Napa Solano Yolo real estate blog

I can review the steps to getting your offer approved by the bank. I know what they are looking for, I know what they want to see, I know how to protect your rights to inspections and appraisal during the process.

Buying a bank owned home is a different process than a traditional purchase, with some patience and armed with knowledge of the asset manager and the process the offer must follow will assure a successful sale.

Becoming educated on the process is your way to get the home you want in the area you choose!

Banks live by a different set of rules and values, emotion plays NO part in their decisions or processes.

Weak offers are trumped by offers that show the asset manager that YOU MEAN BUSINESS.

Whether this is your first home or your 5th home, the process of buying a home in today's market involves working with an experienced agent, one who will help guide you to success!

Call me today to discuss your goals.

Foreclosures Explained

Foreclosure occurs when a bank repossesses a property because the owner fails to pay the mortgage in a timely manner. Foreclosure is not a quick process, however. Usually, foreclosure occurs when the homeowner, or borrower, misses several payments, in California it is 4 payments. This is called a default and starts the foreclosure process. Notices must be given, time must pass, actions must be taken. Banks and homeowners have several options when faced with foreclosure. The home can be sold in a pre-foreclosure sale or short sale, can go to auction, or can be taken over by the financial institution and become a bank owned property (REO).

How Does a Foreclosure Sale Work?

Preforclosure Short Sale Process

In a pre-foreclosure (or short sale), a property may be bought from the homeowner of the financial institution holding the mortgage prior to the start of the foreclosure process. Generally, the seller is relieved of financial liability and the buyer is able to obtain a house at or below market value usually depending also upon the seller's inability to pay the mortgage and late fees and the buyer's good credit standing.

Short Sale

A short sale occurs when the homeowner receives an offer to buy his or her home for less than the amount owed on the mortgage, sometimes the bank suggests they put the house on the market and find a suitable buyer and the financial institution holding the loan accepts less than the full payoff. If there are 2 lenders the process can get muddied. One lender will make the agreement a quicker process. If the payoff on a mortgage is $150,000 and the home is sold for $140,000, the bank may accept the amount as a full payoff even though it is short, hence a short sale. Under new regulations, if the homeowner is still living in the home they may not have to be taxed on the difference, contact your tax advisor for current information on your situation.

Auction

Some banks may place a foreclosed property  up for sale in an auction to try and regain the lost amount on the defaulted property. Buyers who attend these auctions are not likely to be willing to pay full market value for the home as it will not be in prime condition and their reason for going to the auction is to get a good discounted price for the home. The price for an auctioned house may begin at the outstanding amount of the mortgage, and any buyer of an auctioned property will often have to take possession of the property in an "as is" state. Since the amount of many mortgages for homes purchased since 2004 might be more than the actual market value, you can see that this process is not working out too well lately.

REO (Bank Owned Property)

If the auction fails to attract any bids (as is currently the case most often the lender themselves must purchase the property at the auction and become the owner of the home until such time as they can dispose of it), the property may be assumed by the bank and become an REO property. Many times the Junior lienholder has a vested interest in purchasing the home at this time in order to attempt to recoup their investment as they will not be paid in any event. (Their original agreements are to be paid second) If this happens, the bank will list the REO property with a brokerage and attempt to sell the bank owned property as a normal real estate transaction. However, the bank may be willing to simply recoup the loss on the foreclosed loan.

Once again, in today's market this is not as simple as it sounds because of the decreased market value, many homes are now sold for less than the foreclosed loan value. Banks are still not willing to lose even more and will oftentimes hold out for the current market value and have been recently seen cleaning up, painting or even re-carpeting the homes in order to lure buyers to make stronger offers on the homes.

How Can Buyers Benefit?

Buyers can obviously benefit from buying foreclosures at deep discounts off market value if they are willing to wait for the right conditions. Buyers may also look at foreclosed properties as investment opportunities. Buying a foreclosed property often means the buyer must be able to pay with cash due to the condition of the home, many times FHA and VA are not allowed to agree to a loan on a distressed property and it is important that the buyer understand the local laws surrounding foreclosures and REOs.

Investors face many new regulations in the face of the current crisis and those who try to take advantage will find that in some areas of California there is a waiting period between the date you take possession of a home and when you can turn around and sell it again, the practice of flipping in a short turn around time is not allowed in some cases.

Banks will sometimes tell you they do not have to provide disclosures about the house and that they can choose the title company. It may be true that they force you to use a particular title company but you may be able to dispute this practice even after close of escrow.

California state law also mandates that smoke detectors must be installed and operate at the transfer or sale of a home and the water heater must be strapped per local building codes. These are also things that banks must adhere to.

Just remember, it is a buyer's market right now, what better time to buy than in a buyer's market. Seller's markets usually last much longer than buyer's markets and prices rise quicker than they fall in historic real estate trending studies.

The treasury bailout is not intended to help individual homeowners who are upside down with their equity or late with their mortgages. It was specifically designed to avert an economic disaster in the USA by buying mortgages and mortgage backed securities but not the mortgages of individual homeowners.

Ironically, just to let you know, if a bank fails and you have a mortgage with them, you still have to pay the mortgage under the terms and conditions of your loan agreement.

Basically, the US Govt is going to be sort of taking over many of the mortgages and if there happens to be any profit derived from this activity in the future due to an increase in equity or the simple fact that a mortgage is a good investment if you are the mortgage holder, you, as a taxpayer could also eventually profit from the increase in equities that the government plans to take on in the coming months through the bailout plan expected to be signed by President Bush today.

You may read some frequently asked questions about the mortgage bailout on this link at Bankrate website.

Sometimes our homes consume more energy than they need to, there are tools to calculate what type of fuel will save you money.

While visiting El Paso Texas this week, I found that they have an excellent site that describes energy and efficient ways to make your home squeeze the most out of your energy dollar.

If you wondered about incandescent vs halogen vs florescent lighting, natural gas vs propane fuel for cooking.

Calculate differences, read about the fundamentals of electricity. Hot tubs, spas, insulation, it's all here on one website produced by El Paso Electric Company.

If you ever wanted to visit an operating Alpaca Farm, Vacaville Alpaca Farm,  Ahh ... Sweet Alpacas, this weekend 10-4 PM Sept 27-28 2008.

Learn more about these South American animals, relatives to the Llama.

The farm is located at 7924 Charlotte Lane in Vacaville, one mile west of Interstate 505 off of Allendale Road.

If you can't come out, visit online at SweetAlpacas.com

Housing is undergoing changes that cannot be interpreted on a daily basis.

New laws and temporary laws, banking reforms, lender practices, homeowner rescue plans are all being considered and attention is being paid on how best to keep the most families in their homes during these times.

Once the new laws are in effect (the latest group will commence on Oct 1, 2008) and after they are interpreted and put into action I can then describe the benefits or reductions in benefits of each aspect of real estate housing market that will be affected in Solano and Napa county.

FHA down payment amounts, seller credits to buyers, down payment requirements, documentation of buyer assets, interest rates, mortgage holders, buyer credit scores, loan revisions, lender buyouts of reduced equity, HOPE for homeowners, FHA maximum loan rates are just SOME of the affected areas that have been revised in the past few weeks.

Banks that have been acquired by other banks in recent days will MOSTLY continue as they were until such time as the acquiring bank can assess the impact of the mergers and acquisitions.

If you have a specific question, please email me or call me so I can help identify where you can get information that applies to your situation.

If you are in danger of losing your home contact your lender immediately, insist on speaking to someone who can help you work through your situation, most people can save their home if they keep the lines of communication open with their lender.

Please email any comments or if you have specific information or experience with a certain lender that is either negative or positive so we can share information with other homeowners who may benefit from your experience.

    I can connect you with reputable local lenders who have the answers to your questions. Your payment might be tied in with Libor.

This is a benchmark rate and your ARM loan payment is probably decided by Libor plus a certain percentage point amount above that. This is spelled out in your mortgage or deed of trust papers that you signed when you bought your house.

Your payment probably stayed the same for one or more years and then in a certain year it was set to be adjusted to a new amount. In the past year or so, that amount has been MORE than your original payment, however THIS year it MIGHT be LESS because the Libor is almost HALF of what it was last year, which COULD reduce your payment when it resets, it just depends.

If you need help in getting a copy of your mortgage or in reading it to determine your new payment that is coming soon, send me an email and I will help you. Your bank most likely will not tell you what the new amount is and they likely won't tell you much of anything, even if you need to know so you can make a budget after your payments change..

With all the talk about mortgage payments going up, wouldn't it be nice to know that yours may also go DOWN?

Interest rates have gone down, check out your options, call a lender.

If you are interested in learning about products to help you save energy around your home, please join us:
Sept 13, 2008 from 10AM-3PM

892 Aldridge Road Vacaville, Ca 95688

Tri-tip & Chicken BBQ served between 11 AM and 3 PM, tickets available in advance $10 or at the door for $12.

707-446-7550

Purchase of BBQ tickets enters you into the door prize drawing.

Call me or email Barbara Adams,REALTOR for your Green Real Estate needs. I can provide you with the resources to start your home on the path to becoming greener! Green homes save the environment, resources AND your MONEY $$$! WOW! What a way to help!

Did you know that being a green homeowner can save you money on your water bill and your energy bill AND make your family healthier too?

That's right, many synthetic building products are less than healthy for your family, especially those who are susceptible to less than clean air.

Did you know there are energy efficient mortgages? They tie in with FHA mortgages or they may be stand alone loans that assist you in the installation of dual paned windows, more insulation, more energy efficient appliances too!
Check your home for energy leaks. Plant xeriscape plants that are native to the area, use tankless water heaters, install solar where you can, save a little, save a lot!

Did you know that adding an extra layer of insulation in your attic can save you money THIS winter on your heating bill?

Written by Barbara Adams, permission to reprint is not granted without written permission. 

How much of an impact does your living have upon the world?

I do not mean you personally, or your body or your personality, what I am referring to is your lifestyle and how it affects the world around you.

Living green is an idea that is more popular and easier to achieve than ever before.

Having a smaller impact on the earth is helping to preserve the resources that we have in our world.

Using less water, less fuel and fewer natural resources will help stretch out what we have.

Thinking of that, using less will also cost us less now and in the future. Use less water, pay a smaller water bill. Use less fuel and pay less at the pump, to the power company and keep some of that money for your future! Using fewer natural resources such as trees will impact everyone, now and forever.

You can capture rainwater to reuse in your garden, divert your downspouts to fill tanks you conceal in your yard, let gravity flow it out when you open the faucet.

Use less fuel by planning your trips, combining errands and eliminating useless stops and starts, avoid the drive thru lanes at businesses.

Learn to conserve, consider if you lived in an RV and you only got to use 3 gallons of water a day or less, you can learn to conserve! The average person uses 70 gallons of water per day according to water experts in Napa county.

This is a LOT of water. Now, think about saving just 10 percent of that water by stopping the water when you brush your teeth and other ideas you can come up with.

You can save a tree by ASKING for a brown paper bag, yes, I said that correctly. If you get a brown bag at the store, you will most likely be able to save the bag, fold it up after you empty it, save it, bring it back to the store the next time you go, reuse it, you may be able to do this 5 or 6 times. They can be made from recylced paper anyhow.

How about the demise of the deposit soda bottle? What is up with that? I used to drink the soda and bring the bottle back and get a dime for it! That is a dollar for 10 bottles, many people wouldn't mind picking up 100 bottles for 10 dollars and bringing them into the store, that is how they got most of them back to recycle and reuse again and again.

Check back for more ideas on how to save resources and live "green" in Solano and Napa county!

No more tax-free profits on real estate unless it’s your primary residence THE ENTIRE TIME YOU OWN IT.

This change will have more impact on the real estate market than virtually any other factor today - and especially so for baby boomers who are considering buying a retirement home for the future or electing to purchase vacation homes this tax change will likely impact them.

Hidden in the new housing bill HR3221, just signed into law is a change in the tax law that provides a huge incentive to buyers to buy real estate before the end of 2008.

ANYONE who anticipates purchasing a house in the future MUST know how this tax rule change will affect them.

If a person owns real estate today (or purchases real estate before the end of 2008) and if that owner lives in the home for at least 2 of the last five years - then the homeowner is entitled to take out any and all profits up to $250K (individual tax filer) or $500K (joint tax filer) TAX FREE when that home is sold.

UNDER THE NEW TAX RULE - if a home is purchased on or after January 1, 2009 - the profits will be allocated to "qualified" and "non qualified" time periods during the home ownership.

QUALIFIED TIME is defined as time that the homeowner uses the home as a primary residence.

ANY other usage (rental, second home, vacation home, pre-retirement home, investment home, etc) will be considered "non qualified" and the homeowner will be subject to long-term capital gains taxation (at the rate in place at the time of the sale) on the profits for that time period.

This eliminates tax-free profits on real estate unless it’s your primary residence the entire time you own it.

What this means is that anyone thinking about buying a house in the future and there is ANY possibility that you will not live in that home as your primary residence for any time period at all, you should be aware that if you buy that home after January 1, 2009, you will have to pay taxes on a portion of your profits when you sell that home.