Find out about Real Estate on the Monterey Peninsula

Ok, another exciting Super Bowl is over and it has me thinking about the housing market. We’re about to see what happens to the market without the first time homebuyer’s tax credit (that ends in April), without Fannie Mae and Freddie Mac buying mortgages on the Secondary Market (that ends in March) and the end of the bank’s stimulus money. Any guesses what’s going to happen to interest rates? I can promise you with absolute certainty that they will go up.

So the big question is, are you going to stay on the sidelines or jump into the game before prices start to climb and your buying power starts to erode by 10 to 20%?

Poor buyers. First the prices were too high, then the interest rates were to high. Finally stuff started to make financial sense, and then they ran into too many buyers, not enough inventory….it’s enough to drive people to drink!

Now that things have sort of “settled out”, we’re facing another dilemma. Banks are having major difficulties processing loans in a timely manner. New, stricter guidelines have made a loan officer’s job into a calendar nightmare.

With the clients that I have that trust me to recommend a lender, I’m moving them to Master’s Team Mortgage out of Folsom. They are one of the very few that have kept up with all the new regulations and know how to get an escrow closed in the required time frame.

You are familiar with “buyer beware”, right? Well that term is especially important when you look for properties to buy and rent on Craig’s List.

It seems criminals have discovered how easy it is to convince someone that they can uncover “incredible” deals on the internet. The latest scam I’ve been dealing with on Craig’s List works like this. I list a new property for sale and soon afterward that home appears on Craig’s List as a “rental”. The thieves simply take my photos and home address and advertise a terrific rent.

Of course renters get excited and many rush out to “drive by” the rental. They suddenly get confused by the presence of a “for sale” sign and that’s when I get the phone calls asking about the home.

It seems that people will get so desperate to grab that great deal, that when they follow up on the ad, they will be advised that many others are interested and if they want to be the one chosen, they need to:

Supply personal info like bank statements and other financial documents.

Or:

Quickly wire a deposit amount to hold the property.

Of course you’re wondering why people would do that, but let’s face it. Who wants to see that great deal get passed up? It’s sad, but it’s important to find out factual information these days. Such as, who is the legal owner of the property? Why would an owner attempt to rent or sell a home if they are out of the area? (oh, we just moved to Europe and didn’t have time to get a renter in there…..)

Make sure you don’t get taken in by the scammers.

Every now and then you have a quiet little experience that forces you to look at deeper truths. That happened to me this weekend when I took my wife and little daughters hiking in the Big Sur Wilderness.

My little girls are 5 and 8 and full of energy. It was a blast for them to skip up the trail and they loved hopping on rocks and balancing on tree branches as we crisscrossed back and forth several times over a small creek running towards the ocean.

Midway up the trail we came around a bend and saw a wondrous stack of 20 plus stones in the middle of the creek. My daughters were enthralled by the site. “What is that, Daddy?” I explained that someone had carefully created a work of natural art that would have taken a long time to arrange. “Cool! I like it”

We continued up the trail for another 30 minutes and rested before the return journey down the canyon. Several other people passed by and smiled at us, obviously enjoying their day in the Wilderness. A few looked weary, like a teenager that acted as if he was hiking against his will with his Dad.

We finally turned back and made our way down the canyon. A couple of times my daughter commented “I think the art is around the next corner”, only to be disappointed. Coming over a rise, my daughter’s voice rose in excitement. “I know this is the spot Daddy, I’m going to go look at it again”. She raced forward, only to stop with a confused look on her face. “I don’t see it”.

Sure enough, the stone tower was nowhere to be found. There was clear evidence why the tower was gone by looking at footprints in the wet sand leading up to the place where the stones had stood. The teenager had taken pleasure in kicking the tower down.

What had taken a long time to create had been destroyed in less than a second. For one person’s amusement, many people were deprived of it’s magic. Hoping my daughter didn’t see the clues I saw, I told her the tower must have fallen over by itself.

As we continued down, my mind drifted into thoughts on what had just happened and how it had affected me. The conclusion was simple. I realized I could be a creator or a destroyer. I could enrich other people’s lives or poison them for my own amusement.

I constantly had a choice to make. What path would I walk? How would I teach my daughters to chose the wisest path? Have you ever consciously made the choice to walk up to someone Else’s artwork and kick it down because you weren’t happy yourself?

As everyone who is interested in buying Real Estate seems to know, the first time home buyer tax credit incentive is set to expire Nov. 30th. You can already feel the tension as buyers get anxious about getting their offers accepted in time and closing escrow before the expiration date. Boy, I don’t envy the lenders and Title Officers that are going to get pushed to the wall at the end of November. Perhaps Congress will be kind enough to extend it before too many people panic and make silly decisions.

It happens most years, but it’s always a shock when you have buyers who are pre-approved and ready to go, but they can’t get funded. Let’s hope the Government gets a deep investor pool for this coming year. I have many buyers anxious to use that loan program to get into their first home.

I’ll confess, I don’t like to wait. I doubt many people do, but those that have the fortitude to do it will be the ones reaping the biggest reward. Buyers are in for lesson in patience with this market.

Many properties are inundated with multiple offers. It’s easy to panic and start writing offers on homes you don’t particularly like, just because you are desperate to get an acceptance. That’s a huge mistake. Feeling the pressure to “buy anything” will lead to disappointment and frustration.

It’s time to stay focused on the right type of properties, be prepared to view and write an offer on the type of homes you REALLY want to live in. It’s a time for true patience.

Why do people need hard deadlines to get stuff done? It’s just so amazing to me that I can find a property and get an accepted offer and then wait around for a couple of months to see if the buyer’s loan will get accepted. It’s only when the escrow’s about to get canceled when I finally start to see movement on the loan approval.

It’s been crazy for a while, but it’s getting even more insane. Two weeks ago we wrote an offer for a client in East Salinas. This is not the pretty part of town. The home was priced at 119,000. Our buyer offered 150,000. Not good enough. Why? Because 21 other offers were received on the same house and the only ones considered were the 5 all cash offers.

This week the same buyer picks another East Salinas house to make an offer. This one should be easy. It’s an REO, but the bank is having trouble kicking the owners out of the house, so it’s for sale “subject to inspection”, meaning whomever buys it will not be able to examine the interior until after the offer is accepted by the bank and the previous owners have been removed. That should keep most buyers away, right? Nope, 7 offers in 2 days! It’s not uncommon to talk with people that have written 20 plus offers and STILL don’t have a house. With the deadline coming up on December 1st for the first time home buyer credit, people are getting panicky about finding a home and closing escrow.

I want to tell you a story about a friend of mine named Rigo. I meet him at a seminar I hold in my office on how to buy REO properties. He had worked with other Real Estate Agents, had written offers and was not happy that he didn’t hear back on why his offers weren’t selected.

I educated him on the process, answered his questions and he made the decision to choose me to be his buyer’s agent. I was honored he picked me, but I was honest with him and explained that we would have to work hard to get him a property he would like. You see, Rigo is not a rich man. He works hard for a living and is like most first time home buyers. We were looking for a really good deal, but our competition was using stronger financing than us.

Because of that, we wrote many offers that were not accepted. The inventory started shrinking and even more buyers joined the hunt. Rigo was getting discouraged, but I continued to promise him that if he’d trust in me, I would find him the right place at the right time.

Well, that time just arrived. I got a tip on a new REO that had been on the market for a long time as a short sale. Agents sort of forgot about it and I told him we had a chance if he wanted it. We wrote the offer and negotiated the acceptance.

Rigo is ecstatic. He will tell you it was harder than he thought it would be. He’ll tell you he had started to give up hope. He’ll tell you he’s still nervous because it’s going through escrow. The main thing he’ll tell you is to persevere. He had faith in me and I’m so happy he did.