Group Marin’s Blog

Properties that are priced to sell and are presented well are selling quickly   Those that are priced too high and are not staged to sell, will sit on the market.  Although there are many new listings… there is a shortage of GOOD inventory and homes that are priced too high are staying on the market in ALL areas.

 It is definitely NOT a seller’s market. 
However, it is a market favorable to the SELLERS if they are realistic with their pricing and are willing to get their properties prepared to sell.  Once in escrow, byers and sellers are willing to work together.  This process still favors the BUYERS (but not as heavily as in the past). 

We are seeing more BUYERS getting into back-up offer positions right now.  This tells us that if a property is not priced to sell and competitively presented, the buyers will wait for the next reasonable choice.

Currently GroupMarin works with Cynthia Cox. Cynthia is a local designer who will assist you in getting your home ready for the market. 

www.cynthiacoxdesigner.com

CC built, stagged and SOLD this beautiful home.

Sherri Belluomini 415 497.2884 www.groupmarin.com

This charming cottage is priced to sell $585,000. See pictures at www.305cortemaderaavenue.com

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.

The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.

To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.

For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.

For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.

If short sales are about to have their moment, it has been a long time coming. At the beginning of the foreclosure crisis, lenders shunned short sales. They were not equipped to deal with the labor-intensive process and were suspicious of it.

The lenders’ thinking, said the economist Thomas Lawler, went like this: “I lend someone $200,000 to buy a house. Then he says, ‘Look, I have someone willing to pay $150,000 for it; otherwise I think I’m going to default.’ Do I really believe the borrower can’t pay it back? And is $150,000 a reasonable offer for the property?”

Short sales are “tailor-made for fraud,” said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.

Last year, short sales started to increase, although they remain relatively uncommon. Fannie Mae said preforeclosure deals on loans in its portfolio more than tripled in 2009, to 36,968. But real estate agents say many lenders still seem to disapprove of short sales.

Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

Mr. Paul, the Phoenix agent, was skeptical. “In a perfect world, this would work,” he said. “But because estimates of value are inherently subjective, it won’t. The banks don’t want to sell at a discount.”
There are myriad other potential conflicts over short sales that may not be solved by the program, which was announced on Nov. 30 but whose details are still being fine-tuned. Many would-be short sellers have second and even third mortgages on their houses. Banks that own these loans are in a position to block any sale unless they get a piece of the deal.

“You have one loan, it’s no sweat to get a short sale,” said Howard Chase, a Miami Beach agent who says he does around 20 short sales a month. “But the second mortgage often is the obstacle.”

Major lenders seem to be taking a cautious approach to the new initiative. In many cases, big banks do not actually own the mortgages; they simply administer them and collect payments. J. K. Huey, a Wells Fargo vice president, said a short sale, like a loan modification, would have to meet the requirements of the investor who owns the loan.

“This is not an opportunity for the customer to just walk away,” Ms. Huey said. “If someone doesn’t come to us saying, ‘I’ve done everything I can, I used all my savings, I borrowed money and, by the way, I’m losing my job and moving to another city, and have all the documentation,’ we’re not going to do a short sale.”

But even if lenders want to treat short sales as a last resort for desperate borrowers, in reality the standards seem to be looser.

Sree Reddy, a lawyer and commercial real estate investor who lives in Miami Beach, bought a one-bedroom condominium in 2005, spent about $30,000 on improvements and ended up owing $540,000. Three years later, the value had fallen by 40 percent.

Mr. Reddy wanted to get out from under his crushing monthly payments. He lost a lot of money in the crash but was not in default. Nevertheless, his bank let him sell the place for $360,000 last summer.

“A short sale provides peace of mind,” said Mr. Reddy, 32. “If you’re in foreclosure, you don’t know when they’re ultimately going to take the place away from you.”

Mr. Reddy still lives in the apartment complex where he bought that condo, but is now a renter paying about half of his old mortgage payment. Another benefit, he said: “The place I’m in now is nicer and a little bigger.”

David Streitfeld
New York Times

Sherri Belluomini 415 497-2884

If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.

Tops on the agency’s list of advice: Cool it for a couple of weeks. Even if you qualify for one of the credits, don’t send in any requests to the IRS quite yet. Wait until later this month when the agency publishes its revised Form 5405 with the key instructions needed to get you a check from the government.

The forthcoming version of the form will incorporate the major changes to the tax credit program made by Congress in legislation signed by President Obama on Nov. 6. These include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.

In a tax bulletin issued just before Thanksgiving, the IRS emphasized that all home purchasers after Nov. 6 “must use this new version [of Form 5405] to claim the credit.” Put another way: If you send in the old version — the one you can currently download from the agency’s website, www.irs.gov — your request for the credit will probably go nowhere.

The legislation — known as the Worker, Homeownership and Business Assistance Act of 2009 — extended the $8,000 first-time home purchaser credit until April 30 for signed contracts and June 30 for closings. The law also created a new tax credit for people who have owned a principal residence for a consecutive five of the previous eight years, and who purchase a replacement principal residence with a signed contract no later than April 30, followed by a closing no later than June 30.

Qualified repeat buyers can obtain credits up to $6,500. For both the first-time and repeat buyer program, the credit is equal to 10% of the purchase price of the house, up to a maximum of either $6,500 or $8,000.

The new IRS bulletin also outlined the agency’s guidance on other important features of the amended credit program:

* Members of the armed forces, as well as diplomatic and intelligence personnel serving in foreign countries, will get an extra year to buy a principal residence and still qualify for a credit. They will have until April 30, 2011, to enter into a contract to purchase a house, and until June 30, 2011, to close on it.

* Anyone who buys a house after Nov. 6 — even those who had intended to get in the door before the previous Nov. 30 expiration date for the $8,000 credit — will now need to comply with several new rules. First, the house cannot cost more than $800,000. Second, no one under age 18 can claim the credit no matter what the circumstances. And finally, anyone who is counted as a dependent on another taxpayer’s federal filings is ineligible for a home purchase tax credit.

* The expanded income limits for purchasers after Nov. 6 range to $125,000 in “modified adjusted gross income” for single taxpayers and to $225,000 for those who file jointly. Singles with incomes between $125,000 and $145,000 may be eligible for reduced credit amounts, as are joint filers with incomes from $225,000 to $245,000. Anyone with an income above these amounts cannot qualify for either of the credits. Under the pre-Nov. 6 rules, taxpayers applying for the $8,000 credit were limited to incomes of $75,000 (single filer) to $150,000 (joint filer).

The IRS continues to offer detailed consumer information resources on the credits, including questions and answers on a variety of home purchase scenarios.

For example, some taxpayers seeking the extended $8,000 credit are uncertain about co-purchase and co-signing situations, especially involving parents and adult children. When a home-owning parent co-signs for a mortgage with a son or daughter, and both names appear on the note, can the son or daughter qualify for the first-time purchaser credit?

The IRS says the parent clearly does not qualify for any portion of the credit since he or she already owns a principal residence. But if the son or daughter has not owned a house during the three years preceding the current purchase, and qualifies on income, he or she can be allocated the entire $8,000 credit.

Similarly, when unmarried individuals co-purchase a house, and only one of them is eligible for the credit, the full $8,000 can be allocated to the eligible buyer
 Provided by Kenneth R. Harney Los Angeles Times

Home sales increased 12 percent in July in California compared with the same period a year ago, while the median price of an existing home declined 19.6 percent, C.A.R. reported yesterday. “The federal tax credit for first-time buyers played a critical role in the purchase decision of many buyers,” said C.A.R. President James Liptak. “Nearly 40 percent of first-time buyers said they would not have purchased a home if the tax credit was not offered. Because the tax credit has helped so many first-time buyers become homeowners, it is critical that Congress extends the credit beyond the Dec. 1 deadline, and includes all buyers, not just first-timers.”

Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally adjusted annualized rate. Statewide home resale activity increased 12 percent from the revised 494,390 sales pace recorded in July 2008. Sales in July 2009 increased 8.1 percent compared with the previous month. The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during July 2009 was $285,480, a 19.6 percent decrease from the revised $355,000 median for July 2008, C.A.R. reported. The July 2009 median price rose 3.9 percent compared with June’s $274,740 median price.

“July marked the fifth consecutive month of month-to-month increases in the median price,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “This was the largest increase on record for the month of July based on statistics dating back to 1979. The yearly decline in July also was the smallest in the past 19 months.”

Down a quiet lane sits an enchanting cottage. Nestled between stately oaks and a sunny back yard perfect for gardening, relaxing in the hot tub or just sitting on the deck. The central location is a short walk to downtown San Anselmo, close to parks, restaurants and schools. The charming interior will delight you with a built-in vintage china cabinet, boxed beam ceilings, hardwood floors & ample windows to provide a constant flow of sunlight.

This is one of the sweetest homes I have seen in a while. Better than a condo no HOA fees.

Go to www.groupmain.com for more pictures.

So, here we are…with less in our retirement accounts, less equity in our homes, and in some cases less income, however here we are. Whatever we’ve lost is gone and wishing that it hadn’t left won’t do a bit of good. What is left is what we have – and it might be a lot more than you think.

The intense focus on economic issues has everyone evaluating their lives in terms of how much money they have today compared with last year, and most people have experienced a reduction in new worth. Thank goodness we are more than our money.

It occurs to me that this might be a good time to take stock of all the things we still have – like our health, our relationships, and our community. Hopefully, we still have our senses of humor, our ability to smell the flowers, stare at a beautiful sunset, listen to our favorite music or a birdsong in the early morning.

It is a time to remember the power of gratitude. Sure a lot of things are gone, things we will miss. But it is important to acknowledge and appreciate what is left. As Frank Clark said, “If a fellow isn’t thankful for what he’s got, he isn’t likely to be thankful for what he’s going to get.” It is gratitude that opens the door to abundance and paves the way for a life of happiness and prosperity.

Quote of the Week by Steve Dickason

As this special time of the year we at GroupMarin want to wish you and yours a very Merry Christmas and peace, health and happiness in the New Year!

Short sales gone awry have become a recurrent theme in real estate circles.

Here’s the common narrative: A home goes on the market as a short sale – priced at less than is owed on the mortgage, so the lender must approve any sale. The bank either declines offers as too low or takes months to decide, which drives away potential buyers. Either way, the short sale never happens. Eventually the lender forecloses on the home, the owner or renter is evicted, and it is put on the market again by the bank.

This is my story…back in May I wrote an offer on a short sale in Rohnert Park. The offer was submitted three weeks before this young couple  were to be married.  When the agent called to acknowledge the offer he said it would be approximately four weeks before he had any informaton.  Well four, five, seven and eight weeks went by.  No answer. Finally the agent called and said sorry another offer was accepted and the house is in escrow.  We continued to look and one day in late August I noticed the same home came on the market as a REO and listed for $50,000 under what we had offered.  We immediately prepared another offer. The list price was $300,000.   We wrote an offer for $320,000.  I called the agent while my client was driving to Santa Rosa… I was told by the agent that our offer would not be accepted, looked at and have the client turn around and go home. I was shocked! When Brian arrived he was told the same thing. He was told…this was listed with the intention of generating multiple offers. Well the house finally did sell for less than our original offer six month earlier.  The ordeal was very frustrating.

While real estate agents, buyers and sellers say they are frustrated with the short sale process, Rick Simon a spokesman for Countrywide (B of A) said banks are working as hard as they can to keep up.

“The volume of short sale requests is at unprecedented levels,” he said. “More than ever, buyers are making low-ball offers just to test the pricing levels. Each requires the same time and trouble to review as offers that actually will be accepted. A lot of offers are being reviewed that are not going to be in the ballpark for being approved.”

Nationwide, 1 out of 7 homeowners is underwater – owing more than their home is worth, according to real estate information service Zillow.com. In the Bay Area, the figure is even higher: 1 out of 5 is upside down, as the situation is also known. An underwater borrower who needs or wants to sell will generally be in a short sale situation.

Theoretically, a short sale should be a win for the borrower and the bank. The homeowner’s credit isn’t hurt as much by a short sale as by a foreclosure. And the lender doesn’t incur all the costs and holding expenses of a foreclosure.

But although no one keeps firm statistics, according to many real estate experts, the reality seems to be that banks are extremely reluctant to approve short sales, and often let properties go to foreclosure, even when there are decent offers on the table.

Besides looking at the price, lenders consider whether the homeowner can show financial hardship that he or she cannot meet the payments.

“You can’t ask the investors (the actual owners of the mortgage, for whom Countrywide and other lenders act as servicers) to take the hit on the property just because someone is looking to walk away and doesn’t want to make payments anymore,” Simon said. “They need to demonstrate, make some declaration that they are in a situation where they cannot continue to make payments on that loan. If they are capable of making those payments, there may be other alternatives that need to be explored.”

Simon said Countrywide tries to determine whether a loan modification or work-out plan might make it possible for borrowers to stay in the home.

Countrywide, like other lenders, has added employees to meet the increased volume, Simon said. In October, the lender completed 3,000 short sales – triple the number from a year ago, he said.

Information taken from S.F. Chronicle 11/30/08