Looks like there is a new bill out there making its way through the Senate...one of the elements of the "Foreclosure Prevention Act of 2008" is offering a $7k tax credit (spread out over two years) to those folks who purchase a home in the process of foreclosure or that has been foreclosed. Interesting to see if this element of this legislation makes it all the way through the process without getting scrapped...or if this bill goes anywhere in general.
There are other elements of the bill that seem great - such as pre-foreclosure counseling and more mortgage disclosure. I am all for educating the consumer...
Friday, April 4, 2008
SMUD to Partner with Developer to Build Solar-Powered Homes...
I received this news release from SMUD (Sacramento Municipal Utilities District for any out-of-town readers)...they have partnered with Woodside Homes and plan to build almost 1500 solar-powered homes near the Rancho Cordova area. It is anticipated that these homes will be complete around the year 2012. This apparently is the largest agreement between any utility company and homebuilder to date in the United States. To read their press release, click here.
Tuesday, April 1, 2008
More than just selling real estate...
I recently have gotten involved with the Sacramento Association of Realtors' "Young Professionals Council." Pretty cool organization. There are some sharp, young Realtors and affiliates out there that I have gotten the opportunity to meet via the YPC. FYI, SAR defines "young" as under 40, and affiliates are non-Realtor members, like someone who works for a Title Company. Recently, several of us took time out to volunteer at Loaves & Fishes. We are also going to attempt to raise money for the Mustard Seed school by doing some fundraising events this year. Good stuff.
Friday, March 28, 2008
MLS Conversion...
Well I have not been spending much time blogging lately. MLS did a big data migration and added new search criteria. The net result is better search capability and more information...and also, I have to re-create EVERY saved search I ever created. I have 980 of them that I have refined over a few years. It has been quite time consuming. Boo!!!
Thursday, March 20, 2008
Ask Erin: The Comeback of FHA Programs
If you talk to most loan officers who have been in the business for a while, they will tell you that aggressive conventional loan programs have been far more popular over the last decade than FHA loans.
Given what is going on in the real estate market, and the death of the majority of the aggressive loan programs - FHA is making a comeback. Not only is it making a comeback, but the program has evolved over the last several years...
For those of you not familiar with FHA's requirements...allow me to dispell a few myths. Basically anyone can qualify for an FHA loan, provided that one of the borrowers will be occupying the subject property as a primary residence. There are no income restrictions or limitations! The minimum downpayment for FHA is roughly 3% - and that 3% can be paid by the borrower, gifted from a family member, or paid by the seller via a 3rd party downpayment assistance program. There can be a total of 6% contributed from the seller for downpayment assistance, closing costs, or a combination of both. There can be a non-occupant "co-borrower", meaning for example, that a parent can basically co-sign for a child. There is NO minimum credit score requirement!...You can have a discharged bankruptcy or past foreclosure and still qualify under many circumstances. Keep in mind that even with no minimum credit score, it is still ideal that the borrower have few current delinquent accounts.
FHA can also be coupled with other programs - for example the Streamline K (you can borrow up to $35k additional for a qualifying property for non-structural repairs...great for bank owned property) or the Energy Efficient Mortgage (you can borrow up to $8k additional to make the house more energy efficient - dual pane windows, HVAC, etc.).
The kicker...the new FHA loan limits in Sacramento, Placer, El Dorado, and Yolo Counties are $580k for a single family home, and up to $1.1M for a fourplex!!!
I just had a buyer client close an FHA purchase. They leveraged a downpayment assistance program, and received a 6% contribution from the seller/Nehemiah for their downpayment (3%) and closing costs (3%). They got a 6% interest rate 30-year fixed loan, and came out of pocket on their purchase around $900.00.
I just had a seller client sell their home to an FHA borrower who had a non-occupant parent co-signer. The seller (my clients), contributed 3% for closing costs, and the buyer's parents gifted 3% down and co-signed the loan.
These loan limit increases are in effect ONLY UNTIL THE END OF 2008....normal FHA loan limits for a single family home are $362,790.
http://www.hud.gov/local/index.cfm?state=ca
http://www.erinattardi.com/financing.htm
http://www.erinattardi.com/calculators.php
Given what is going on in the real estate market, and the death of the majority of the aggressive loan programs - FHA is making a comeback. Not only is it making a comeback, but the program has evolved over the last several years...
For those of you not familiar with FHA's requirements...allow me to dispell a few myths. Basically anyone can qualify for an FHA loan, provided that one of the borrowers will be occupying the subject property as a primary residence. There are no income restrictions or limitations! The minimum downpayment for FHA is roughly 3% - and that 3% can be paid by the borrower, gifted from a family member, or paid by the seller via a 3rd party downpayment assistance program. There can be a total of 6% contributed from the seller for downpayment assistance, closing costs, or a combination of both. There can be a non-occupant "co-borrower", meaning for example, that a parent can basically co-sign for a child. There is NO minimum credit score requirement!...You can have a discharged bankruptcy or past foreclosure and still qualify under many circumstances. Keep in mind that even with no minimum credit score, it is still ideal that the borrower have few current delinquent accounts.
FHA can also be coupled with other programs - for example the Streamline K (you can borrow up to $35k additional for a qualifying property for non-structural repairs...great for bank owned property) or the Energy Efficient Mortgage (you can borrow up to $8k additional to make the house more energy efficient - dual pane windows, HVAC, etc.).
The kicker...the new FHA loan limits in Sacramento, Placer, El Dorado, and Yolo Counties are $580k for a single family home, and up to $1.1M for a fourplex!!!
I just had a buyer client close an FHA purchase. They leveraged a downpayment assistance program, and received a 6% contribution from the seller/Nehemiah for their downpayment (3%) and closing costs (3%). They got a 6% interest rate 30-year fixed loan, and came out of pocket on their purchase around $900.00.
I just had a seller client sell their home to an FHA borrower who had a non-occupant parent co-signer. The seller (my clients), contributed 3% for closing costs, and the buyer's parents gifted 3% down and co-signed the loan.
These loan limit increases are in effect ONLY UNTIL THE END OF 2008....normal FHA loan limits for a single family home are $362,790.
http://www.hud.gov/local/index.cfm?state=ca
http://www.erinattardi.com/financing.htm
http://www.erinattardi.com/calculators.php
Sunday, March 16, 2008
Neighborhood Spotlight: Arden Park
Arden Park is a wonderful Sacramento neighborhood bound by Watt Avenue to the west, Eastern Avenue to the east, Arden Way to the North, and Fair Oaks Blvd to the south.
A quick commute to downtown Sacramento, Arden Park is a highly sought neighborhood known for its close proximity to award-winning public schools, tree-lined streets, long-term residents, large lots, and well, its parks. The majority of the homes there were constructed in the 1950's era.
Nearby schools include Mariemont Elementary School, Arden Middle School, and Rio Americano High School.
There are two parks in the community - La Sierra Park (located in the middle of the neighborhood on La Sierra Drive), and Cresta Park (at the center of three streets - Las Cruces Drive, Esperanza Drive, and Cresta Way). La Sierra Park is home to the Arden Park Parks and Recreation Facility.
Arden Park is home to many community events, such as Easter Egg hunts, Soccer, 4th of July parades, Concerts in the Park, and more. Their neighborhood association is very committed to preserving the atmosphere of the neighborhood, and have formed many groups to promote community interests, such as the Arden Park Tree Foundation, Arden Park Neighborhood Preservation Area, Arden Park Homeowner's Association, etc.
Real estate prices in the neighborhood generally range from $400,000 on the low end to upward of $2,000,000.
A quick commute to downtown Sacramento, Arden Park is a highly sought neighborhood known for its close proximity to award-winning public schools, tree-lined streets, long-term residents, large lots, and well, its parks. The majority of the homes there were constructed in the 1950's era.
Nearby schools include Mariemont Elementary School, Arden Middle School, and Rio Americano High School.
There are two parks in the community - La Sierra Park (located in the middle of the neighborhood on La Sierra Drive), and Cresta Park (at the center of three streets - Las Cruces Drive, Esperanza Drive, and Cresta Way). La Sierra Park is home to the Arden Park Parks and Recreation Facility.
Arden Park is home to many community events, such as Easter Egg hunts, Soccer, 4th of July parades, Concerts in the Park, and more. Their neighborhood association is very committed to preserving the atmosphere of the neighborhood, and have formed many groups to promote community interests, such as the Arden Park Tree Foundation, Arden Park Neighborhood Preservation Area, Arden Park Homeowner's Association, etc.
Real estate prices in the neighborhood generally range from $400,000 on the low end to upward of $2,000,000.
Thursday, March 13, 2008
February Pending Sales UP 37%!
The numbers for February just came out, and as I suspected - pending sales are up...and not just a slight jump. They are up about 37%! In addition, the average home selling price rose from $277k to $281k in Sacramento County.
Some other interesting tidbits of information...bank owned property pending sales represented 1,003 of the 1,681 transactions in March! The average amount of listing inventory based on pending sales in March in Sacramento County was 5.3 months. The average amount of Bank-owned listing inventory based on pending sales for March in Sacramento County is 2.5 months.
Don't misinterpret my message...I still think we are in a heavily lopsided buyer's market in most parts of Sacramento County. I will be curious to see if this increase in activity continues in March. My sense is that it will - if my own personal activity is any reflection of the rest of the market's activity. I suppose we will see next month when the March numbers are released. If anyone is interested in viewing more charts for specific areas, please let me know and I am happy to email them to you.
Source: Trendgraphix & Metrolist MLS
Wednesday, March 12, 2008
REO Property FAQ
I got such an overwhelming response to my posting regarding Short Sales, I thought I would follow that up with REO (aka Bank Owned or Foreclosure) FAQ's.
Purchasing REO (aka, bank owned or foreclosure property) property is a unique experience, unlike more traditional real estate transactions where the buyer is purchasing from a new construction builder or an individual seller. Because there are so many REO listings in the greater Sacramento area, often I am asked what a buyer can expect in these types of transactions, and the only thing for certain is you should "expect the unexpected." I have done several of these transactions, and each one has been a totally different experience. I have assembled some of my experiences for your benefit:
1) Many REO's are listed with local real estate agents if they do not sell on the date of the Trustee sale on the courthouse steps. These agents generally will have anywhere from 10 - 150 listings at any point in time. Often times they will employ a team of other agents and assistants to field inquiries and will be very difficult to get in touch with directly.
2) Expect the bank to require a 1% deposit with your offer. While any regular transaction requires a deposit of some kind with your offer to open escrow, banks will require 1%. If you offer a $1,000 deposit on a $250k property, the bank will likely counter that your deposit needs to be $2,500.00.
3) Expect to remove your contingencies with 5-7 days. This is really fast! Most regular transactions have a 17-day timeline for contingency removal...within this time period you will conduct your inspections, appraisal, move toward obtaining your financing etc. Banks ask for a very short investigation period.
4) Expect that there will be no disclosures from the bank with regard to the condition of the property. Obviously the bank has never lived at the property in question, and it is very likely that a bank representative has never visited the property.
5) Expect to take the property "as-is." I have in the past negotiated some major repairs - for example if the electrical panel has been vandalized, it can be negotiated that the bank fix something like. However, minor repairs - for example fixing a leaky faucet - will not be completed by the bank.
6) Expect that the bank will not provide you with any reports. You will be responsible for obtaining things like a pest inspection, roof inspection, home inspection, etc. Very seldom are these provided.
7) Expect that the title and escrow company will be out of town. My experience is that the company will be out of southern California. The escrow folks will have something like 100 escrows going on simultaneously, and you won't get great service or fast response from them.
8) The bank may require that you be pre-qualified for your loan through them. I see this a lot with Wells Fargo and Countrywide REO's where you are required to submit a pre-qualification letter from one of their own reps in order for your offer to be considered. You are not required to actually use them for your loan though.
9) Counter offers from the bank will be delivered verbally. Yep, verbally. Once a verbal agreement has been reached, the bank will generate its own "Addendum" that over-rides your purchase agreement. Read through it carefully.
10) Your fully executed written purchase agreement will arrive 7-10 days after verbal acceptance. Yikes! This can pose issues for your lender, as most of the time they need an executed contract to start your loan process.
11) The bank will charge you a daily penalty fee if you close escrow late. I have seen this be anywhere from $100/day to $400/day.
Purchasing REO (aka, bank owned or foreclosure property) property is a unique experience, unlike more traditional real estate transactions where the buyer is purchasing from a new construction builder or an individual seller. Because there are so many REO listings in the greater Sacramento area, often I am asked what a buyer can expect in these types of transactions, and the only thing for certain is you should "expect the unexpected." I have done several of these transactions, and each one has been a totally different experience. I have assembled some of my experiences for your benefit:
1) Many REO's are listed with local real estate agents if they do not sell on the date of the Trustee sale on the courthouse steps. These agents generally will have anywhere from 10 - 150 listings at any point in time. Often times they will employ a team of other agents and assistants to field inquiries and will be very difficult to get in touch with directly.
2) Expect the bank to require a 1% deposit with your offer. While any regular transaction requires a deposit of some kind with your offer to open escrow, banks will require 1%. If you offer a $1,000 deposit on a $250k property, the bank will likely counter that your deposit needs to be $2,500.00.
3) Expect to remove your contingencies with 5-7 days. This is really fast! Most regular transactions have a 17-day timeline for contingency removal...within this time period you will conduct your inspections, appraisal, move toward obtaining your financing etc. Banks ask for a very short investigation period.
4) Expect that there will be no disclosures from the bank with regard to the condition of the property. Obviously the bank has never lived at the property in question, and it is very likely that a bank representative has never visited the property.
5) Expect to take the property "as-is." I have in the past negotiated some major repairs - for example if the electrical panel has been vandalized, it can be negotiated that the bank fix something like. However, minor repairs - for example fixing a leaky faucet - will not be completed by the bank.
6) Expect that the bank will not provide you with any reports. You will be responsible for obtaining things like a pest inspection, roof inspection, home inspection, etc. Very seldom are these provided.
7) Expect that the title and escrow company will be out of town. My experience is that the company will be out of southern California. The escrow folks will have something like 100 escrows going on simultaneously, and you won't get great service or fast response from them.
8) The bank may require that you be pre-qualified for your loan through them. I see this a lot with Wells Fargo and Countrywide REO's where you are required to submit a pre-qualification letter from one of their own reps in order for your offer to be considered. You are not required to actually use them for your loan though.
9) Counter offers from the bank will be delivered verbally. Yep, verbally. Once a verbal agreement has been reached, the bank will generate its own "Addendum" that over-rides your purchase agreement. Read through it carefully.
10) Your fully executed written purchase agreement will arrive 7-10 days after verbal acceptance. Yikes! This can pose issues for your lender, as most of the time they need an executed contract to start your loan process.
11) The bank will charge you a daily penalty fee if you close escrow late. I have seen this be anywhere from $100/day to $400/day.
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