO homes sold in September of 2009, the latest in my study of over two years.

There were 14 REO homes sold in September, four more than sold in August. The average days-on-market dropped drastically to eleven, down from 36 days in August. REO homes are selling like hot cakes. Of the REO homes sold, 35.8% were on the market for less than two weeks. The longest one on the market was 23 days.

The 14 homes sold represent 34.2% of all homes sold in El Dorado Hills, up from 26.4 in August.

The cost per square foot of REO homes in June increased to $ 158, up from $ 144 in August. The cost per square foot of all homes sold in September increased seven dollars, to $ 168.

The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO sales represented a 5.9% savings for REO buyers.

The overall sales price for REO homes was 102.7% of the final asking price. Worthy of note is the fact that only one of the REO homes sold did so for less than the asking price. The limited inventory and aggressive pricing result in offers at or above the asking price; the only way for buyers to get their offers accepted over competing buyers.

The actual, measurable savings is the difference in cost per square foot between REO homes sold and the cost per square foot of all homes sold: in September, $10 per square foot. That is a $ 25,000 savings on a 2500 square foot home, a tidy sum.

The data follows:

Folsom, CA REO (BANK OWNED) SALES DATA FOR SEPTEMBER 2009

This is a continuation two year study of Bank Owned home sales data for Folsom, CA. This report covers REO homes sold in September of 2009.

There were 11 REO homes sold in September, one more than sold in August. The number of available REO homes has been drastically reduced. The days-on-market dropped from 22 in August to 20 in September. 54.6% of the REO homes that sold were on the market less than two weeks. One home had been on the market for 83 days.

For the second month in a row, none of the REO homes that sold were on the market for more than 90 days. Most are well priced when they hit the market and they are not lasting long.

The 11 homes sold represent only 19.3% of all homes sold in Folsom, similar to the August number.

The overall home inventory in Folsom is presently 265, a 4.7 month inventory, down from 5.3 in August, indicating a continuing seller's market. At this rate there will be a shortage of available homes very soon.

The cost per square foot of REO homes in September decreased to $ 170, down from $ 179 in August. The cost per square foot of all homes sold in September decreased to $ 182, down five dollars from August and the same as reported in July.

The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO sales represented a 6.6% savings for REO buyers. This number has been trending down for several months. Short sales are having an impact here. So REO sales are not the savings for buyers that they once were.

The overall sales price for REO homes was 103% of the final asking price. In September only 27.3% of the REO homes that sold did so for less than the asking price! The market has changed once again.

However, the banks are still pricing these homes well and in September there was a twelve dollar per square foot savings, compared to the cost of all homes sold. That is still a $ 30,000 savings on a 2500 square foot home, something worth considering when selecting a home.

The data follows:

This is a situation that is unfolding at the present time. I am passing it on so that others do not fall prey to the stupidity.

I listed a home as a short sale after the lien holder had recorded the Notice of Default and Notice of Trustee Sale. The seller had already made an unsuccessful attempted to obtain a loan modification with Wells Fargo. Time was short, so I priced the home aggressively at $ 340,000.

There was a flurry of activity and we had six offers in the first week, including offers over $ 400,000. I submitted the highest netting offer to Wells Fargo and they sent an appraiser to do the BPO. The appraiser told me that it would take a week to get the BPO into the lien holder. At that point we were firing on all eight cylinders.

Two days after the BPO got to Wells Fargo my seller got a call from them advising that he still might be able to get a loan modification, but that he could not pursue the loan mod and short sale at the same time. Naturally, he selected the loan modification. Wells Fargo postponed the trustee sale and our short sale process came to a screeching halt.

The loan mod dance went on for weeks. The buyer with the highest netting offer got tired of waiting and pulled the plug. I put the listing back into Active Short Sale status and the calls and showings started up again.

Last week my seller got a call from an agent, out of the blue, advising them that Wells Fargo had already foreclosed and that they were going to have to move out. He has yet to receive any documentation from Wells Fargo since the Notice of Trustee Sale on July 2^nd.

Apparently, the loan modification department and the department that handles the foreclosures don’t bother to talk to each other unless it is convenient for them to do so.

When they got the agent’s call there was no record of the foreclosure in the county records, but of course, with the county staff reductions they are behind in their updating process.

My seller called Wells Fargo to find out what was going on and they told him that there were no records of his communicating with them for several weeks. He only has cell phone and land-line phone records proving the existence of his calls.

It is not a coincidence that when my seller made the decision to pursue the short sale the information went through the Wells Fargo system at the speed of light. However, when it was not convenient for them to admit their stupidity, they have no record.

Yesterday I got a call from my title rep advising that indications are that Wells Fargo now owns the property and that they paid $ 375,000 at the trustee sale! I will not be able to get confirmation until Tuesday.

This is another BRILLIANT move by a lending institution that has received millions of dollars of our (TARP) tax money. Had they not interfered with our short sale process they would have netted considerably more. They spend between $ 40,000 - $ 60,000 to complete the foreclosure that was not necessary, and ignored an offer for more than $ 400,000!

Now they are going to have to get an offer for over $ 450,000 to match what we had going: not a likely prospect. Of course, we do not know how much they may gain from our government--FDIC guarantees and the like.

The important lesson is that once they file a Notice of Trustee Sale, the lien holder can drop the dime on your seller at any time that suites their fancy. To them, business is business, no matter how POOR the business decision happens to be.

The only thing that is vaguely fair about this incident is that Wells Fargo is going to take a bigger financial hit than was necessary.

Pass the word to other agents and sellers so that they do not fall into a similar trap!

Every once in a while some regulatory or professional organization does something right. It is frequently too little too late, but it is at least a small step in the right direction, hardly a giant leap for mankind.

The California State Bar has announced the recent launch of several investigations against attorneys for misconduct related to loan modification services. This time their process was done right in that they are actually publishing the names of the unusual suspects to protect the public! The California Bar Association reports that these attorneys have “allegedly taken fees for promised services, but failed to perform those services or even communicate with their clients who face the possible loss of their homes. Their non-attorney staff may also be under investigation for unlawfully practicing law.”

They go on to mention that not all attorneys engaged in loan modifications are unscrupulous. The intention of the State Bar is to caution consumers to be careful when dealing with attorneys and others who purport to be able to obtain loan modifications.

They state that “Scam artists may intentionally associate or affiliate themselves with attorneys in an attempt to lend credence to their fraudulent schemes. The list of attorneys currently under investigation is available at:

http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395.

Good for the California Bar. Now where are the other state bar associations on this issue? The California Department of Real Estate has their suspect list, which is 100 times larger than this sixteen. What about other professional as well as state and federal regulatory agencies: where’s the beef?

El Dorado Hills, CA REO (BANK OWNED) SALES DATA FOR AUGUST 2009

This is a continuation of my monthly report on Bank Owned home sales data for El Dorado Hills, CA. This report covers REO homes sold in August of 2009, the latest in my study of more than two years.

There were 10 REO homes sold in August, down from 22 in July. The average days-on-market increased to 36, up from 33 in July, largely because one sold home was on the market for 169 days and represented 10% of the sales. However, a full 50% of the REO homes that sold were on the market for less than two weeks. REO homes are still selling quickly.

The 10 homes sold represent 26.4% of all homes sold in El Dorado Hills, down from 31.5% in July. There are fewer REO homes on the market.

The overall number of homes sold in El Dorado Hills in August dropped considerably from 70 in July to 38 in August.

The cost per square foot of REO homes in June decreased to $ 144, down one dollar from July. The cost per square foot of all homes sold in June decreased to $ 161, also down one dollar from July.

The overall sales price for REO homes was 103.2% of the final asking price, and 99.9% of the original asking price. The banks are pricing these homes well and they are selling fast. The bargains that were once available no longer exist.

The actual, measurable savings is the difference in cost per square foot between REO homes sold and the cost per square foot of all home sold: in August, $10.50 per square foot. That is a $ 26.250 savings on a 2500 square foot home, not a small sum.

The data follows: