Michael Roberts' Blog -San Jose Homes, Real Estate and Houses for Sale

These two Los Gatos homes for sale prove that a listing price is rarely a selling price in our Real Estate market.  We are at a crossroads.   It just isn’t what you might think;

131 Millrich Dr.  this Los Gatos house sold for nearly 1% less than the asking and 411 Clearview Dr., a townhome, sold for nearly 5% over the listing price !

A reminder that ’sweet spotting’ your asking price will always pay off.

The good news….neither property was a short sale.

2 Los Gatos Houses sold this week,

131 MILLRICH DR, Los Gatos 95030 (Los Gatos)Single Family Home 3 bed(s) Baths: 4|1 bath(s)   SqFt: 2,593  Lot: 9,100 sq ft

List Price: $1,449,000     Sold Price $1,332,000.00

______________________________________________________

411 CLEARVIEW DR, Los Gatos 95032 (Los Gatos)Townhouse  3 Beds, 2|1 Baths:  SqFt: 2,122 Lot: 2,220 sq ft

List Price: $749,000 Sale Price: $780,000

Assoc. Fee: $428

We see a crossroads ahead…one where the buyers in the Los Gatos Real Estate Market aren’t in the driver’s seat.    Could this mean the homes for sale are in a Seller’s market?

Remember…

Spring is coming and the end of the $8000 First time buyer’s credit is there waiting.   I wonder if will  lead to more vigorous sales?…bidding?

It looks increasingly obvious the problems for some lenders are going to get a lot worse.

Rismedia reported this weekend…

The Department of Housing and Urban Development (HUD) said it’s taking a closer look at 15 mortgage companies to determine why they had such high rates of problems with FHA insured mortgages.

Can I answer that?  Lending to anyone who could fog a mirror tends to do that.    I told you Fannie Mae was getting a spanking before this new investigation.

“Each loan on this list will be thoroughly examined and we will track down the reasons why it failed. Once we determine the causes, we will look to see whether there is a need for further review or remedial action. We want to send a message to the industry that as the mortgage landscape has shifted, we are watching very carefully and that we are poised to take action against bad performers,” Donohue said.

I wonder if this has anything to do with the fact Fannie Mae is approving foreclosure without notifying banks.

I don’t think Ken Donahue has tried to actually apply for a Home Purchase Read the rest of this entry »

The Home Mortgage Preservation Program is now Turbocharged enough to help high Los Gatos mortgages hopefully.

In May the government stepped up the pace to modify mortgages to stave off the 10–12 million potential foreclosures looming on the horizon.   This was to be done first, by allowing homeowners to qualify for modifications on a temporary basis.  650,000 homeowners are now in that process.

However, only 2000 have been approved for modifications through the program.

Request Loan Modification .PDF

Chase Loan Mod Docs .PDF

GMAC Financial Statement .PDF

“We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones,” said Phyllis Caldwell, the newly appointed chief for the Treasury Department’s upstart Homeownership Preservation Office, in a statement released Monday.

The MakingHomeAffordable.gov Web site will include links to all required documents and an income verification checklist, as well as explanations of how the trial and conversion processes work. The Homeowner’s HOPE Hotline, at (888) 995-HOPE, will provide direct access to housing counselors

The temporary modification idea was meant to allow the homeowner time to submit documentation the lender would review to potentially grant an approval.   This has caused much anxiety on the part of the participants as evidenced in the following quote.

“Now it’s up to the banks to do their part to convert borrowers to permanent modifications,” said Michael Barr, an assistant Treasury secretary. “Servicers to date have not done a good enough job.”

We just don’t know what penalty the participating lender is facing if they do not comply with the pressure.   Without proof of substantial numbers of permanent modifications there is a real sense that this will just be another case of hot air.

This will lead to MORE foreclosures that may well have been prevented if the homeowner had time to seek out alternatives like a short sale or deed in lieu of foreclosure.

“If we don’t see a big increase in the permanent modification numbers, then there’s something seriously wrong with this program,” said Alan White, a law professor at Valparaiso University. “I can only assume the number is appallingly low.”

The Treasury Dept. began to publish reports naming those institutions that were lagging which proved to increase the numbers of temporary modifications from 235000 to 650000 by the end of July.

It is likely there will be another attempt to list their names if the number of permanent modifications does not rise soon!  Not quite Turbocharged.

There are new guidelines, now in place, that servicers are not going to like very much.

This is directly from the HMP press release …

Top servicers will be required to submit a schedule demonstrating their plans to reach a decision on each loan for which they have documentation and to communicate either a modification agreement or denial letter to those borrowers. Treasury/Fannie Mae “account liaisons” are being assigned to these servicers and will follow up daily as necessary to monitor progress against the servicer’s plan. Daily progress will be aggregated by the end of each business day and reported to the Administration.

If you or someone you know needs to get on board, forward this link to them. http://makinghomeaffordable.gov/index.html

Here they will find…

• Links to all of the required documents and an income verification checklist to help borrowers request a modification in four easy steps;
• Comprehensive information about how the trial phase works, what borrower responsibilities are to convert to a permanent modification, and a new instructional video which provides step by step instruction for borrowers;
• A toolkit for partner organizations to directly assist their constituents.

I think this is a mess that still needs cleaning up… and I am hear to watch ‘em.

Image via Wikipedia

5 New HomeOwners and 5 Successful Sellers makes for great news this past week.

220 BERSANO LN, Los Gatos 95030
$1,729,000 Beds: 4 bed(s) Baths: 3|0 bath(s)

17050 Wild WY, Los Gatos 95030
$1,485,000 Beds: 3 bed(s) Baths: 2|0 bath(s)

16345 LOS GATOS BL #49, Los Gatos 95032 (Los Gatos)
$510,000 Beds: 2 bed(s) Baths: 1|1 bath(s)

30800 LOMA CHIQUITA RD, Los Gatos Mtns 95033 (Los Gatos Mtns)
$159,000   Raw Land

14685 OKA RD #11, Los Gatos 95032 (Los Gatos)
$140,000 Beds: 3 bed(s) Baths: 2|0 bath(s) Mobile Home

There are 12 new Los Gatos listings for the week you can see these new listings using comprehensive search tool on my home page.

The fundamental reason homes do not sell in a timely manner is due to misplacing it in the market.   Pricing!  No one is willing to pay more than something is worth… everyone knows that.  Still, I am often befuddled to find so many agents list a home for more than market price?   It’s called ‘buying the listing’.

Buying the listing is when an agent will do anything to stick a sign in your flower bed, including listing at a higher price just to get you to sign on the dotted line.  I call it,  sticking it to you.  That’s exactly what it is when you consider the fact that your home will see little exposure, sit on the market longer and end up selling for less than you expected.  It happens every time!

Elizabeth Weintraub writes “…Maybe the first agent knows there will be two other agents competing for the listing, so the first agent names an astronomical figure. The second agent, upon hearing the first agent’s price, beats it. The third agent comes in higher yet.”

This is all based on the fact you have already implemented the basic tips to sell your home.

Are you thinking “but, if a buyer offers less than we are asking we can’t negotiate”?  If your home is priced right you will have several buyers considering an offer.  This presents a problem for the buyers, a level of uncertainty that you will even consider their low offer.  Hence, the offers that come will be more in line with the market.  Less serious buyers will go fishing elsewhere and not waste your time.

This salesman ‘buy the listing’ tactic only leads to more work than is necessary. I had a similar experience of my own when I recently sold my personal residence.  I don’t use ‘buy the listing’ tactics but, market conditions led to the same result.    The market was falling and I had to lower my price two times to catch a buyer.  It was like chasing the market downhill.  If I had known the banking system was going to experience such failures I would have listed at the eventual selling price from the onset to avoid the trouble.

In reality, the chance a home will sell in the first few weeks is far greater when it is priced correctly and prepared well.  Sounds intuitive enough, Right?   Go look at some homes for sale and see how little thought is given to home preparation.   This is especially important when considering a short sale.   The sooner you can yield a willing buyer the sooner you can move the time consuming process forward.

Showhomes, a national franchised home stager staged Tracy Truitt’s listing and it sold in eight days.   Tracey said…“I had an almost full price offer within a week of Showhomes’ staging, and a 25% higher offer than the two offers that had come in previously to the home being staged,” Truitt says.

I found keeping my house prepared well, clean and neat, was tiresome after just a couple of weeks.  I am a terrible merry maid.  If I had to deal with a Realtor I would have lost my mind!  I know can do better than some..look at what  these people did.

Each time I made a price adjustment more people called and disrupted breakfast, dinner and quiet family time.  It was unnerving more than once.  Buyers  sense  desperation when you drop your price and lower offers will follow.

You can guard against this by simply stepping outside your bubble and looking at the competition in an unbiased fashion.  This means you will have to forget all the trouble and expense you suffered when you updated and improved your home.  A buyer’s eye only sees your home compared to other like properties that are available.  You must do the same. No one cares if Aunt Clara helped you cook your first Turkey there.

Is this boring yet?

Wake up!  Do a Walk Score or a Megans Law search for your home? How about a Crime Report review?   I will bet my favorite tie that buyers considering your home are.  Think like a buyer!

Following your internet searches and open house viewings you can reasonably determine what your home should sell for. This will afford you the knowledge and understanding to say no to –salespeople-.  Half hearted buyers will resist the urge to make low ball offers and serious buyers will make their highest and best offers.

Would you be interested in learning what buyers complain about most?  If so, please comment and I will provide a definitive list and some ideas to overcome them.

Tips on Appraisals

One in Four Homes Lowered Price

Why do agents take over priced listings

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Do you remember that commercial?  Was it a Mr. Goodwrench add?   We now know we payed them then and bailed them out this year!  Payed both times.   Ugh!

Pay now or Pay Later?  That is the question in our mortgage market now…not  Shakespearean,  but profound considering….Should you jump?

Mortgage rates eased for the fourth consecutive week, hitting historic lows well below 5 percent this week, Freddie Mac said in releasing the results of its latest Freddie Mac Reports.

Rates on 30-year fixed-rate mortgages averaged 4.78 percent with an average 0.7 point for the week ending Nov. 25, down from 4.83 percent last week and 5.97 percent a year ago.

This is what we have been expecting and will lead to higher rates as the market change cycles.  Not to mention the 1.25T  the Federal Reserve is spending to buy mortgage backed securities from Freddie Mac and Ginnie Mae.

The program is going to continue through March 2010 which makes you wonder…Why are they delaying the inevitable?   The program was supposed to be finished up at the end of this year.   The answer is:  To keep the rates low.   Thank you for that.  What happens when the rates increase?

The Mortgage Bankers Association last month projected that 30-year fixed-rate mortgages will hit 5.4 percent next year, 6 percent in 2011, and 6.3 percent in 2012.   Inflation?

I would suggest buyers take this seriously.  Would you rather pay rate to a mortgage bank or a few thousand hard dollars now?

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How about shopping online..ONLY…online?   Not likely, but Google has a fun new tool that will definitely keep you staring at your Laptop longer.

Where is this going to take Real Estate?

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Great news has just been released by Real Estate information service DataQuick – Prices and sales are up in the  nine Bay Area counites !  Maybe not great news for twitchy buyers though.

Silicon Valley Business Journal reports -”The Bay Area’s housing market continued to ease back toward normalcy in October, as fewer distressed properties sold and $500,000-plus sales accounted for a greater share of transactions than a year ago.”

In Santa Clara County the median price in October was $500,000, up 4.8 percent from $477,000 in October 2008. Sales were up 27.9 percent to 1,944.  It has been like the woman assistant in magic show-disappearing.

In June I asked is this a spike in prices?

In addition to the Bay Area overall, three counties – Santa Clara, Marin and Sonoma – saw their median sale prices rise year-over-year last month. The last time that more than one county posted an annual gain in the median was November 2007. Also last month, Alameda, Santa Clara, San Francisco and the nine-county region overall posted single-digit annual gains in their median price paid for a specific home-type: resale single-family detached houses.

Barbara Corcoran ‘Today” Video “homes around the country”

Ok twitchy buyers… here’s a bone…Prices are still lower than they were in 2005.   Your friends may be unwilling to sell their homes,  since they bought at the sharp peak,  but there is an abundance of others to choose from.

How much longer do you think the housing market could withstand the price ‘depression’ in Silicon Valley?

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Have you noticed?   Most markets are experiencing a price stabilization, however there are price reductions being made even as late as October.    43% of homes listed in 27 major markets saw price reductions of  $24,781 dollars.

From Rismedia:

Other highlights of the brokerage’s monthly survey of price reduction data include:
-Miami-area (Ft. Lauderdale/Palm Beach) homeowners reduced list prices by the largest percentage at 15.7% or $40,000 on average
-Homeowners in Raleigh-Durham reduced prices by the smallest percentage at 4.6% or $11,000 on average
-Of the markets studied, those with the highest percentage of price-reduced homes are Jacksonville (50.9%), Orlando (50.1%) and Chicago (50.1%)
-Markets with the lowest percentage of price-reduced homes are Denver (31.1%), Los Angeles (33.6%), Sacramento (36.4%) and San Diego (35.7%)
-Markets where sellers have cut the most in absolute dollars are: San Diego ($54,000 median price reduction), Orange County, Calif. ($51, 000 median price reduction), San Francisco ($50,500 median price reduction) and Los Angeles ($43,000 median price reduction).
-As in September, Orange County had the highest median list price at $624,900. Jacksonville, Fla. has the lowest median list price at $172,000.

I love this video series…California from 1939

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Buying a short sale is like being a miner…A miner will dig and dig, for months, until they find gold right?  Buying a short sale can be very much like mining for gold.  You need to have a miner’s mindset and use better tools than the others.

“How many months is this going to take?”   This question is being asked with great regularity… too much really.   The answer…It depends on who has the mine.  Period.  If the Listing agent  (who has the mine or short sale) is not proactive then it doesn’t matter how hard your Realtor works or how high your offer is…you won’t find any gold.

Your Realtor is your mining pick.   They need to know how to qualify the listing agent’s knowledge, experience and ability or, at least, be willing to work to help the listing agent make progress with the bank who is ultimately going to approve the short sale and…shine the light on the gold.

A successful gold miner will have a map of the gold mine and know how to navigate it.   Your Realtor of choice will need to have a good map and understand the best way to navigate their way to the gold and extract it.   This map is developed through representing sellers AND buyers of  short sale properties, understanding all the pitfalls  and the best practices to avoid them.

More and more short sales will be coming to the market and,  the best homes and best buys available, will likely be short sales.   This is the market condition reality for the next year or longer according to Banking industry experts and Real Estate professionals based on market statistics and economic conditions.

The extremely low interest rates are bringing droves of buyers out and multiple offers on the best homes are the norm in San Jose as well as Los Gatos and all around Santa Clara County, for that matter.  Too many miners and not enough mines.  You can avoid having to compete with these buyers if you realize they are overlooking the opportunity in front of them.  The Short Sale properties.    Agents are avoiding them because they think  that most of them will never close.    Ahhaa!    The key!   Find other mines!  Be a good miner and have the sharpest pick!