Appraisers Hold the Key to Selling Your Home in Santa Clarita.

In this current economy and real estate market, we continually hear that nobody can get loans and that is why homes aren’t selling.  Well this is partly true.

Appraisals are the main culprit in killing escrows right now.  It used to be that Realtors and home sellers felt relief once a buyer was approved by a lender for a loan and a “Letter of Intent” was issued.  No more!

But let’s not start blaming the appraisers.  They are actually doing a much better job than they did during the “sub-prime” era.

Since the HVCC (Home Valuation Code of Conduct) became effective May 1, 2009, banks are hiring third party appraisers for their loans.  These appraisers are doing a lot more work for less money, and for the most part, the appraisals are being submitted to the banks fairly accurately.

The real problem is the market data – the comparables.

Foreclosures, Short Sales, REO/bank owned sales, etc are usually sold below retail, and these homes are negatively affecting home values in the Santa Clarita Valley and throughout the country.

On a recent transaction, I represented a buyer who was relocating to Valencia.  Their home in Nevada was sold and in escrow.  Their buyer had signed off on all of their contingencies and had performed all of their inspections, which meant that escrow was a couple of weeks from closing… but the appraisal came back low – $70,000 too low!  My buyers had a beautiful home in a gated golf course community.  There were also many beautiful homes in their neighborhood which had sold at auctions, as Short Sale bank approvals, REOs, you name it.  Also, there were several active Short Sales on the market.  These distressed properties were adversely affecting my client’s home value, and directly ruining their chance on buying their new home out here.

So what did they do?

My clients shelled out $400 themselves for another independent appraisal which came back $30,000 higher.  It the end, it worked out.  The new appraised value of their home and their buyer’s loan was now only $5,000 apart.  Since their buyers really wanted their home, they chose to pay the additional $5,000 as part of their increased down payment.

Appraisals are currently making escrows shaky, but both the buyer and seller have a few options to save the deal and close.  I hope you found this information helpful.

If I can be of any assistance to you in buying or selling your home throughout the Santa Clarita Valley, please contact me.

Why Is a Property’s Listing Status Different on Other Websites?

One of our clients asked us a great question.  They wanted to know why they sometimes find a different status for a particular listing on different websites.

A great example is this:  You would like to inquire about a home that you found with a For Sale sign in the yard.  You visit the agent’s website from the sign, and it states that the property is Active.  After some further searching on the internet, you discover the same property with the same purchase price on Realtor.com.  Only on this website, the property states that it is in Pending status.

And as agents, we wonder why you get frustrated with us…

It is important to understand that the Multiple Listing Service (MLS) contains the most accurate and up-to-date information for any property that is listed for sale.  All Realtors hold a primary obligation to their Associations, which manages their MLSs.  Any and all changes to any real estate listings must first be handled in the MLS.

Now some aggregator websites like Realtor.com get data feeds from every MLS in the country.  Therefore, their information is usually current, but it could take up to 24 hours to take effect.  Other sites like Trulia.com or Zillow.com require the agent to login and make the necessary changes to the listing in their website.  If an agent is organized and detailed, there is a good chance that their listings are up to date.

Remember that all property search websites either get their information from the MLS data feeds or rely upon the agents to make changes.  But these sites provide a great service to the consumer by providing as much information about a property for sale as ever before.  The most accurate, real-time data can only be found on the MLS, which is one of the reasons why Realtors only use this system.  Other reasons are that property showing information, commission amount, and agent remarks about the deal can only be viewed by licensed Realtors with MLS access.

We hope this helps to explain the process.  Today, many agents offer property search tools on their websites.  We do as well.  Please visit our Property Search page to search for any residential properties throughout Southern California.

If we can be of any assistance to you in buying or selling your home throughout the Santa Clarita Valley, please contact us.

You Can Get a Mortgage While on Disability

Today’s lender has lots of money to lend on a mortgage.  Contrary to popular opinion, loans are being funded, but only to those with decent credit.

If you are on disability and have decent credit, there is a very good chance that you can be approved for a mortgage or a refinance.  Below are some of the guidelines:

• You and your employer have set a specific date for your return to work.
• Your employer is giving you back the same position that you had before your disability.
• You will be earning the same wage upon your return.

Interest rates are now at their lowest ever, and there are many great homes for sale.  Please do not pass up on an opportunity to purchase real estate because you think that you cannot get approved for a loan.

Just spend a few minutes on the phone with our local preferred lender, and you can have an answer to whether you could get a mortgage or refinance.  You can find out if there is a possibility of getting a loan even without having your credit score pulled or sending documentation to the lender.

Please contact me immediately so that I can put you in touch with a great lender who will get you your answer fast!

Home Sellers, Don’t Count Your Chickens Before They Hatch

Are you a home seller who has become excited because your neighbor’s house is in escrow?  Remember that it’s not sold until it’s sold!

Summer has arrived with a renewed interest from home sellers eagerly trying to sell their home.  In a normal real estate market, the summer marks a time in the year where the real estate activity peaks as buyers seek to find their new home before the new school year begins.  Conversely, home sellers anticipate this increase in activity which can help to sell their home.

Obviously, this is not a normal real estate market.

What I have been noticing lately (the last couple of months in particular) is that homes with equity are coming to market and getting offers (often multiple offers) and coming off of the Active market rather quickly.  These homes enter the Pending or Backup Offers status and supposedly open escrow.

But weeks and weeks go by, AND the home comes back on the Active market again.

What I suspect is happening is that buyers are not being able to secure proper financing, the homes are appraising too low for the bank, or eager sellers (and their agents) are so excited to get a solid offer that they will accept an offer from a buyer who is contingent upon selling their current home.  There are more scenarios which cause homes to come back onto the market, but these are the most common ones.

If you are currently a home seller or are anticipating placing your home on the market, please be careful when pricing and comparing your home to your competition (neighbors).  You should only consider Sold homes within the last 3 months and within a ¼ mile radius of your home.  Yes, you need to know what other Active and Pending homes are listed at in your community, but…

Remember that it’s not sold until it’s sold!

If I can be of any assistance to you in buying or selling your home throughout the Santa Clarita Valley, please contact me.

What Is an Earnest Money Deposit, and Why Is It Needed to Make an Offer?

We get asked this question quite often from our buyer clients, and we know that some of you would like some clarification as well.

An earnest money deposit is required with every offer.  It basically shows the seller that you are a serious buyer, and that you are delivering them an offer with a portion of the down payment in advance.  Typically in residential real estate, a 3% (of the offer price) earnest money deposit is delivered with the offer.

This amount is only drawn from your account once an agreement has been made with the buyer and seller.  Escrow opens right after this, and the buyer has 3 days to submit their earnest money deposit check.  Escrow then deposits this amount into a neutral account until closing, and the amount gets deducted from the total down payment.

The buyer usually has around 17 days (this time frame is negotiable) to conduct their due diligence on the property.  Not until the 17 days expire and the buyer has removed certain contingencies (and feels comfortable that there is nothing else to discover about the property that could change their mind) is the earnest money nonrefundable.  Until this happens, the buyer can cancel escrow for any reason and get their earnest money deposit returned to them.

We hope this helps to explain the process. 

If we can be of any assistance to you in buying or selling your home throughout the Santa Clarita Valley, please contact us.

For Santa Clarita Real Estate, Is Cash Not King Anymore?

Cash talks, loans walk…right?

In today’s real estate market, cash is supposed to be king.  It’s what allows investors to snatch up great real estate properties better than anyone else.  In most cases, they can buy the real estate “as-is”, close escrow quickly, and rehab the property far quicker than most buyers with a conventional or FHA loan.

For the past three years, these cash buyers have clearly had an advantage when compared to similar buyers bidding for the same properties.

REOs

Bank owned real estate typically loves dealing with cash buyers.  The deals are less complicated, and the buyers will accept the property in its “as-is” state.  A huge advantage that cash buyers and investors enjoy in purchasing REOs is that they can submit low-ball offers (far under what the loan buyers or primary home buyers would offer for the same property) and the banks would often accept the all-cash offer over any loan.  Accepting a loan offer means that there is added risk to the bank in having the buyer not secure financing and/or having the property not appraise for more than the purchase price.  In most cases, banks prefer cash transactions that guarantee closings.

This is starting to change…

Auctions

This is the one place where the cash buyer or investor has much stiffer competition.  At an auction, one is required to have a cashier’s check or provide all-cash within 24 hours of winning a purchase.  So everyone here has cash.  And there used to be more than enough deals for everyone to share.

This too is starting to change…

I have been working closely with a flipper in the Santa Clarita Valley for the past few months.  This investor likes to buy REO homes with cash.  Then he rehabs them, and sells them at retail on the market.  Lately, our system is not working like it once did.

The main culprit is actually the banks.  You see, now that the real estate market has firmed up a bit and there is very low inventory for sale, the banks are starting to place their REOs at higher list prices onto the market.  These prices are much closer to comparable standard sale properties (even if they need a bunch of work).  Because of supply and demand, the banks are artificially raising prices (and their profits on each sale).  This is sort of how I imagined this market behaving in a previous blog: Conspiracy Theory Causing the Housing Shortage?

On the auction side, close to 65% of all homes that come up for bid are cancelled or returned to the bank.  Two things are happening with this: 1) the decent properties are being bought by the bank to place on the retail market because they will make more money in the real estate market than at an auction, and 2) the steep discounts that cash investors used to get are withering away.

We are finding the real estate market start to firm up in most areas of the Santa Clarita Valley.  The market might not provide as large an advantage for the cash buyer or investor as it once did, but an improved real estate market is better for everyone in the long run.

Are you a home buyer or investor in today’s real estate market?  Are you experiencing any of these issues? Please feel free to comment about it below.

If we can be of any assistance to you in buying or selling your home throughout the Santa Clarita Valley, please contact us.

The City of Santa Clarita has a brand new Permit Center inside City Hall

The permit process has become more streamlined an efficient in Santa Clarita.  Now the Departments of Building & Safety, Planning, and Engineering are available to help you together in one place.  The Grand Opening will held on March 9^th.

If you are interested in learning about the new permit process at the City of Santa Clarita, then please watch this brief video from the City Building Official, Ruben Barrera.

Please feel free to comment below.  If we can be of any assistance to you in buying or selling your home, please contact us.