Saturday, May 23, 2009

California Down Payment Assistance Is Back.....Because We Have So Much Money :)

From the title of my post....I sound ungrateful, but I'm not. I'm thrilled!!! CALHFA is a program which helps first time home buyers of California with a 3% deferred loan to be used for the down payment. When used in combination with the FHA loans.....a first time buyer can now qualify to buy a home with only 1/2 % of the purchase price.

(FHA requires a 3.5% down payment......3% of that can be from the CALHFA program)

The mortgage industry calls this a silent second. This is a lien on the property, but the borrower makes no payments on this loan until they refinance or sell the property. So it just sits "silently." Because the FHA allows closing costs to be paid by the seller....this gives an opportunity to many more first time home buyers.

This is a bond-funded program....and there are several others too. Take a look at the link above for more information.

Thursday, May 21, 2009

And The Bank Held Out For Less Money.....Short Sale Idiocy

Last August....yes, August....I took a listing for a short sale. I had my appraiser give the property the "once over" and priced it competitively at $149,900. I had numerous buyers the first week. One was for $165,000 and all cash. Yippee!!! This was ready to go in November. The bank should be thrilled!

They weren't!

The bank did it's own appraisal and it came in at the $149,000 that we had listed....we had a cash buyer ready to go at $165,000....they should be thrilled!

They weren't!

The bank wanted the seller to "take some responsibility" and take a note for $20,000. The seller said "no." We went back and forth with the bank and eventually got them down to $5000 note. By this time the buyer was gone, and prices had dropped.

I put it back on the market in December and it sat and sat, comps went down and down. We finally found a new buyer in March. For $125,000. By this time the seller had received his notice of default and sale date. He saw no reason to sign a note. He was tired and annoyed. I agreed with him. The buyer did want the home and offered an additional $2000 to the bank in lieu of the seller's note.

They agreed!

The bank "stuck to it's guns" and held out for less!!!!

I hope they are thrilled!

Friday, May 1, 2009

Hello Buyer!!! Why It's OK to "Window Shop"

I call it "window shopping"! In the truest sense of the term, you are in fact shopping for windows...and doors...and floors...and kitchens...Ok, you get the point! In my business plan, I include time to take clients who are not ready/prepared to buy out to see homes and neighborhoods. This is not only first-time buyers....this market can be scary!

I think the industry as a whole now understands that buyers are more educated than ever. They use the Internet to do much of the research. Sure they can get a list of available homes and recent sales....but without the context of seeing these homes, this information is numbers. Drive-bys are helpful as well....but an afternoon spent with a Realtor looking at homes with the background information and comps is an education that can't be gained on the Internet.

I have a database full of these future buyers. I don't use the normal "drip" email system of sending 1 or 2 lisitings as they pop-up. I use a gateway is a sample site:

This site allows the future buyer to capture, sort, save and make notes on listings all in one place. These listings come directly from the MLS so nothing is missed. When you are "window shopping" this is a great way to start watching the market. You will be able to watch prices...are they going down? up? are there more listings that fit your criteria? less? This is great information!!! All in one place!

The Real Estate Market is changing every day...if you aren't ready to jump right now....find a Realtor to help you prepare! Go see a few homes, check out the neighborhoods and do some "window shopping."