Thomson Team Homes

New Law Passed Affecting Short Sales In California

thomsonteam — Mon, 25 Jul 2011 16:49:39 +0000

Well, we have good news! Governor Brown passed SB 458 into law which mandates the full release of all junior liens if a short sale is approved. This means that homeowners will be protected from any further recourse on all liens if a short sale is approved and closed. Read below for more information:

CALIFORNIA ASSOCIATION OF REALTORS® applauds Gov. Brown on signing SB 458 into law

LOS ANGELES (July 15) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown on signing SB 458 (Corbett) into law. SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.

Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”

SB 458 contains an urgency clause making it effective upon signing.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

All information from the California Association of Realtors

The one drawback to this law that has been forecasted by certain professionals in the industry is the fear that junior liens will be less inclined to approve short sales. Some believe that junior liens would rather allow the 1st to foreclose rather than relinquish their right to pursue a deficiency judgement against borrowers. Time will only tell what any ramifications may be, but for now, we are happy to hear that homeowners are protected.

Kelsey

How We Get Our Offers Accepted

thomsonteam — Tue, 05 Apr 2011 20:23:18 +0000

Hey buyers J Lately, I have been servicing buyers looking for property up in the Cupertino, Mountain View and Sunnyvale areas. There have been weekends where we look at a total of 12 homes! It is true that there is definitely no shortage in the marketplace when it comes to options. Even though the weather hasn’t been great, open homes are crowded, we are experiencing a multiple offer situations and many homes are selling for over list price. I wanted to address, today, how to get I try to get my buyers offers noticed over the other offers, which are many times higher in price. Now, not all of these options are available to all buyers. Some are too risky and others are just not an option. Here are some sure-fire ways to get noticed:

I always present the offer in person, if possible. Sometimes listing agents are not open to meeting in person, but most times I can schedule an appointment to present in front of the agent and the seller. It allows them to make a personal connection with me, my client and ultimately remember my client’s offer over the others that are just emailed over. It also shows that I am an agent who they would like to work with – who is proactive and professional.
- Buyer should always write a personal letter (with picture) to the seller and sign it. I believe this important even on a short sale.
Financing – There are many ways in which a buyer can beef up the offer, but financing is a biggie.
- The more money the buyer puts down on the transaction, the stronger the offer will be perceived to be. This is not always a valid perception, but it is a reality that a seller is going to see that the smaller the loan, the easier it will be to get approved
- Submit a pre-APPROVAL (not pre-qualification) letter from a Direct Lender. Broker-letters are not perceived to be as strong as a letter from a Direct Lender. I always request that the loan officer follow up with a phone call after the offer is presented.
- Submit proof of your funds upfront – show the seller liquid (if possible) funds that are ready to go
- If the buyer is not as strong as a 50% down conventional buyer, maybe he/she is an FHA buyer, show his/her commitment to the transaction in other ways. If it’s a short sale, the FHA buyer is likely to stick around longer than a conventional buyer who can easily get acceptance on another property while waiting for this one to be approved. I’ve gotten a few offers accepted this way that were far under the highest monetary offer.
Contingency Periods – be as short as possible without giving too much [it's not a good strategy to go back and ask for an extension after the fact].
- Appraisal – if the buyer is putting a lot of money down on the transaction, I always mention the option of removing the appraisal contingency. With a low loan-to-value, if the home doesn’t appraise at the contract sale price, then the buyer will not be at risk of an adjusted rate, term or cost of the loan.
- Inspection and Disclosure – We usually shorten them from the 17 days that is on our CAR contract. I can get these done within 10 days or sometimes less if need be.
- Financing – Before changing the financing contingency from the 17 day mark, I always check with the buyer’s lender to make sure that we can decrease that amount.
Seller Paid Costs – Take some or all of the burden off of the seller
- Everything is negotiable. The buyer can come in a pay for any multitude of items. If the buyer would like to keep the purchase price low (maybe for tax purposes), the buyer can get creative and offer to pay for:
  - The Escrow and Title charges
  - Transfer Taxes
  - Real Estate Commissions
  - Short Sale Negotiation Costs
  - Termite Section 1 and Section 2 clearance
  - Any other repairs that need to be done before close of escrow
Upfront Documentation – If there are inspections, reports or disclosures, always review and authorize them ahead of time before submitting your offer. Submit the authorized documents and the removal of any applicable contingencies upfront.
Price – In the end, when you are up against a multitude of offers, it comes down to price
- Offer at or above market value in a multiple offer situation. Market value is not the same as list price. Many properties are under listed so as to attract multiple buyers. It is my belief that if a buyer falls for a home and doesn’t get it, it’s far worse than maybe overpaying at the time of purchase by $5,000-10,000 to get the home. In reality, our market is getting better and the values are increasing in certain areas. If I were to do a market analysis to help my client decide on a price to offer, it may be lower than what it will go for because there is demand and that demand will set the real value. Since there is demand on almost every property in our area, we haven’t been able to catch up with it over the last couple of months in regards to the appraised value. Also, when looking at income property or high-end, unique properties – the value is relative based on demand.

I hope this helps any buyers who are having trouble getting noticed. There are many cash investors out there in direct competition with first time buyers. The first time buyers with financing may need to give a little bit more to get acceptance on a contract.

Happy Shopping!

Kelsey

A New Year

thomsonteam — Fri, 04 Feb 2011 20:49:41 +0000

Time seems to go by so fast now. Am I getting older? That sounds like a really “old person thing” to say! Be that as it may, it’s so true. Hello, it’s been SO long since I last blogged… I’ve been focused on our newsletter - The Thomson Times – and have neglected my blog. In work, transactions generally take longer and it makes it seem like I open a file and then when it (the short sales for the most part) closes, 4 months down the line, I am always asking myself, has it really been 4 months?

We are definitely in a new market here in San Jose and Santa Clara County that is now the norm. 2011 and on, we won’t be going back to “easy” loans where the borrower need not provide any real documentation to support their “stated” income. Lenders continue to make it difficult for self-employed borrowers to obtain financing. Rates are still great, so it makes it an easier pill to swallow that for a 30 year fixed, you are still in the low 5% range depending on the borrower’s current situation. Aside from the rates, home prices have gone down since last quarter and are planing out at the bottom. In my personal life, I have decided, this is it – this is the bottom – and I am personally in escrow to close on an investment property in San Jose with positive cash flow. Ask me about it All in all the consumer who is able to invest in this market has it pretty good. There are just a few pitfalls that you must be aware of when looking for a property or when selling a property in this market:

Loan Type - if you are obtaining an FHA loan, you must be aware of certain restrictions of property type when looking for a new home as not only does the borrower need be approved for the lending, the home being purchase also needs to be approved through the FHA appraisal. The appraisal needs to show that the property is safe and adequately livable based on FHA standards.
Financing – be sure of your pre-approval. If any item changes in your current financial situation or you are thinking about making a change, it’s best to run this by your lender first. Likewise, it is equally as important for the listing agent to stay in contact with a buyer in escrow if you are selling your home as life happens and many escrows don’t make it to closing over the buyer’s financing these days.
Short Sales - if you are a buyer looking at short sales, it is important to truly qualify the sale as a sale that will actually close. It is not all uncommon for an agent to be representing a seller in a short sale situation that simply will never truly close because of a foreclosure sale date that cannot be postponed or because they do not qualify for a non-recourse option and will most likely end up in foreclosure. Said buyer in this situation should make sure he/she is able to get as much information as possible and make the decision upfront on whether to stay and wait it out or move on to a more stable transaction.
Short Sale – Sellers need understand the qualification process and also what the possible tax ramifications are for a short sale vs. foreclosure so as to make the best decision for their family. Always consult a tax professional who understands short sales.
Bank Owned - understand the risks in entering into a contract with the bank. There are new items that pose potential “hiccups” in a transaction such as investor “bundles” that could cancel an active escrow or rights of the past owner under the redemption period. There are two types of foreclosures – Judicial Sales and Trustee’s Sales. The Trustee’s Sale redemption period is only 10 days which is largely a non-issue as far as we are concerned. The kicker is the Judicial Sale where the past owner has a one year redemption period on the home. Lucky for us, most foreclosures in California are Trustee’s Sales.
Bank Owned and Short Sale – navigation of all of the extra paperwork with these types of transactions are very tedious and may obligate certain parties to more than the C.A.R. contract that is used for regular sales. It is important to go through every piece of documentation so that all parties are aware of potential pitfalls here.

I hope this sheds a little light on what we have been experiencing in our little world of Real Estate. I know I just grazed the tip of the iceburg here with the potential hiccups that can be experienced in a transaction these days, so feel free to comment if you have your own experiences that you would like to share or if you have questions on what was listed in this post.

Happy Friday!

Kelsey

Cambrian Open Home Notes

thomsonteam — Sun, 14 Nov 2010 20:57:41 +0000

Here I am at my new listing in Cambrian. It’s Sunday, 13 minutes in thus far, and I haven’t had one person in yet. I am confident that it will be as busy, if not busier than yesterday. I had 18 interested groups through to tour the home yesterday!! A good open house would be 5-7 groups, so that was smoking! I was able to answer a lot of questions of interested buyers that were touring the home. Since I had a lot of good questions, I thought I might repeat and answer them again for my online readers.

Let’s first give a little background on this HOME:

1790 Oakwood Avenue, San Jose CA 95124

This is our 4th day on the market. We are priced at $549,000. We are a 3 bedroom, 2 bathroom, 1500 square foot home with a 6930 square foot lot. Great schools — Satorette Charter Elementary (API 898), Price Charter Middle (API 864), and Branham High (781). We are very close to Target, 24 Hour Fitness, Home Depot, Starbucks, etc. The home has some quality upgrades: both bathrooms have been remodeled, crown molding, double paned windows, plantation shutters, granite countertops, hardwood floors, closet organizers and insulated walls. The home is across the street from Butcher Park which is not associated with a school, but does have a lot of soccer games on the weekend which makes for congested streets on Saturdays and Sundays. So, there is the broad overview on the house — great location, great schools, great house!

The type of sale is a short sale, which is where most of the buyer-questions were centered:

“We have FHA financing, will there be a problem obtaining financing on this house?”

“No. you should not have a problem getting this house approved through FHA financing. FHA lenders are concerned with the safety of the home. Before an FHA loan can fund, the appraiser is charged with also inspecting the safety of the home. If there are items like: unsafe structures, exposed electrical, leaking plumbing, etc., these items need to be cured before escrow can close on an FHA loan. To give an example, I was representing a buyer on a purchase and we had to replace a couple of outlet plates and also paint the back deck before we could fund the loan.”

“With the short sale, how long will it take to get approved?”

“The lender will most likely render a decision before 4 months and we will most likely be able to close between 4-6 months. We have 2 loans on the property, so it may be more towards the 6 month marker”

“What happens if we put an offer in and get acceptance by the seller and then we decide to cancel the contract? Can we do that without being charged by the bank or the realtor?

“Yes! You have not removed your contingencies yet, you can cancel the contract. What’s more, if the lender approves the sale at a higher purchase price than what you offered, you can cancel the contract.”

“When do we do our inspections? When do we put our deposit money in?”

“All of the time periods of the contract will start when we receive written confirmation that the lender or lenders have approved the short sale and all parties agree on the terms laid out by the seller. At that point the contract timelines start and the buyer will have however many days negotiated in the contract (usually 17) to conduct their investigations (order inspections), obtain financing and make a final decision to purchase the property before removing contingencies.

“I don’t have a buyers agent, but I would like to put an offer in on the property. How would I do that? What is the cost of using a buyer’s agent?”

“Yes, you can put an offer in on this property and it is in your best interest to have a Realtor draw up your offer on the CAR contract. There is no cost to employ a Realtor to assist you to make an offer. The buyer’s agent’s commission is paid by the Seller (in this case all Real Estate commissions are paid by the lender). It is in the best interest of a buyer to use the services of an agent because only 15% of homes on the market are held open. Therefore, you would be limiting yourself — especially in regards to short sales and bank owned properties. I would be happy to help you with that!”

Well, now we are ~~33 minutes~~ 56 minutes in and I am surprised that ~~not one person has come through yet!~~ only 1 group has come through!! Usually Sundays are much busier than Saturdays What’s going on?? I don’t want to be here too long by myself or else I’ll end up eating all of these cookies and pumpkin bread!!

Yummy Goodies For A Fall Open Home

Statistics For Your Wednesday

thomsonteam — Wed, 03 Nov 2010 17:47:04 +0000

Fresh off the Wednesday Broker tour for Blossom Valley, Cambrian and Almaden I thought I would share some relevant information regarding our current market place. We are currently experiencing a declining inventory. We are at 4038 properties available county wide which is down from last week. This is a normal trend as we are heading into the holidays, but we are holding our breath to see if any more bank owned properties will hit the market before the year end. Right now there are 257 unsold REO (bank owned) properties county wide. There is a healthy competition in the marketplace which is driving prices up a bit, but once more inventory hits our market we may expect to see a slight drop in values. Our slowest moving markets are still Willow Glen where 21% of the inventory is in contract and Los Gatos where 18% of the inventory is in contract. Our hottest markets are Cupertino where 43% of traditional sales are in contract and South San Jose where 57% of traditional sales are in contract.

Interest rates came up a bit in the beginning of this week, but dropped a bit yesterday and then again today. We are currently at 4.125% on a 30 year fixed, conforming loan amount, paying no points*.

If you are looking for any other specific market information, please feel free to contact me at 408-531-4469.

Kelsey

*Interest Rates are provided by Client First Home Loans and are subject to change without notice with the market fluctuation. Criteria is based on loan amount under $417,000. Borrower must have adequate credit history, credit scores, equity in home, income and assets. There may be other criteria required.

Funky House

thomsonteam — Tue, 19 Oct 2010 17:22:37 +0000

So, I’ve seen my share of odd homes in Santa Clara County. I love seeing what people try and do with their homesteads… adding rooms in interesting places, garage conversations (a San Jose favorite)… who needs a garage when we have such great weather?, basement bars, basement rooms that look more like dungeons, houses within houses, backyard “shantis” where 5 more families live on the property… and the list goes on. Well, the other day I came across a very interesting home modification that I thought someone may appreciate. This home in downtown San Jose is 109 years old and is an absolutely gorgeous Victorian. As it happens with homes of this age, they have seen their fair share of homeowners and renters pass through over the years, each one adding (or taking away) from the home. This home has lath and plaster walls, an old chimney which has been closed off, a second chimney (also abandoned) which was used as the original heater and a “secret” attic that the owner was in the process of converting into a master bedroom – here begins the source of funkiness for this home. At first I didn’t know that there was an accessible attic in this home. I meandered through not bothering to open the door in the kitchen which ultimately led upstairs, because it was a pantry door. It was only after I wandered into the backyard to get a good look at the roof that I noticed a skylight that I hadn’t seen shedding light inside the home. So, I went back in opening doors to find out how to get upstairs when I found the old pantry had been “converted” into a staircase that reached up into the attic space… this little addition was definitely NOT original and seriously lacked planning since the middle landing of the stair case butted right up to a window that a child could easily walk right through… Once upstairs I was surprised how open it was up there. Although it was complete bare – no floors, no furniture and only one measly light bulb for light – I could immediately see the potential for remodel. I explored the area which only boasted of walled of areas where there was an idea of a room and an idea of a bathroom. The homeowner got as far as running the plumbing upstairs for a future bathroom. Here’s where it got funky… As I was examining the thought process behind the layout and was looking at where the shower would be, I couldn’t find the drain for the shower. I thought to myself that the lack of drain was interesting since all of the other plumbing was viewable. I chalked up to “weird” and then went downstairs to finish my inspection of the property. I ventured outside and looked under the home and to my surprise I saw a drain pipe coming out of the abandoned chimney!!! So, instead of running the plumbing in the walls, someone had decided to use the abandoned chimney has housing for the drainpipe (and probably sewage pipe as well!). Very creative… It was never finished, and the pipe did not connect to anything. What can we learn from this story? The lucky buyer who decides to purchase this gem will have a lot of corrective work on their hands.

Kelsey

The Working Mom

thomsonteam — Wed, 28 Jul 2010 22:45:18 +0000

So, many of my friends, family and past clients have been asking me what the plan is after the baby comes. That’s right!! We are expecting a new little member of the Thomson Team to be joining us come October. What does that mean for the team? We are growing in numbers : -) In preparation for this new addition, we have hired an administrative assistant to help with daily tasks and also a buyer’s agent to assist me in showing my clients property. Our buyer’s agent is a valued member of our team who will work alongside of Robbie and I to make sure that each buyer is receiving the attention needed to search for that perfect home. Ms. Buyer’s Agent is a licensed Realtor who is an expert with many years’ experience in showing property and finding buyers that perfect home, she is amazing! The market is moving fast, and so Buyer’s must also be able to see property as soon as possible, a 3^rd agent on the team for the price of one makes all the sense in the world to our clients. We want our clients to have the best of care during this transitional period and are willing to do what it takes to make sure that this happens. I will be introducing our buyer’s agent soon through The Thomson Times as well as Facebook, the Blog and our website – so stay tuned!

Referral Request: Do you know anyone that may be looking to buy or sell today? One hundred percent of our business is from your continued support. We specialize in working with buyers, sellers (whether it is a traditional or short sale), commercial real estate and real estate financing. I appreciate any referral that you can send my way. My past clients and friends know that I take great care of my clients and I look forward to working with any referral.

Thank you in advance for your continued support!

Kelsey

What To Buy…? Condo / Town Home / Single Family Home?

thomsonteam — Mon, 28 Jun 2010 23:41:48 +0000

Buyers who have recently entered the market have found that they have the opportunity to purchase a class ONE property rather than be limited to a class TWO property. The difference between the two classes is this: class ONE properties include Single Family Homes and class TWO properties include Condos and Town Homes. The difference is huge! Single Family Homes, the good’ol, all-American dream usually is located among other SFRs. The owners, in most all cases, have free reign over their “domain”. They can alter all aspects of the home, landscape their back yard, rent it out without restrictions, etc. In most cases in history, ownership of the coveted SFR was difficult to attain whereas the condo or town home was an easier goal to realize for the young first-time home buyer. Purchasing a class two residence has its own perks and downsides. In most cases, you will be paying less for a class two property in the same area as other SFRs. Once a buyer purchases a condo/town home, he will soon be used to shared walls, HOA fees, close quarters with other owners, restrictions on modification of the property, etc.

The reason I bring this up is the inventory is telling us that Single Family Homes are the way to go right now! Over the last week alone Class One Active listings increased by 102 homes, but Class Two increased by only 2 units!! That’s 100% difference!! At the same time, Pending SFRs decreased by 56 while Condos/Town Homes decreased by only 5!! Let’s pick one area, Cambrian, where the median home price of an active listing right now is $656,900 and the median sales price over the last month is more around $600,000. If you look at the end of the Sold Analysis, you will see that, in Cambrian, homes are selling for 100% of the list price on average (meaning the list price in Cambrian is usually right on).

Mortgage Snapshot:

Purchase Price: $600,000

20% Down: $120,000

30 Year Fixed: $480,000 (High Balanced)

Interest Rate: 4.625% (No Points Charged; Standard Closing Costs Apply – ask for more information)

Payment:

$2,467 – Principle + Interest

$100 – Property Insurance (est.)

$625 – Taxes

$3,192 Total

5/1 Interest Only ARM: $480,000 (High Balanced)

Interest Rate: 4.500% (No Points; Standard Closing Costs Apply – ask for more information)

Payment:

$1,800 – Interest Only

$100 – Property Insurance (est.)

$625 – Taxes

$2,525 Total

Here are the stats:

Kelsey

Some Stats For Your Wednesday

thomsonteam — Wed, 28 Apr 2010 20:03:46 +0000

Wondering how the Real Estate Market is moving this rainy April? FAST! With the Federal first time home buyer credit expiring within the next couple of days, there has been an extra surge of movement. Those first time buyers are more motivated than ever to get their offer accepted and win their $8000 in tax credits. Now, with the Federal credit expiring, the new California credit is in effect as well – allowing some buyers to “double dip” into both pools of credit. The California tax credit is $10,000 and paid out over a period of 10 years.

Let’s look at the numbers:

AREAS 1-23 (GILROY – SUNNYVALE)

SINGLE FAMILY HOMES

Date	Active	Active % Change from Previous Week	Pending	Pending % Change from Previous Week
4/3/2010	2141		2901
4/10/2010	2226	Up 4.0%	2979	Up 2.7%
4/17/2010	2257	Up 4.1%	3059	Up 2.7%
4/24/2010	2328	Up 3.1%	3126	Up 2.2%

Overall Change from 4/3 – 4/24 : Active – Up 8.7% | Pending – Up 7.7%

CONDOMINIUM/ TOWNHOUSE

Date	Active	Active % Change from Previous Week	Pending	Pending % Change from Previous Week
4/3/2010	890		1205
4/10/2010	922	Up 3.6%	1228	Up 1.9%
4/17/2010	909	Down 1.4%	1275	Up 3.8%
4/24/2010	960	Up 5.6%	1295	Up 1.6%

Overall Change from 4/3 – 4/24 : Active – Up 7.9% | Pending – Up 7.5%

MORE DETAILED NUMBERS:

The market is moving quickly with numbers in most areas increasing. Although we are not seeing more REO property on the market yet, the activity is still there and now Sellers are grasping this fact as well and listing their properties with an almost garuntee that they will be looking over multiple offers. Property owners thinking of selling this year would do themselves a favor and get on the market before more bank owned properties take over the scene.

NEXT blog: Foreclosure Radar in Your Area – what properties are coming in next in Santa Clara County that will affect your home value?

Kelsey

Is Real Estate A Crappy Job?

thomsonteam — Fri, 02 Apr 2010 21:52:36 +0000

Showing property is not always a walk in the part as I have recently found. You think that a client likes one type of home and then you show him, and he changes his mind. Usually all that I have to overcome is lack of buyer-creativity, but in this instance it was a little more involved than that. People ask if being a Realtor is a crappy job, and in some instances, it is!

I was taking an elderly gentleman to look for homes in San Jose. We were at a cute condo and he says” I really gotta go” I say “ok, let’s go”, thinking that he needed to leave right away. He replies, “No, I really gotta go, if you know what I mean!”, and I say ” Oh, well, that way to the bathroom” and point to the hall bath. I wait for a few minutes by the front door to give the man some space and as I wait, I notice brown drops of something trailed across the white living room carpet… Curious, I go to investigate and discover, you guessed it, he didn’t quite make it to the bathroom!!! No Way! YUCK. Thank fully the listing agent had left cleaning products under the sink and I got all the you know what off the carpet. As I was kneeling there on my hands and needs, I think to myself, this is going WAY beyond the call of duty.

Real Estate always brings us surprises… Most of the time they are fun, great surprises, but other times they are just downright crappy. Don’t just think Real Estate is a walk in the park…