Sarah Oswald - YOUR Eastvale Realtor

Interest rates are on the rise in Corona CA

I heard it twice today. Interest rates are on the rise and I am afraid my buyers won't qualify for the property anymore. Realtors are getting busier by the day. We are showing more prospective buyers who are shopping for that special home. Clients within our sphere of influence are actually calling us for appointments. This might be an indication of what we can expect come Spring. However, if you wait for Spring, you miss the chicken.

Mortgage rates have been on the rise for the last month. Buyers who were once on the fence are finally coming to the realization that it might be better to jump back into the market. Investors are trying to snatch undervalued shortsale properties.

The fact that the overall rate for 30 year fixed increased by another five basis points, holding at 5.17 as of February 4, 2011, has many prospective buyers concerned that they might soon be priced out of the market. The market is know to fluctuate quite rapidly once it gets the momentum.

This is good news for everyone, not just realtors. It is a very good indication that the price of homes will soon be on the rise. I forsee more listings as the weather improves. As the market improves, it will uplift the economy. Isn't this what we've all been waiting for?

If you are in the market, contact me or your local agent before Spring arrives. All indications seem to show that the market has already reached bottom.

What are your thoughts on the market for Spring 2011? Are you seeing the same activities in your community?

Bank owned property in Corona, CA

So you only want to buy REO's (Real Estate Owned)or in other words bank owned properties in Corona?. A client called and said they only want to see REO properties. Great, no problem. There are lots of inventory for me to show you in your price range. Now, if I may ask, why do you only want to see REO properties? "It is because they are the best deals. In order to get a bargain one should only concentrate on REO properties. I hear you can get properties that are 50% off the market value and if I can bargain with the bank, they might negotiate another 15% off! It is a great value to purchase REO properties. After all, don't the banks want to get these properties off their books?"

I then had to stop them and be the bearer of bad news. Bank owned properties are usually listed at the market value. One definitely can get a great deal, if:

• they are cash buyers
• large down payments, LTV ( loan to value over 70%)
• it is a distressed property that one may/may not rehab
• undesirable location
• properties with mold, foundation, roof or construction issues
• mainly properties that are not desirable to the main stream population

My next question was whether they were looking for a great bargain or a great value? I heard a silence on the other end of the the line. I visualized a question mark on their faces.

A REO, bank owned properties are properties that can be purchased at substantial discount. Realistically, a cash buyer could purchase a REO property at 10-15% discount off the listed price. That may be considered a great bargain. However, it not a great value unless the purchase meets ones needs. If a buyer intends to reside in the property and is constantly dealing with noise, long commutes, thefts in the neighborhood, one realizes quickly that it was not a great value after all. That it was a bargain. However, if one buys a property on a busy street, that has lots of construction issues, it might be a great value if their intent is to redesign the interior and convert the house into a commercial property (please check with zoning).

Mortgage interest rates have been on the rise the last 2 weeks. If you are in the market for a great REO value, contact our team at 949-892-9677

Why are investors flocking to this town?? What is the attraction?

I been asked that question again today. Why wasn't my offer accepted? What gives? There are so many homes for sale in this town, why does everyone seem to want the property that I have an interest in?

LOCATION, LOCATION and LOCATION.

The city of Eastvale is the newest city in CALIFORNIA. It was incorporated October 1, 2010. It officially openned its door for business on October 4, 2010, shy of four months after voters passed Measure A in favor of incorporation in June. Its newly elected mayor Adam Rush is "thrilled that Eastvale residents will now enjoy local control of the services that will shape our community." The city hall is located at 6080 Hamner Avenue, Suite 103. The city's new phone number is 951-277-0900.

Eastvale is a city located just northwest of Riverside County, California, the Inland Empire region of Southern California. Its boundaries extend from Hellman Avenue to the West, Bellgrave Avenue to the North, the Santa Ana River and Norco to the South, and interstate 15 to the East. The Eastvale area is often incorrectly called Corona, Corona Valley or North Corona. Location of this city is perfect for commuters who work in surrounding counties. Los Angeles County line is only 8 miles northwest of Eastvale, while Orange County is approximately 5 miles to the southwest. It is surrounded by California State Routes 91, 60, 71 and the 15. It is the commuter town conveniently close to any county that you need to drive to.

This newly incorporated city was once a rural area, predominantly dairy farms and agricultural until the late 1990's. The area grew due to an influx of people coming from the predominantly neighboring counties of Orange and Los Angeles seeking affordable housing. Houses were sold during mid 2000's at inflated prices due to the subprime mortgage industry. By 2007, an average 5 bedroom, 3500 sq ft house sold for over 700k. There were waiting lists for buyers who intended to purchase brand new construction. By the middle of 2009, according to Zillow, most of the prices had fallen to the low 300k's. That is more than a 50% decrease in home value during such a short period of time.

The population of the city in 1990 was 1,587. By 2000 it increased to 6,011. The estimated population for 2011 is 47,635. As you can see, it is still an attractive and desirable area to raise a family. Location has always been a factor, followed by what one can get for their money. The average household income is $89,173 and medium income is $78,491. This new city is about 30 miles from the beach, 50 miles from snowy mountains and 40 miles from the High desert and therefore surrounded by all four seasons as well. We are now seing major businesses moving into the area making it all the more attractive. However, an increase in population is never without its own problems. The major drawback is traffic...

So what is the attraction, you ask? It is still LOCATION, LOCATION and LOCATION.

The subprime melddown left a lot of homeowners, most who where first time buyers just starting off as a family, in a lot of trouble. Every block you will find at least one shortsale home, REO or foreclosed home. But the neighborhood still has its appeal. These distressed homeowners vacate their houses but still decide to remain in the community and the majority of them turn around and rent neighboring houses. Location is great, houses are immense ( range is 2500 to 4500 sq feet homes) and the rental price is very reasonable. They have the convenience of upgraded new homes, parks, new schools and proximity to neighboring counties and attractions.

Here is where investors are seeing dollar signs. They are investing in this city in grooves. Some as far as the mainland China and Europe. We have seen a lot of cash transactions lately. These investors are betting that the value is not only on the future appreciation of the houses, but also monthly cash flow from the renters. As the supply of rental houses dwindle due to extended foreclosure and shortsale procedures, we are seeing an uptick in the rental market in the area. Properties with good location and upgraded ammenities are being snapped up within days of listing.

This is why LOCATION, LOCATION and LOCATION is still the name of the game.

Now you know the secret...

Why is shortsale prefered over foreclosure?

Firstly, shortsale is preferred over foreclosure because it may not damage a distressed homeowner's credit report and/or ability to obtain a new loan finance as much as a foreclosure. A homeowners will be able to qualify for a new loan owed by Fannie Mae much sooner than if they allowed the property to foreclose.

Secondly, and most important is that it lessens the impact in the community.

Some of the comparison are as follows:

Issue Shortsale Foreclosure

1.Credit Report Does not appear on credit report Foreclosure remains for 7 years

2. Ability to obtain a new loan Eligible after 2 years Eligible after 5 years

3. Ability to obtain a FHA loan Eligible after 2 years Eligible after 3 years

4. Allowance AFA has moving allowances No moving allowance

Under HAFA shortsale, it requires the borrower to be fully released from futuree liability for the first mortgage debt and, if the subordinate lien holder receives an incentive, that debt is also eliminated.

Shortsale Optimum Solutions (SOS)will pay 30% referral fee. Don't have the time for paperwork or the daily communications that is required with the lenders? Give us a try, you will be impressed.

Hafa improvements for 2011

Hafa is designed for homeowners who are showing signs of hardship and are unable to continue their mortgage payments. The hardship may be due to job loss, cut in hours, cut in pay, medical or other unforseen situation.

A Hafa shortsale is an option that homeowners should pursue. During 2010, the Hafa program was initiated to allow homeowners an opportunity to sell their home at a net proceed that is less than what is owed to the lender. No out of pocket is expect from the homeowners, most of the expenses such as commission, escrow, closing fees are paid by the lender. This allows the homeowner the opportunity to walk away and start anew.

Hafa provided financial incentives up to $3k to homeowners to help with the relocation assistance, $1,500 to mortgage servicers to cover administrative costs, $2k to the first mortgage and up to $6k to the 2nd lien holder (based on a one to three matching basis).

Some of the benefits of Hafa is that the servicer must consider a homeowner for Hafa within 30 days after they been turned down the Hamp program. Documents are usually automatically transfered to the Hafa dept. Homeowner have up to 120 days to sell a property. The greatest advantage to the program is that financial documentations are no longer required. A signed harship letter is all that is needed. This will speed up the shortsale process in most instances. I believe this is a positive improvement to the Hafa program. This in turn will slow down the decline of home values in our communities.