Steve Mun, e-PRO®, QSC®, CDPE® (650) 605-3188

As most working Real Estate Professional will tell you now a days, the rush is on to collect the government tax credit. Just as cash for clunkers had lit fires under the feet of potential car buyers, the same is true in the real estate industry.

First time home buyers are trying to collect their just rewards, and many know that the property must close escrow by November 30, 2009 to qualify. End of November seems like a long time off, but here is some food for thought because I don’t want you to lose out on technicalities.

Let’s consider that November 26 is Thanksgiving this year. Let’s admit it, most of us are procrastinators, so we will push the envelope and wait until the last moment to get in the door. Case in point, look at the lines at the post office at 11:30 PM on April 15 of each year.

The number of people trying to close escrow on November 30 will be overwhelming and it is also a Monday. But here is an insider tip in Real Estate: avoid closing escrow on Mondays and Friday because government employees at the County Recorders Office have higher rates of absenteeism on Mondays and Fridays, so the office will be under-staffed and the likelihood of your deed not recording on those particular days increase dramatically.

As Thanksgiving is on November 26 this year, we can pretty much eliminate all of that week, meaning November 23 through 27. But remember, we will have probably hundreds, if not thousands, of people trying to get their $8,000, so the County Recorders Office will be overwhelmed compared to normal number of closings, but given the current budget crisis in California, I doubt your County will hire extra staff or provide over time to handle the extra influx of closings. I could be wrong, but do you want to make an $8,000 bet on that? This is a government credit program, if you miss your filing deadline for whatever the reason, do you want to challenge the bureaucracy and hope you they will take your side?

To compensate for the overwhelming number of people wanting this credit (see Cash for Clunkers above) a safe move would be to close escrow probably at least a full week before Thanksgiving (that means November 19); I would even argue a week before that or November 12. But wait, we need to discount 30 days for escrow time, so we will need to find, negotiate (in probably multiple offer situation) and be in contract by October 12, 2009 to insure you get your $8,000 credit. October 12 is not that far off……

I have been running around for the last couple of weeks trying to put in offers for a client trying to purchase a single family residence for in San Jose, Milpitas areas for less than $400,000. Needless to say, we've been beat out a few times in multiple offer situations. Many of the REO agents do not return phone calls, so I never really got direct feedback as to how many offers we were up against. On one property, within 2 hours after it hit the MLS (before I could even get my clients out to see the place) the agent had accepted an offer and changed the status to pending. Yeah, the competition right now is that fierce.

Here is an article in today's Mercury News which shed some light on the competition that is taking place in REO properties. Some people who are not in the market, still do not believe me when I tell them how fierce the competition is and how multiple offers are the norm now for these types of properties. (Can you imagine being up against 111 other offers?) Even in my capacity as a short sale agent in san jose, I've received multiple requests for back up offers on my moutain view listing recently.

http://www.mercurynews.com/topstories/ci_13028660

It seems buyers want to make sure they have closed escrow by the end of November, so they can qualify for the $8,000 tax credit. Now tell me that program and the cash for clunkers program are not working to stimulate the purchasing activity of buyers in the market place today.




Steve Mun
www.stevemungroup.com

New data released reveals that 9.5% of home loans in California are in default. Sub prime loans seem to be the concern of the past and now unemployment seems to be the number one reason why people default on their loans. The data is fairly consistent with California's unemployment numbers.

Although we may already have by-passed the bottom of the housing market, in order for us to see dramatic improvement, we must address the unemployment issue. Want to see more people buy homes? Give people sense of security about their jobs. People who feel secure about their employment buy homes. People who are insecure about their employment status do not buy homes, even if they have the financial wherewithal.

Given that NUMMI may be shutting its doors and laying off 4,300 employees and CISCO just having laid of 700 employees, it seems pretty certain that we in Silicon Valley will be seeing an increase of default activities and short sales in the coming months along with an increase of unsold inventory.


Steve Mun, Silicon Valley Realtor
www.stevemungroup.com

Here we go again......

Another so called "attorney based" loan modification company based out of Southern California, has been identified and it's inner workings revealed by local and Federal law enforcement agencies. This particular operation was charging $1,000 up front fees but were helping only 1 out of 10 people who needed their assistance. Their operation was so big, that they were spending $70,000 per week on radio and television ads to target their victims.

Lawyers and law firms -- unlike Real Estate licensed professionals who are prohibited from taking up front fees -- are able to collect said fees; to exploit this loop hole, these operations are hiring law students to create the illusion that they are law firms or affiliated with law firms.

For those of you who have read my previous posts regarding this matter which is my personal crusade, my singular mantra: DON'T PAY UP-FRONT MONEY TO ANY LOAN MODIFICATION SPECIALISTS. Legitimate organizations are out there which will help you free of charge or point you in that direction or you can do it yourself.

Please tell everyone, so people in difficult situations will not be duped twice.

Steve Mun, Silicon Valley Realtor
www.stevemungroup.com

Now you can finally put faces behind the scammers who are taking advantage of people who are in dire straits. Unfortunately, we will probably see more of these types of arrests as law enforcement agencies are just scratching at the surface of these scams. As a short sale agent in san jose, I get to hear a lot of these horror stories.

Just as these two criminals had relocated to Canada to set up shop to run the same scams under false identities, others who are on the list of entities published by the California Department of Real Estate (DRE) will probably do the same. There are numerous scams out there targeting people who are behind in paying their mortgages.

PLEASE, PLEASE, PLEASE, DO NOT PAY MONEY UP FRONT to "loan modification specialists," or "foreclosure prevention specialists," as they are now forbidden to take money until they have completed the services for which they had contracted. After all, isn't that how you do business with other service providers? Do you give your Realtor their commission up front before they close escrow on the property? Do you give loan brokers their fees before you sign off your loan documents with the escrow officer? It is no differnet with these "service providers" they must provide the service first, before they can demand compensation.

Steve Mun, Silicon Valley Realtor
www.stevemungroup.com