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130 Offers!

11 Feb

I had a Buyer ask me yeSold homesterday to research a home in Fontana for them.  It is a 3 bedroom, 2 bath, 2 story home on a cul de sac for $175,000.  The listing agent told me she was overwhelmed with 130 offers in just a few days!  I have told this story many times today to my buyers who are getting very discouraged looking for a home.  I have only one thing to say – this is a tipping point.

The Inland Empire is seeing real estate activity like we have not seen since 2005.  There are more homes in escrow at this point then there are homes on the market for sale in almost all cities.  The other rare statistic at this time is that every city is experiencing more leases on the market than homes for sale. Will the investors get wind of this and back off?  I hope so!  Leases are staying on the market longer and we are seeing the rents going down.

The city of gracious living, Upland, has 76 homes for sale today.  Back in January 2009 there were almost 300.  Rancho Cucamonga has 140 homes for sale today compared to 4 years ago when there were about 450.  And Fontana has 146 total homes for sale today compared with almost 1400 in early 2009 – that is amazing.  Some people are thinking that we are going to get in to trouble like we did 6-7 years ago but I don’t think so.  Homes are being bought with all cash or 20% or more down payment now.  There is equity in these sold homes.  Builders are scrambling to get up and running this year.  They thought they would wait until 2014 to ramp up their stock but they are seeing the demand every weekend when the new home models are being visited by hundreds of buyers.

It is an exciting time if you are a Seller.

 
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How Many Homes For Sale in October 2012

10 Oct

The fourth quarter of 2012 is 9 days old and it looks like the last 3 months of this year will be very interesting.  Inventory is at rock bottom and so are interest rates.  Buyers are getting more frustrated as their offers are competing with 20+ offers on almost all new listings.  Buyers are bidding sometimes $20,000 over list price and some Sellers are countering back and asking the Buyer to make up the difference if the appraisal does not come in at the agreed upon price. This all reminds me of “the good old days” of 2006, right before the bubble burst.  But there is something very different happening this time.  No “100% financing”!  I am seeing many homes bought with all cash or 30-50% cash down payment.  The FHA and VA Buyers are pretty much being aced out of buying a home as investors and conventional buyers gobble up the inventory.  So how many homes are for sale today?

Upland has 127 total homes for sale – 101 standard, 2 REO and 24 short sales

Rancho Cucamonga has 189 homes for sale – 144 standard,12 REO and 33 short sales

Ontario has 116 total homes for sale – 76 standard, 15 REO and 35 short sales

Montclair has 31 total homes for sale – 17 standard, 5 REO and 9 short sales

Claremont has 54 total homes for sale – 52 standard, 2 REO and 0 short sales

Pomona has 104 total homes for sale – 76 standard, 16 REO and 12 short sales

Fontana has 179 total homes for sale – 113 standard, 12 REO and 54 short sales

Wow – A grand total of 800 homes for sale in these 7 cities!  Compared with three months ago when I looked at the numbers, there were 1091 and 3 months before that there were 1463 total homes.  We are down by 55% in the last 6 months!

 
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How Hot Can The Real Estate Market Get?

10 Aug

Is real estate in the Inland Empire teetering on the brink of another bubble?  From my recent experience in the last two weeks, you would think that Buyers have lost it.  Now don’t get me wrong, I love being a Buyer’s agent, that is my expertise.  But seeing a home on the market in Fontana for $325,000 receiving 25 offers and selling for $350,000, well that is something!  Some buyers are removing the appraisal contingency to make this work.  And this is just one example, it is happening in every neighborhood, in every price range.

Yes, interest rates are at an all-time historical low and rumors have it that they will go up next year after the election.  Who knows?  I heard Target sold out their inventory of crystal balls.

Ok, maybe it makes sense to overbid on a home that used to cost $450,000 a little over 5 years ago and can now be sold for $100,000 less.  If you can get a 3.5% fixed rate interest loan for 30 years on that, then you are set!

Real estate is supply and demand.  The other factor driving up home prices is the lack of available homes for sale.  If you have 10 homes in the best school district for sale and you have 100+ buyers wanting to buy it, well need I say more?

If you are in the market this summer, I think my best advice is to not get discouraged and be prepared with your loan approval in hand.

 

 
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The Buyer’s Love Letter

31 Jul

The Summer of 2012 is getting hotter every day in the real estate market!  Almost every home for sale today is experiencing multiple offers sometimes up to 20 offers in a week!  Interest rates are around 3.5% and inventory is in short supply.  Buyers know that if they don’t get in on this market, prices and interest rates will go up and they might not be able to afford their Dream Home!

Recently I wrote an offer on a Standard Sale for a very well qualified Buyer.  I already knew that there were multiple offers on the property.  2 offers were all cash, 3 were FHA offers and 2 were offers using conventional financing with 20% down payment.  So how did I get my offer accepted over all the others?

The Buyer’s Love Letter!

Sounds corny?  Well, it works!  I asked my Buyers to write a letter to the Seller describing who they are and why they wanted to purchase the Home.  In this case, the Buyer included pictures of themselves and their dog.  They explained how they fell in love with the house when they walked through the door.  They also went on to say that they were expecting in the Fall and could see themselves raising a family in the Home.

It turns out the Sellers had in mind their idea of perfect Buyers for their beautiful Home and guess what?  The Buyers matched the profile completely!

Now without the letter, the Sellers would have just seen another offer on their dining room table.  The Buyer’s Love Letter put a “face” on the offer.  We had our offer accepted right away and closed escrow with both parties feeling extremely good about the sale.

Real estate over the last 5 years has been a drag.  Smelly, trashed bank owned houses and “drive by only” short sales have made Buyers and Realtors crazy.  It’s about time that the market gets back to a more realistic place where there are “real” Sellers that care about their Home and neighborhood, not just the bottom line on a bank statement.

If you are a Buyer writing many offers on many houses, you just might want to use this technique.  Like I tell my Buyers, “There is a Home for everyone” but sometimes you need a little edge over the competition.

 

 
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What is a Final Walk Thru?

14 Jul

The final Walk Thru or final inspection occurs about 5 days before the close of escrow.  The Buyers and the Buyer’s agent conduct the walk thru and sometimes the Sellers and Seller’s agent are also in attendance.

The purpose of the final inspection is to satisfy the Buyers regarding the condition of the property.  The final inspection form that is signed by the Buyers and Sellers states:  Buyer and Seller understand and agree that unless otherwise agreed in the prior contractual agreement between Buyer and Seller, a final inspection is not a contingency of the purchase/sale.

Furthermore, the form states that the Buyer acknowledges that: (1) Property is in substantially the same condition as on the date of acceptance of the offer to purchase/sell and (2) Seller has completed any repairs, alterations, replacements or modifications as agreed to by Buyer and Seller.

The final inspection is also a great time for Buyers and Sellers to talk about things like: how to operate the sprinkler system, what day is trash picked up and what are the neighbors like?

 

 
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How Many Homes are For Sale in June 2012?

29 Jun

It’s the last business day of June 2012, time to look at where the Inland Empire is at in regards to housing inventory.  The cities of Rancho Cucamonga, Upland, Ontario, Pomona, Claremont, Fontana and Montclair have seen many sales in the last couple of months.  Interest rates are super low and Buyers are driving the streets and calling their agents in search of the right house.  A purchase now can pretty much assure a Buyer that they will be in the house by the time school starts.

Upland has 139 total homes for sale – 116 standard, 19 short sales and 4 REO

Rancho Cucamonga has 252 total homes for sale – 153 are standard, 82 short sales,17  REO.

Pomona has 137 homes for sale – 73 standard, 52 short sales and 12 REO.

Ontario has 164 homes for sale – 84 standard, 66 short sales and 14 REO.

Fontana has 260 homes for sale – 134 standard, 96 short sales and 30 REO.

Claremont has 100 homes for sale – 86 standard, 10 short sales and 4 REO.

Montclair has 39 homes for sale – 24 standard, 11 short sales and 4 REO.

That gives us a grand total of 1091 homes in 7 cities in the Inland Empire.  2 months ago there were 1463.  That is 372 fewer homes for sale!

The number that sticks out is the total REO (bank owned) homes for sale is only 85 in all 7 cities.  Going back to my January 19, 2012 post there were 268.  So in 5 months the bank owned homes inventory has shrunk!  What does that mean?  I don’t think the banks are holding on to them.  Maybe the REO Speedwagon (to quote a lender friend) is coming to an end?

 
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3 Secret Ways Buyers Can Get Their Offers Accepted

28 Jun

It’s a frustrating time for Buyers in today’s real estate market.  But here are 3 ways to get your offer accepted by a Seller.

1.  Offer more than the list price.  What?  That’s not a secret!  What I’m talking about here is not $10,000 more just try $500-1000 more.  It is worth a try and should make the Seller happy.  After all, your mortgage lender will send out an appraiser on your behalf and that small increase in price could be justified with today’s rising prices.

2.  Work with a well respected Buyer’s Agent and Mortgage lender.  When thinking of hiring a Buyer’s Agent, check with sites like www.Redfin.com to read reviews of local agents.  Interview several agents and don’t forget to “google” them.  An agent with a good reputation in the real estate community will be one that writes a strong offer and is known for closing escrows.   I have a local lender that I have used for about 10 years.  He is pro-active and will actually call the listing agent shortly after the offer is made and verify that the Buyer is well qualified and that he is available to answer any questions during the escrow process.  What a breath of fresh air when many times the lender cannot be reached.

3.  With all the short sales and bank owned homes on the market in recent years, it  has lead to a market place that was not personalized.  Offers have been emailed or faxed off to listing agents with little regard as to who the Buyer is.  With more standard Sellers coming in to the market, I think the time is back when a previously well used tool can be used again- the Buyer’s Love Letter.   I ask my Buyer to write a brief letter to the standard Seller telling them about who they are and why they want to buy their home.  If nothing else, it will usually produce a counter offer and maybe a sale!

 
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5 Top Reasons For Escrow to Fall Out

26 Jun

It is sad, but sometimes escrows fall apart.  This “falling out” can be caused by so many things.

1.  The Buyer has been told that they qualify for purchasing a home but the lender might have used overtime wages to put the Buyer in a higher price range or maybe the Buyer went out and bought a new car which affected their ability to purchase a house.  I encourage a Buyer to shop around for a loan.  That way you will know if you have the best lender to help you in this big ticket purchase.  Overall, your FICO score might be slightly affected but it will be an easy thing to explain.

2.  The house does not appraise.  Home prices are going up.  They are not skyrocketing like back in 2005 -06 but the “experts” say that home prices are up 2-3% over last year.  The comparable recent sales might not show the increase in home prices.  If the Buyer and Seller can’t agree to compromise on the price – then your escrow will fall out – fail.

3.  Short sale cannot be approved.  This can include anything from the seller not having a hardship to the lender cannot agree on the sale price.

4.  House in poor condition – the home inspection reveals a leaky roof or extensive termite work that needs to be done.  As a Buyer, you will need to pay for a home inspection in order to find out if the home is in poor condition but the $250-300 you pay is well worth it if you find out the house is a “money pit”.

5.   There is a lien on the house that the Seller thought was taken care of.  Sometimes there are liens on a house from a contractor that didn’t get paid for work done on the property.  Maybe there is an IRS lien from back income taxes that have not been paid.  If there is not sufficient equity in the home to pay off the liens, then escrow fails – falls out.

 

 
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Real Estate – Myths or Facts?

25 Jun

Myth or Fact?  A Seller will always choose an all cash offer over an FHA or conventional loan offer.

Myth – Many all cash offers now are low offers.  Investors are usually the all cash buyers and they are still looking for a “deal”.  In my opinion, an offer from a First Time FHA Buyer should be given first consideration.

Myth or Fact?  If my offer is in backup position, I will never get the house.

Myth – There are always reasons that an accepted offer can quickly go sour.  The appraisal might come in low, financing for the buyer might not work out or the first buyer can get cold feet.  Be happy to be in backup position, you might get a call from your agent with good news that the first buyer’s offer didn’t work out.

Myth or Fact?  I don’t want to look at short sale homes for sale – it will take forever to close escrow.

Myth – As of June 1st, there are new rules in place that require the lender(s) involved in a short sale to act promptly – within 30 days.  Of course, your agent should still be diligent in asking the right questions of the short sale listing agent such as:  How many loans on this home and who are the lenders, also does the seller have a hardship and have you started the short sale process?

Myth or Fact?  I have a letter of approval from a direct lender and my money is in the bank, will I be able to compete in the real estate market for a home?

Fact – You are in the best position because you are fully prepared – Congratulations!

 

 

 
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Home Sellers are “Having It Their Way”

14 Jun

June 14, 2012  If you are thinking of selling your home this summer – do it now!  The inventory is really low and many homes that are in top shape and priced right are selling within a couple of days in the Foothill communities of Rancho Cucamonga, Claremont, Upland, Fontana, Glendora, Covina and La Verne. That’s a good thing!  If you are a Seller.

Buyers are getting the message, no more hesitation.  If you like it, write an offer.  And make it a good one, Sellers don’t want to see low offers this summer.  This week has been incredible so far and its only Thursday.  Every home I have shown to my Buyers in the last three days has 4-5 offers on it and was just listed for only a day or two!  Wow – that’s a wake up call!

Timing is everything, they say.  The best prepared Buyers – the ones with an approved loan letter in their hand and their deposit and closing costs money in the bank are gobbling up the best homes on the market.  And why not?  In my lifetime, I don’t remember interest rates below 4%.  I do remember re-financing my first home in the early 80′s and being so overjoyed to bring my interest rate down from 18% to 13%!  We were ecstatic!

This movement in the real estate market this summer will no doubt help the economy but there are still the “Dark Shadows”  lurking in the background and putting a damper on all the fun.

You’ve heard about the Shadow Inventory.  That is referring to the homes that are in distress,  being in some phase of the foreclosure process.  A notice of default is filed on a home by the lender that is at least 90 days late on their mortgage payments. In Rancho Cucamonga, there are 291 notices of default on homes today.  111 is the number of notices of default on homes in the City of Gracious Living – Upland.  And yes, Claremont, there are 37 in your city.  Grand total = 439 homes in these 3 cities alone that are in some stage of the foreclosure process.  Only a fraction, maybe less than 10% are listed for sale.  So what about the rest of the almost 400 homes?

 
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