Editorial Comment: Should a solid Home loan payment record give you leeway if economic reversals HIT?

Sonoma County homeowner loses job, has made 10 years of on-time payments–does the bank OWE them a modification? Moratorium on payments until employment picks up? Is this Naiveté’ on the borrower’s part? 

   Here’s the deal, you sign an agreement, make the payments on time, and the bank LOANS you the money to BUY your Home.  The bank charges you an interest rate BOTH parties agree to as set forth in the  terms of the note.  The bank gives you 30 YEARS to pay them back. The bank THEN gives the money to the Seller and the bank secures THEIR LOAN on your new home.

   If you don’t wish to use a bank; save up the money and pay cash. OR borrow the money from Mom and Dad, Aunt Harriet, your Best Bud. Perhaps they will be more understanding when you state you can’t make the payments any longer. YOU will be able to negotiate with them the interest  RATE and  TERMS. However, don’t think they’ll carry for 3.75% (going rate for FHA loan today) or 30 year payment plan!

  Perhaps we need a better “NOTE” for borrowers in the future. We can insert a new clause into all future promissory notes, stating if economic conditions make it not possible to make a full monthly payment borrower will have…weeks,days,months, to pay less? NONE? Whatever you feel is valid. Good luck getting that one passed.

  A hybrid would be a local regional bank with a soul, a love of the customer, to monitor “in-danger” loans and reach out to the distressed homeowner to see if a payment plan can be restructured. In our area we have banks operating like this today. You pays your money and takes your choice.

  However, WHAT if a borrower has realized tax benefits for the payment of Interest, Property Taxes? Appreciation? Refinanced and pulled out a ton of cash? Should the borrower THEN be required to repay this amount!  What’s good for the Goose is good for the Gander?

  We have clients who strip themselves bare to keep making a house payment they cannot afford on a property “underwater” by $50,000,$100,000, $200,000. Why? They wish to honor their debt. I explain it this way. You made a deal with the bank. You signed a promissory note to pay–if you cannot make that payment they have the option to FORECLOSURE and take the home for the amount you owe. Simple deal. NOT making your house payment is NOT a moral discussion. Failure to do so results in foreclosure—hardly a spiritual or an IMMORAL moment.

Sonoma County, California “New Contracts” bode well for the “Regular Buyer AND Seller”!

Sonoma County, California “under contract” sales tipping towards “regular sellers” and NOT the “distressed Marketplace”–could bode well for “move-up” market as regular sellers see value and low interest rates as a reason to make a move. See Chart below–I’ll explain this!

 

Regular Buyers are MAKING a comeback! Bodes well for MOVE up market

 

The above chart shows sales going back three years and is broken down into “Quarters” of the year. This report breaks out the Non-Bank portion of the marketplace or what Realtors call “Elective or Regular” sellers–those who DO NOT have a gun to their head (short-seller) or who own a property through the foreclosure process (bank owned or REO).  If you go back to 2008 you can easily see how the “Distressed” market dominated sales (Q4,Q1 2008-2009).  Now look at the last two quarters of 2011. One can easily see how the “regular” buyer market has rebounded. This can indicate a number of things; the distressed properties are NO longer dominating the listing landscape, “Regular” buyers are finding great value in the normal marketplace, consumer confidence is rising as “regular” buyers are once again on the move, interest rates are just TOO darn good! (3.75% FHA!).

  Why is this a good thing? The Mid-range marketplace ($400,000 to $750,000) has been suffering as the dominate “Sellers” where “Distressed” meaning they were NOT buying anything when they sold. REO’s or the banks are NOT buying in the marketplace after seller and neither are those selling their homes “Short”.  This surge in the “under-contract” marketplace of regular buyers indicates perhaps a move to this “mid-range” marketplace. We will need to watch this category to determine what price point is inherent in these numbers. But this portends of good things to come!  

 

 

 

The Real Estate Hour..Rockin’ Around the Christmas Tree, and wishing you a Merry Christmas..Happy Holiday…And, Prosperous New Year!

 

Click this link for the full and fun “jibjab”video;
http://sendables.jibjab.com/view/IIGhZnFtpB1Nn2Dj?cmpid=jj_fb_self_holidays
What a bunch of Hams!
Rockin’ Around the Real Estate Hour with Mike Kelly, Allison Norman and show engineer(and KSRO sports guy), Joe Pasquini. Merry Christmas everyone!! Our Christmas and new year shows are pre-recorded..But still lot’s of fun. Tune in 9-10AM Sundays www.KSRO.com, or locally at 1350AM


Sonoma County, California Radio Show December 18th Show Re-cap–Last show before Xmas! Much to do before years end!

We have our monthly BIG OPEN HOUSE EXTRAVAGANZA with scores of homes open Sunday 1 to 4pm! Much to choose from in Sonoma County. New Years resolution–BUY a Home in 2012!!

Monday, December 19, 2011 is our  Keller Williams Christmas Potluck at OUR NEW east office at 3562 Round Barn Circle, Suite 200, Santa Rosa. Please bring a dish to share and arrive by 11:30 a.m. Realtors seeking a change or move to a progressive, education and agent centered office please come on by!!

  KWLuxuryHomes.com is a place for those seeking the very best in estates and upscale housing. Allison and I have been admitted to this Divison of Keller Williams Realty due to our selling of Luxury Homes here in Sonoma County. This is ONE of the homes we are featuring in the Luxury class. CLICK HERE to go to the KW Luxury Homes site and view this stunning estate on Frie Road in Sebastopol, Ca.

Plus More;

6 credit report Items that scare lenders….Realtor and Affiliate of the year…..remembering  a fellow Realtor…honoring another.  Tune in for all your LOCAL real estate information.

“Bulk” Sale of Short-Sales could aid Blighted communites with rampant Foreclosures!

Here in Sonoma County, the “Wine” Country, our real estate market absorbs “Bank Foreclosure homes” at a pretty quick rate. We could use more as they are Buyer favorites as they are no-nonsense, close in a ready manner and present a good value. However other more urban areas in harder hit areas (Detroit, Pennsylvania, Florida, Las Vegas, etc)  the amount of foreclosed or “Seized”  homes cannot find the buyers and hence are sitting vacant;  prone to vandalism, and illegal occupancy. The  idea  set out below in the article would encourage  lenders to grant short-sales in a geographical area and then “Bulk sell” them to non-profits to be fixed up, make into rentals or aid various non-profits in providing housing to needy families! Here’s the full article below from DSN.com news: Continue reading “Bulk” Sale of Short-Sales could aid Blighted communites with rampant Foreclosures!

Selling your home this spring?? Start planning now.

Get the House Ready
A house that “sparkles” on the surface will sell faster than its shabby neighbor, even though both are structurally well-maintained.

From experience, REALTORS® also know that a “well-polished” house appeals to more buyers and will sell faster and for a higher price. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is maintained, what they can’t see has probably also been maintained. In readying your house for sale, consider:

  • how much should you spend
  • exterior and curb appeal
  • preparing the interior

How much should you spend
In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren’t likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive “polishes” and “touch-ups” to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen. Your REALTOR®, who is familiar with buyers’ expectations in your neighborhood, can advise you specifically on what improvements need to be made. Don’t hesitate to ask for advice.

Maximizing exterior and curb appeal
Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal. Tips to enhance your home’s exterior and curb appeal: Continue reading Selling your home this spring?? Start planning now.

“This Month in Real Estate” New Monthly National Real Estate Video added to the blog!

 

You know how strongly we stress the importance of looking “local’ for real estate information, But we’ve now added a new national update of the Month in Real Estate because we feel it’s important to know how the nation as a whole is doing. The state of Real estate, in general,  is a good indicator of the health of the nation.

 

So, look to the left,  for our new “This Month in Real Estate” video.  We will update in the first week of each month.  And, as usual, we will continue to give you current, LOCAL real estate numbers the first week AFTER the end of each month.

And, tune in weekly to The Real Estate Hour 1350AM KSRO, or www.KSRO.com 9-10AM Sundays for your national AND local real estate information!

 

Why do you need an Energy Audit?? Well, for one thing, it’s free!

Last week’s guest John Sutter at Applied Building Science sent us this video  that will explain the process.  Visit www.energyupgradeca.org for information on how you can get an energy audit for free.

Frequently Asked Questions About
Energy Upgrade California
Energy Upgrade California ―EUC‖ is an exciting new voluntary statewide program that can help you save money on home energy efficiency upgrade projects. These projects can potentially lower your utility bills, increase your home’s energy and water efficiency, and create a more comfortable home.
Following are responses to common questions about the Energy Upgrade program. If you have more
questions, we here at ABS would be more than happy to answer them.
WHAT IS THE PURPOSE OF ENERGY UPGRADE CALIFORNIA?
Key goals include: Continue reading Why do you need an Energy Audit?? Well, for one thing, it’s free!