MagnumOne Realty - Keep it Real in Sacramento

Saturday and still talking short sales

This has been another busy week of dealing with short sales and lender negotiators so I am using Saturday to catch up a bit on my blogging.  I just published my weekly column over at Rocklin & Roseville Today, “Getting Short Sales Done in Sacramento.”  Check it out if you want to get a small taste of what it takes to negotiate a successful short sale. 

We are continuing to be busy at MagnumOne Realty and are dealing with a nice group of buyer and seller clients.  The market for homes priced under $300,000 is very active.  Homes in that price range which show well are very hard to get into contract if you are representing the buyer.  More often than not, they are getting multiple offers and being sold over the asking price.  One of our agents who was showing homes priced around $200,000 has made seven offers over the past month for the same buyer and is still looking.    Buyers in the higher price ranges appear to be much more price sensitive.  They won’t even look until they believe the asking price is a bargain but when the price is lowered to “bargain level” then they have to deal with other buyers and multiple offer situations.  Hint to buyers (particularly on short sale listings):  go look at homes that interest you regardless of the asking price.  If you like it make an offer of what you are willing to pay.  You may be surprised to get it accepted.

If you have any questions or just want to talk about short sales, buying or selling, call me at (916) 290-9339 or send me an email to juliej@jalone.com. 

The picture in this post is one of several Michael took on Father’s Day when we discovered a field of sunflowers in Sacramento.  If you want to see more click, Sunflowers on Father’s Day.

The Ugly Side of Short Sales

I have recently been writing about the benefits of short sales in my weekly column at Rocklin & Roseville Today which is also carried over at Sacramento Today.  The column today was, “Sacramento Short Sales – Good for All.”  I really do believe short sales are win-win transactions where more than just the homeowner and lender benefit but there is an ugly side of short sales too.

Our team at MagnumOne Realty has been successfully completing short sales for the past three years.  We have worked with almost every lender, we know what we are doing, have a strong process and we believe have a great reputation for getting them done.  When you read my column today and I explain the benefits to the lender in accepting a short sale you would have to believe that our job as Realtors in working with lenders would be easy.  That is so wrong!

Dealing with the lenders can be a nightmare and we treated as the enemy by most.  The employees we deal with at the lenders for the most part treat us as if we are stealing money  from them and should not be trusted. 

I do understand that lenders are only as good as their employees and with the growth of short sales they have not been able to keep up and many of their employees are swamped with work.  We were recently told that when Bank of America took over Countrywide they increased the file load on the short sale negotiators by more than 100 percent.  Each negotiator now must follow 350 files.   It doesn’t take a rocket scientist to figure out not much time can be given to a request.

Our experience with BofA/Countrywide is horrible.  They misplace faxed information; they make you wait on hold when you call to get updates, of which they generally don’t have.  They tell you not to call back until some date in the future that is beyond the trustee sale date and the thing that frustrates me the most is the inconsistent messages.  We called to get an update on Monday and were told by the CSR that there were no new notes from the negotiator for the past 30-days so we could escalate the file to get attention.  Naturally we agreed and were told to call back on Tuesday afternoon because it would take 24 hours to get a status update placed in the file notes.  On Tuesday afternoon we called to get the update but were told escalations can take up to 48 hours and to call back tomorrow.  On Wednesday, believe it or not, there was no update and we were told escalations can take up to five days so call back next Monday.  Clearly their process is broken, there appears to be no effort to improve and it is almost impossible to find anyone who seems to care.

Some are better and a few even worse than BofA/Countrywide but the bottom line is most lenders have not figured out the cost/benefit of short sales and lose money every day by not adding staff and resources to their short sale departments.  It makes our job of helping them and our client much more difficult. 

If you are a Realtor or someone who deals with lenders on short sales, I’d love to share your stories here.  Send them to me at juliej@jalone.com.  Later this week I’ll write about some of the other lenders worse than BofA and a strange process at Wells Fargo. 

Staging on a Budget

If you or someone you know is selling or going to sell your home, check out my column, “Staging Ideas on a Budget,” over at Rocklin & Roseville Today.  I am tired of showing clients dirty, messy and poor showing homes.  The ones that show well get sold quickly.

I am about ready to unleash a new Countrywide/BofA RANT….it is coming soon!

Short Sales as a Financial Tool

With local schools getting out for the summer this and next week we should see an increase in the already busy Sacramento real estate market.  Unfortunately much of this will be more short sales as more and more homeowners who owe more on their homes than they are worth realize getting out from under the debt and starting over makes sound financial sense.  Homeowners who used 100 percent financing options or refinanced to pull all their equity out a few years ago are beginning to understand that it may be years before their house is worth what they owe.  Add to this a financial hardship such as loss of a job or divorce and you have the perfect ingredients for a short sale and a fresh start. 

If you or someone you know owns a home and owes more than the current value of the property give me a call at 916 290-9339 or drop me an email to juliej@jalone.com.  We may be able to help you.

Over the past month there has been a consistent rumor floating around saying there is a huge number of bank owned properties that have not come to the market but will in June.  Check out my column, “Rumors dampen Sacramento area Real Estate” over at Rocklin & Roseville Today for the details.

Getting Help to Achieve the American Dream

The first-time home buyer tax credit of up to $8,000 can be a significant help during the remainder of 2009 for buyers who have not owned a home in the previous three years.  Check out my column, “First time home buyer’s tax credit,” over at Rocklin & Roseville Today for the details of the program.  I believe this is a good program and will help not only to revitalize our Sacramento real estate market but will help buyers get their first home.

Sacramento Short Sales

We are beginning to see short sale junior lenders flexing their muscle.  A year ago you could count on the junior lender to pretty much roll over and take whatever allowance the senior lender allotted to them for their lien release.  Now, they are holding out for more money and most are asking for the borrower to sign a letter saying they will remain responsible for any shortfall amount. 

Trying to help struggling Sacramento homeowners avoid foreclosure by modification of their mortgage or a short sale is more difficult than it should be.  Every time the government comes up with a program or an incentive the lenders quickly figure out how to get the money without helping the borrower and essentially avoiding the primary objective of the program, which is to help the homeowner. 

We are continuing to do our best to help homeowners avoid foreclosure but it is taking more time, energy and all of our experience to make it work.  If you or someone you know is having trouble making their monthly mortgage have them call us soon if they are behind in their payments.

Worst to best with a flaw

Two years ago when a client told me they wanted me to short sale their home and their lender was Wells Fargo, I would visibly cringe.  Dealing with Wells Fargo in those days was a nightmare.  They didn’t have sufficient staffing to handle the requests, their process was weak and it took so long that when you got the approval the buyer had moved on so you had to start all over and nobody at Wells cared.  Today they are one of the fastest, they make status update calls to you and often you can deal with the negotiator through email. 

There flaw is bizarre.  When they have more than one loan on a property they have not figured out how to let one negotiator manage their interest.  You have to deal with two different departments, each with their own interest so they double the work for themselves and believe it or not the junior lien  holder part of Wells Fargo often kills the deal because they demand more money than the other department is willing to pay for the lien release.  They should be embarrassed!

If you want to read more about short sale negotiations, check out my weekly real estate column, “Getting Short Sales Done,” over at Rocklin and Roseville Today and reprinted at Sacramento Today.

Loan Mods and Good to be Back!

It seems like almost daily I am talking to a homeowner about short sales.  When they are asking me to help them short sale their house to avoid foreclosure I always ask them if they tried getting a loan modification to stay in the house.  The most common answer is that they called their current lender who politely said they were not interested.  Okay, maybe it wasn’t so polite but they at least said call a Realtor and request a short sale.  There are other avenues for help besides the current lender.

If you or someone you know is having trouble making their monthly mortgage payments and wants to keep their home, have them check out my column, “Homeowners, do you need to help?” over at Rocklin & Roseville Today and republished at Sacramento Today.

Other news:  Over the past month my posts to the blog have not been as regular as I would like and although I have been busy it is because I have been focused on some other business issues that have now been successfully resolved and I am, again, committed to posting more frequently.  For those of you who have sent me emails or called me, thank you very much and I appreciate your interest and very happy to know I have some loyal readers.

Kentuckyanna

It is always fun to get away for a few days and even better when you return and appreciate home.  Last week we traveled to Elizabethtown, Kentucky to visit Michael’s son Mark and his family.  I enjoyed spending time with them and seeing Kentucky. 

I heard about the terrible ice storm they had this past winter but until I saw the devastation it caused I didn’t understand the impact.  Kentucky is trees; almost every road is cut through a forest of trees or rolling green hills surrounded by trees.  Almost every one of those trees was damaged.  Now you see broken limbs jutting out in odd directions or piled high on the ground.  The cleanup is going to take a long time and the effects will be seen for many years to come. 

We did do some work on the Bourbon Trail and I enjoyed that but they need to learn from California wineries how to do tastings!  I am not much of a bourbon drinker so was interested in learning what I tasted and why I enjoyed one more than another.  Hard to do when you drive for 30 minutes and get one sip.

The real estate market where I was in Northern Kentucky or “Kentuckyanna” is doing alright.  They didn’t have the huge run-up in the early 2000’s so have not seen the kind of large price declines we have had here in the Sacramento area.  Interestingly, people there seem to take a longer view of real estate and their home values.  They are not as concerned about the value today, because they, on average, live in the same house longer than we do in California. 

More Good News for 1st Time Buyers

Starting tomorrow the California Association of Realtors will start a new program to help first time buyers who are worried about the economy and not being able to make their mortgage payment if they lose their job.

The program, C.A.R. Housing Affordability Fund Mortgage Protection Program is designed to give these new homeowners some peace of mind by providing them with up to $1,500 per month for up to six months in the event of a job loss.  In addition a co-buyer can participate for a reduced benefit of $750 per month for up to six months in the event of a job loss. C.A.R. is spending $1 million on the program and estimates it could benefit as many as 3,000 families in 2009.

To qualify for the program the applicant must:

·         Be a first-time home buyer – someone who has not owned a home in the last three years

·         Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009

·         Use a California REALTOR® in the transaction

·         Purchase the property in California

·         Be a W-2 employee (cannot be self-employed or military personnel)

If you are interested in this program please let me know, I can get you more information and an application.  You can reach me at (916) 290-9339 or by email at juliej@jalone.com.  

By the way, there is no cost to the home buyer to participate in this program.

If I had only known

These are words we never want to hear ourselves saying, especially as it relates to selling your home.  I recently met a former homeowner who now has a very nasty tax issue as a result of not understanding the consequences of debt forgiven by a lender when they completed a short sale.   Unfortunately he was not using an agent who had much experience.  The agent told him about the law passed in 2007 which allows the IRS not to count debt forgiven by a mortgage lender as income.  She did the right thing and told her client to talk to an accountant but she appeared knowledgeable and he confirmed with a friend that this was true so completed the transaction.  This happens every day and if you or someone you know is considering a short sale please read my column, “Important Short Fall Lessons,” over at Rocklin & Roseville Today.  It can also be found at Sacramento Today.

You have to love this spring weather; it makes me want to be outside.  Home buyers are out and as the days get longer we can look at more than one house “after work.”  I have been working with several buyers over the past few weeks and it never ceases to amaze me at how many homes end up with multiple offers in a market where we clearly have too many listings.  Houses that are well maintained show well and when priced right sell quickly.  The days when a buyer could think about making an offer for a week or two are gone!

Sacramento Homeowners Beware!

I have been hearing several different foreclosure rescue scams at work here in the Sacramento area.  The perpetrators of the scam are approaching financially distressed homeowners and promising to help them stay in their homes and avoid foreclosure.  I found and posted some warning signs of “foreclosure scams” to be aware of on the Real Estate News page at my jalone.com website.  In addition there is a list of legitimate organization that are helping homeowners and where you can report anyone who you believe is out to make money at your expense.  Remember, if it sounds too good to be true, it probably is not true.

Although the forecast is for rain tomorrow, today is bright, sunny and warm so get outside and enjoy the early spring weather.  Good-bye winter!

Should you walk away?

If your home is worth less than you owe, the payments are killing you and have a lender who refuses to help what will happen if you walk away?  Walking away is letting the bank foreclose, giving them the keys or avoiding a foreclosure by doing a short sale.  If you do one of these things how bad will it be for you?  Will you get sued by your bank?  Will you ever be able to get credit again?  How much will Uncle Sam and the IRS want from you?  It may not be as bad as you imagine.  Check out my weekly column, “What are the consequences of walking away?” over at Rocklin & Roseville Today and find out.

Other Items:  Happy St. Patrick’s Day!  I hope you have the luck of the Irish today and all year long!

I have been reading reports about a new California bill that may require banks to wait longer before foreclosing on mortgage obligations.  Last year it was taking some banks up to 9 months before they even started the foreclosure process.  Today they are responding much faster to delinquent loans so this bill may be helpful to Sacramento homeowners who want to qualify for a loan modification, refinance program or who want to avoid foreclosure by doing a short sale.  Check back in the next day or so and I will provide more information.

Just a bit angry today!

This morning I read an article in the Sacramento Bee about the former executives of Countrywide that got rich on bonuses and golden parachutes after they made tons of questionable loans which we are all now paying for.  Believe it or not they have taken their wealth and created a company that buys up bad loans from failed banks.  They are paying pennies on dollar for these loans and making a killing on collecting.  The economy is in the tank, the everyday guy is suffering and these guys are making millions again!

Why do I feel that when this is all said and done the people that will have prospered are the ones who helped create the problem and the borrowers who made risky and poor financial decisions to buy homes they couldn’t afford? Those of us that bought homes we could afford and are making our monthly payments, even when our income has declined and other costs have skyrocketed, will maybe just be lucky get through this recession.

Today, another Washington scheme was announced called the “Making Homes Affordable” initiative.  I am not saying the housing market and homeowners shouldn’t get help but there are now so many plans and programs it is confusing and most of my clients, who we help avoid foreclosure, say when they call their lenders and ask about these Government sponsored plans the answer is generally something about we don’t care what you read, send us money or we will foreclose. 

There seems to be a breakdown in the communication between Washington and the lenders.  Why when we are giving banks billions don’t we get commitments to follow the program?  You don’t need to be a rocket scientist to understand “make loans and help borrowers.” 

If you want a bit more detail on the latest plan to help you keep your house, check out my column, “Dizzy in Sacramento” over at Rocklin & Roseville Today.

Sacramento Real Estate Picking-up Steam

I have been watching and experiencing a steady increase in real estate activity around the Sacramento area.  We have a number of new listings, several of which are on fire.  Yesterday I listed a great home in a downtown Sacramento neighborhood, 1324 35^th Street.  The agent “hits” on MLS has been very high and the phone has been ringing non-stop.  It is an unfortunate Sacramento short sale but will make a new buyer very happy. 

The other property that is hot is another short sale but this one is in Newcastle on over 4 acres.  We had an accepted offer which is being reviewed by the seller’s lender but they had to back out because they could not obtain financing.  We put it back on the market yesterday and can’t keep up with the requests for more information.

Although the Sacramento listing on 35^th Street and the home and acreage in Newcastle are so different they have two striking similarities.  First they are priced aggressively and as important they are both beautifully maintained homes with loads of curb appeal, charm and are both move-in ready.  No matter what you hear about the market and the economy, price a great house right and they will come!