The Market Shift is Finally Here

Kay Wilson-Bolton

Century 21 Hometown Realty

http://www.realestatemagic.com

March 8, 2013

Looking back at May of 2005 when the real estate market peaked, it’s amazing that eight long years later we are actually experiencing a modified frenzy of home buying. If this is any measure of a renewing economy, we can all celebrate.

There is a high level of energy circulating in the county’s home buying circles. Some of it feels good, but some of it is uncomfortably familiar. There are reports about the large number of offers on properties, mostly in the “affordable” price ranges. A $179,000 condo in Moorpark was on the market for 48 hours and had 11 offers; one home in Camarillo in the $400,000 range had 26 offers in 72 hours.

Buyers are offering over asking price. They are removing the appraisal contingency and producing evidence they can pay the difference in cash if the appraisal falls short of the sale price. Many buyers, however, are winning with cash offers.  There are rumors that a buyer’s chances of success in competing are enhanced if they work only with the listing agent. This just can’t be.

Some very good things are very different from 2005.  Lenders can no longer talk to the appraisers which eliminates the possibility of collusion in fixing prices. We all remember the days when it took a team of criminals to deceive borrowers.  However, stories of fraud of all kinds are still unfolding within the offices of the District Attorney and numerous arrests and indictments are still in the wings.

Unlike the last upswing, appraisers are slow to move prices up from the last sale, but this will change as overall closing prices begin to rise. Underwriters grind away at the details and often delay closings by asking for additional documentation. Incredibly complex laws were passed that affected all aspects of homeownership, from borrowing guidelines to appraisal and title company admonitions, tax relief accommodations and a host of safeguards to protect the consumer.

In today’s environment, most homeowners who choose to shortsale are simply making a business decision, unlike the choices made in the early days of shortsales when shame was a common emotion.

Whoever thought a lender would send you an overnight package offering to reduce the interest rate on your home loan even though your current rate is under 5%? There are still mysteries around the shortsale process where some banks are offering as much as $25,000 in relocation funds to borrowers who choose to shortsale and move rather than suffer foreclosure. The majority of offers are generally around $3000 to $7000 but it seems odd they offer anything.

Shortsales are considered “contingent sales” and show as “active” in the Multiple Listing Services even though sellers seldom accept a back-up offer or want to continue showing their property. It is rare when a seller will accept a higher back-up offer and actually submit it to the lender for consideration.  The expectation from the lender is that the seller negotiated the best offer in good faith.

Prequalification letters are harder to come by and are no longer provided after a brief phone conversation. Lenders are required to review tax returns, paystubs, W2s, work history and credit reports. If the letter is not well written, sellers are shy about accepting the offer.

There is a whole new lingo in the industry that runs in tandem with the changes in technology.  Standard practices are home inspections, home protection plans and electronic signing.

Other good news is that consumers who suffered through a foreclosure in 2005 and 2006 should be able to buy again and families who completed a shortsale more than two years ago can jump back into the pool. The REO inventory we thought was being guarded by asset managers as they watched prices rise has diminished with the move of the banking industry to cooperate and facilitate shortsales. Homes are left in better condition and there are elements of honorable exit, particularly when homeowners can honestly say, “We sold our home at market value.”

There is some certainty that most of us are wiser and more thoughtful about the value of money. There have been cruel but valuable lessons on the wisdom of living within our means and having a reserve account. If the lessons of the past give us a brighter more predictable future, they have great value. Now, if we will just teach them to our children!

 

These are the opinions and experiences of Kay Wilson-Bolton,  a real estate  broker in Ventura County Since 1976.

 

 

 

 

A Good Contingent Offer Can Work

By Kay Wilson-Bolton

September 5, 2013 – sent 10.25.13

“News sources report the real estate market is improving, interest rates are steady and affordable, prices are up and inventory is low. Until that changes, it’s all true.”

From a seller’s point of view, contingent sale offers are risky. What if the buyers’ home doesn’t sell? Will the buyers list their home too high? Is their home in good condition and ready to go on the market? Many sellers would rather wait for their own home to sell to a non-contingent buyer than face the uncertainty of a contingent sale offer.

Buyers who can buy another home only if their current home is sold need to convince sellers that it’s worth the risk to accept their contingent sale offer. One strategy that can work in your favor is to list your home for sale before you present an offer on the home you want to buy.

This lets the sellers know you are serious about selling your home. Some buyers are tentative and won’t list their home until they have an accepted offer on the one they want to buy.

A lot of home-sale transactions are put together with the help of the agents involved who communicate freely with one another. As a buyer who must first sell his current home, your listing agent can help to convince the sellers to accept your offer by arming the agent who’s representing you as a buyer with information that will help sell the deal.

Ask your listing agent to prepare recent sales information of listings in your area similar to yours that sold recently to show that your list price is in line with current market conditions in your area. The sellers will want to know how long on average it’s taking homes like yours to sell. They also may want their listing agent to talk to your listing agent to confirm the information your agent provided.

Your chance of a timely sale will depend on buyer demand for homes like yours and on how many homes like yours are currently for sale in your area. In a low-inventory market where demand is high, your home may sell quickly. If there are a lot of listings in your neighborhood, you will need to be aggressive with your list price by pricing lower than your competition.

HOUSE HUNTING TIP: The sellers will want to know how long it will take for you to put your home on the multiple listing service. They are unlikely to wait a month or so for you to get your home ready for sale. As soon as you have made the decision to buy a new home and sell your current one, you should start preparing it for sale. This will make it possible for you to put your home on the market quickly.

If you find your dream home earlier than you thought you would and your home is not ready to market, enlist your agent’s aid in lining up a crew — handyman, painter, stager, etc. — to assist you with a fast prep-for-sale project. Ask friends and relatives to help with decluttering, donating what you no longer want, and packing up items to go to storage that you want to keep.

Before you make an offer, make sure you can provide the sellers with a letter from your loan agent or mortgage broker that indicates you are creditworthy and have the financial means to close the sale once your current home is sold.

Although it may seem silly, write a sincere letter to the sellers about how much you like or love their home and why you want to buy it. Sellers who have a pride of ownership and an emotional attachment to their home can be swayed in the right direction by a well-crafted letter.

THE CLOSING: Offer to pay the asking price, or more, if the market warrants it. Buyers usually pay a premium for a contingent sale offer.

 

 

 

 

Hot Market Here We Come

March 7, 2013

Looking back at May of 2005 when the real estate market peaked, it’s amazing that eight long years later we are actually experiencing a modified frenzy of home purchases. If this is any measure of a renewing economy, we can all celebrate.

There is a high level of energy circulating in the county’s home buying circles. Some of it feels good, but some of it is uncomfortably familiar. There are reports about the large number of offers on properties, mostly in the “affordable” price ranges. A $179,000 condo in Moorpark was on the market for 48 hours and had 11 offers; one home in Camarillo in the $400,000 range had 26 offers in 72 hours.

Some buyers are offering over asking price and removing the appraisal contingency. They are producing evidence they can pay the difference in cash if the appraisal falls short of the sale price. Many buyers, however, are winning just with cash offers.  There are rumors that a buyer’s chances of success in competing with other buyers are enhanced if they work only with the listing agent. This just can’t be.

Some very good things are very different from 2005.  Lenders can no longer talk to the appraisers to eliminate the possibility of collusion in fixing prices. We all remember the days when it took a team of criminals to deceive borrowers.  However, stories of fraud of all kinds are still unfolding within the offices of the District Attorney and numerous arrests and indictments are still in the wings.

Unlike the last upswing, appraisers are slow to move prices up from the last sale, but this will change as overall closing prices begin to rise. Underwriters grind away at the details and often delay closings by asking for additional documentation. Incredibly complex laws were passed that affected all aspects of homeownership, from borrowing guidelines to appraisal and title company admonitions, tax relief accommodations and a host of safeguards to protect the consumer.

In today’s environment, most homeowners who choose to shortsale are simply making a business decision to shed a non-producing asset, unlike the choices made in the early days of shortsales when shame was a common emotion.

Whoever thought a lender would send you an overnight package offering to reduce the interest rate on your home loan even though your current rate is under 5%? There are still mysteries around the shortsale process where some banks are offering as much as $25,000 in relocation funds to borrowers who choose to shortsale and move rather than suffer foreclosure. The majority of offers are generally around $3000 to $7000 but it seems odd they offer anything.

Shortsales are considered “contingent sales” and show as “active” in the Multiple Listing Services even though sellers seldom accept a back-up offer or want to continue showing their property. It is rare when a seller will accept a higher back-up offer and actually submit it to the lender for consideration.  The expectation from the lender is that the seller negotiated the best offer in good faith.

Pre-qualification letters are harder to come by and are no longer provided after a brief phone conversation. Lenders are required to review tax returns, paystubs, W2s, work history and credit reports. If the letter is not well written, sellers are shy about accepting the offer.

There is a whole new lingo in the industry that runs in tandem with the changes in technology.  Standard practices are home inspections, home protection plans and electronic signing.

Other good news is that consumers who suffered through a foreclosure in 2005 and 2006 should be able to buy again and families who completed a shortsale more than two years ago can jump back into the pool. The REO inventory we thought was being guarded by asset managers as they watched prices rise has diminished with the move of the banking industry to cooperate and facilitate shortsales. Homes are left in better condition and there are elements of honorable exit, particularly when homeowners can honestly say, “We sold our home at market value.”

There is some certainty that all of us are wiser and more thoughtful about the value of money. We have witnessed and learned cruel but valuable lessons on the wisdom of living within our means and having a reserve account. If the lessons of the past give us a brighter more predictable future, they have great value. Now, if we will just teach them to our children!

These are the opinions and experiences of Kay Wilson-Bolton who has been a broker in Ventura County Since 1976.

 

 

When It Looks Like No One is Home…

By Kay Wilson-Bolton

September 21, 2013

If a home in your neighborhood looks like no one is home for an extended period of time, do humanity a favor and knock on the door. It is possible someone is behind those closed doors living with unhealthy fears and behaviors.

In more cases that you would think, people are living and dying alone, surrounded by untold collections. Popular television programs have taken the lid off the topic of hoarding but not the mystery. All compulsive behaviors have causes and unpleasant side effects.

In almost a dozen recent properties that have been referred to me for sale, they were occupied by hoarders whose lives were driven by the passion of surrounding themselves with perceived comfort in the form of “things”. Unfortunately this can include pets.

There are five classifications of hoarders according to the National Study on Chronic Disorganization. The specific areas deal with Structure and Zoning, Pets and Rodents, Household Functions, Sanitation and Cleanliness

Hoarding can include excessive attachment to possessions, extreme clutter throughout the home’s living spaces, inability to discard items and the stacking of magazines, newspapers and junk. Hoarders will move items or trash from one pile to another, without ever discarding anything. They will acquire seemingly useless items, including trash. They have organizational difficulty or perfectionism, exhibit difficulty permitting others to touch or move accumulated items;  put off doing what they know needs to be done; have difficulty making decision and managing daily tasks, and have limited or poor socialization skills.

Based on the level of hoarding identified, it may be best to contact the County’s Mental Health Department or in some cases the local police for a “well-being check”. If extreme Level 5 has been reached, it is recommended that clean-up be left to professionals who have the proper safety equipment and anti-bacterial chemicals and licenses.

You can help prevent this sad outcome in your neighborhood by watching for the lonely looking home where lack of yard care is evident; where few visitors are noticed except for regular deliveries from United Parcel of Fed-Ex, trash buildup and general lack of activity.

When the residents of these homes have passed away or moved to safer living situations, a REALTOR® with experience in clearing and cleaning such a home should be called in to assist in rehabilitating the property for resale and utilize appropriate marketing strategies and disclosures.

Kay Wilson-Bolton has been in full-time real estate since 1976.

 

How to write a strong contingency offer

REALTY MATTERS – Published Santa Paula Times

By Kay Wilson-Bolton

September 5, 2013 – sent 10.25.13

“News sources report the real estate market is improving, interest rates are steady and affordable, prices are up and inventory is low. Until that changes, it’s all true.”

From a seller’s point of view, contingent sale offers are risky. What if the buyers’ home doesn’t sell? Will the buyers list their home too high? Is their home in good condition and ready to go on the market? Many sellers would rather wait for their own home to sell to a non-contingent buyer than face the uncertainty of a contingent sale offer.

Buyers who can buy another home only if their current home is sold need to convince sellers that it’s worth the risk to accept their contingent sale offer. One strategy that can work in your favor is to list your home for sale before you present an offer on the home you want to buy.

This lets the sellers know you are serious about selling your home. Some buyers are tentative and won’t list their home until they have an accepted offer on the one they want to buy.

A lot of home-sale transactions are put together with the help of the agents involved who communicate freely with one another. As a buyer who must first sell his current home, your listing agent can help to convince the sellers to accept your offer by arming the agent who’s representing you as a buyer with information that will help sell the deal.

Ask your listing agent to prepare recent sales information of listings in your area similar to yours that sold recently to show that your list price is in line with current market conditions in your area. The sellers will want to know how long on average it’s taking homes like yours to sell. They also may want their listing agent to talk to your listing agent to confirm the information your agent provided.

Your chance of a timely sale will depend on buyer demand for homes like yours and on how many homes like yours are currently for sale in your area. In a low-inventory market where demand is high, your home may sell quickly. If there are a lot of listings in your neighborhood, you will need to be aggressive with your list price by pricing lower than your competition.

HOUSE HUNTING TIP: The sellers will want to know how long it will take for you to put your home on the multiple listing service. They are unlikely to wait a month or so for you to get your home ready for sale. As soon as you have made the decision to buy a new home and sell your current one, you should start preparing it for sale. This will make it possible for you to put your home on the market quickly.

If you find your dream home earlier than you thought you would and your home is not ready to market, enlist your agent’s aid in lining up a crew — handyman, painter, stager, etc. — to assist you with a fast prep-for-sale project. Ask friends and relatives to help with de-cluttering, donating what you no longer want, and packing up items to go to storage that you want to keep.

Before you make an offer, make sure you can provide the sellers with a letter from your loan agent or mortgage broker that indicates you are creditworthy and have the financial means to close the sale once your current home is sold.

Although it may seem silly, write a sincere letter to the sellers about how much you like or love their home and why you want to buy it. Sellers who have a pride of ownership and an emotional attachment to their home can be swayed in the right direction by a well-crafted letter.

THE CLOSING: Offer to pay the asking price, or more, if the market warrants it. Buyers usually pay a premium for a contingent sale offer.

How to Improve Your Offer

September 5, 2013

From a seller’s point of view, contingent sale offers are risky. What if the buyers’ home doesn’t sell? Will the buyers list their home too high? Is their home in good condition and ready to go on the market? Many sellers would rather wait for their own home to sell to a non-contingent buyer than face the uncertainty of a contingent sale offer.

Buyers who can buy another home only if their current home is sold need to convince sellers that it’s worth the risk to accept their contingent sale offer. One strategy that can work in your favor is to list your home for sale before you present an offer on the home you want to buy.

This lets the sellers know you are serious about selling your home. Some buyers are tentative and won’t list their home until they have an accepted offer on the one they want to buy.

A lot of home-sale transactions are put together with the help of the agents involved who communicate freely with one another. As a buyer who must first sell his current home, your listing agent can help to convince the sellers to accept your offer by arming the agent who’s representing you as a buyer with information that will help sell the deal.

Ask your listing agent to prepare recent sales information of listings in your area similar to yours that sold recently to show that your list price is in line with current market conditions in your area. The sellers will want to know how long on average it’s taking homes like yours to sell. They also may want their listing agent to talk to your listing agent to confirm the information your agent provided.

Your chance of a timely sale will depend on buyer demand for homes like yours and on how many homes like yours are currently for sale in your area. In a low-inventory market where demand is high, your home may sell quickly. If there are a lot of listings in your neighborhood, you will need to be aggressive with your list price by pricing lower than your competition.

HOUSE HUNTING TIP: The sellers will want to know how long it will take for you to put your home on the multiple listing service. They are unlikely to wait a month or so for you to get your home ready for sale. As soon as you have made the decision to buy a new home and sell your current one, you should start preparing it for sale. This will make it possible for you to put your home on the market quickly.

If you find your dream home earlier than you thought you would and your home is not ready to market, enlist your agent’s aid in lining up a crew — handyman, painter, stager, etc. — to assist you with a fast prep-for-sale project. Ask friends and relatives to help with de-cluttering, donating what you no longer want, and packing up items to go to storage that you want to keep.

Before you make an offer, make sure you can provide the sellers with a letter from your loan agent or mortgage broker that indicates you are creditworthy and have the financial means to close the sale once your current home is sold.

Although it may seem silly, write a sincere letter to the sellers about how much you like or love their home and why you want to buy it. Sellers who have a pride of ownership and an emotional attachment to their home can be swayed in the right direction by a well-crafted letter.

THE CLOSING: Offer to pay the asking price, or more, if the market warrants it. Buyers usually pay a premium for a contingent sale offer.

From Proverbs Comes Prudence

REALTY MATTERS
September 5, 2013

“News sources report the real estate market is improving, interest rates are steady and affordable, prices are up and inventory is low. Until that changes, it’s all true.”

It’s rare that the topic of real estate doesn’t eventually surface in most conversations. It reveals a common denominator that home ownership is important in America.

Despite having been burned in the recent fires of foreclosure, few people have ever said they never want to own another home. What is new and different is that they want to return with caution, wisdom and prudence.

Prudence is an old-fashioned word and not commonly used. A good brush up is provided in Proverbs 14. It centers on “caution and wisdom.”

Lenders hold the keys to prudence where credit scores are analyzed and paystubs, tax returns and W2’s or 1099’s are examined. Job security is considered a part of the application process, along with longevity and experience.

Gone are the days when a minimum wage worker can be assisted and prompted to “state” his/her income and qualify for any loan for any house.

Looking back, its unimaginable that happened, but sellers reaped profits; lenders cashed in on fees by adding prepayment penalties to loans with early due dates; agents and brokers sold lots of homes. The buyers loved the ride for a while, until it became apparent they were the victims of folly.

New State and Federal safeguards should prevent this catastrophic and criminal event again—until greed creeps in and people find another way to get what they want.

A great lesson in life is to learn we can be happy without everything we think we want. We were designed to be just that!

Pre-Approval process is essential

Don’t be surprised if a real estate agent declines to show you property if you have not initiated the process to “get your loan ready.” Once in a while, a would-be homeowner will claim they don’t want to bother with the preapproval process until the find a home they like.  Those days are now ancient history.

Most agents devote themselves to clients who have done the work of getting ready to buy a home. It means the lender has been told “all” and knows “all.”  They provide a letter of preapproval (far better than a simple prequalification letter) which states all you need to buy a home is the address, an executed purchase agreement and a preliminary title report.

The pre-approval letter is the parachute behind the offer, as well as the safety net, the stamp of approval, and the insurance policy for a good transaction. Much of the bad rashes from the previous real estate market have been cured by proper lending practices, which even includes a separation from the appraiser. This is to insure impartial and unpressured evaluations.

If you want to buy a home and whether it’s your first or fifth, you must have a pre-approval letter. So before you find the home of your dreams, start the process to avoid major disappointment.  None of this is personal against one buyer over another—it’s just good business.

 

 

Hoarder Homes – Identify, Assist and Professional Handling

When It Looks Like No One is Home…If a home in your neighborhood looks like no one is home for an extended period of time, do humanity a favor and knock on the door. It is possible someone is behind those closed doors living with unhealthy fears and behaviors.

In more cases that you would think, people are living and dying alone, surrounded by untold collections. Popular television programs have taken the lid off the topic of hoarding but not the mystery. All compulsive behaviors have causes and unpleasant side effects.

In almost a dozen recent properties that have been referred to me for sale, they were occupied by hoarders whose lives were driven by the passion of surrounding themselves with perceived comfort in the form of “things”. Unfortunately this can include pets.

There are five classifications of hoarders according to the National Study on Chronic Disorganization. The specific areas deal with Structure and Zoning, Pets and Rodents, Household Functions, Sanitation and Cleanliness

Hoarding can include excessive attachment to possessions, extreme clutter throughout the home’s living spaces, inability to discard items and the stacking of magazines, newspapers and junk. Hoarders will move items or trash from one pile to another, without ever discarding anything. They will acquire seemingly useless items, including trash. They have organizational difficulty or perfectionism, exhibit difficulty permitting others to touch or move accumulated items;  put off doing what they know needs to be done; have difficulty making decision and managing daily tasks, and have limited or poor socialization skills. 

Based on the level of hoarding identified, it may be best to contact the County’s Mental Health Department or in some cases the local police for a “well-being check”. If extreme Level 5 has been reached, it is recommended that clean-up be left to professionals who have the proper safety equipment and anti-bacterial chemicals and licenses.

You can help prevent this sad outcome in your neighborhood by watching for the lonely looking home where lack of yard care is evident; where few visitors are noticed except for regular deliveries from United Parcel of Fed-Ex, trash buildup and general lack of activity.

 When the residents of these homes have passed away or moved to safer living situations, a REALTOR® with experience in clearing and cleaning such a home should be called in to assist in rehabilitating the property for resale and utilize appropriate marketing strategies and disclosures.