The FIGR’s are coming to town!

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Federated Indians Graton Rancheria

Federated Indians Graton Rancheria

 

 

 

 

 

 

In a recent Press Democrat article (http://www.pressdemocrat.com/article/20120402/ARTICLES/120409923/1350?Title=Work-on-Rohnert-Park-casino-could-start-this-summer) the Federated Indians of Graton Rancheria (FIGR) announced that work on  their plans to build a 200 room hotel and 3,000 slot machine Casino could begin as early as Summer 2012.  What, exactly, will this mean for Rohnert Park, a town of 40,000 people?

Technically, the casino will be built on property, owned by the Rancheria, OUTSIDE of the city limits of Rohnert Park.  The builders of the casino, Station Casinos from Las Vegas, delayed the start of the project after suffering financial difficulties (who hasn’t?) in the past few years.   Currently, Rohnert Park has about a 60%-65% vacancy rate in its’ commercial buildings.  Major companies, who called Rohnert Park home for years (State Farm Insurance, Cross Check) have vacated and moved on to more favorable rent districts, or gone out of business entirely.   The city has suffered financially from this, as they are collecting less tax revenue dollars.  Of course, home values follow this trend.

The completion of the Green Music Center at Sonoma State will bring world class performers to a city that has no upscale restaurants to feed them, one upper-mid level hotel to house them, and no other draw for Rohnert Park.   The completion of the casino will bring jobs to local, Sonoma County, Union workers in the construction phase, and about 2,400 jobs to staff the casino and hotel once construction is complete.   Can we say “recovery” in our own little neck of the woods??

Privacy and Value in Cotati- $485,000 for 1.8+/- acres of Horse Property!

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9130 Water Road

9130 Water Road

Privacy and value in Cotati.  This centrally located 1.8+/- acre ranch has two pastures with complete fencing for your horses, as well as smaller enclosures for goats and an aviary for chickens.  The home is complete with newer windows, beautiful laminate wood floors,  upgraded kitchen and baths with solid surface counter tops, upgraded septic and well systems, and more.     The home features 3 bedrooms, 2 bathrooms with 1320 square feet of living space.   Come home to your private oasis.
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The New Obama Plan- Mortgage Refinance

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Last night, Tuesday January 24, 2012, during President Obama’s State of the Union address, he announced a new initiative to help homeowners who are current on their mortgages refinance, expanding the HAFA (Home Affordable Refinance Program.)  This new program will help homeowners who’s loans are not guaranteed by Fannie Mae and Freddie Mac.  22.5% of all home loans are worth more than the assets they cover. Mortgage Refinancing

The program could cost as much as $10 billion and could help between 2 and 3 million borrowers.  Again, this program is ONLY for people CURRENT on their mortgage payments, and would not help the 4.1 million homeowners who are at least 30 days behind on their mortgage.  This program will be paid by taxing the banks (yea!).

Many commentators state that this program is only looking to help the symptoms, not the cause of the disease.  Of course, I have a different perspective.  Help as many people as you can!  Do we want to encourage homeowners to strategically default on their loans in order to get help refinancing or modifying in the first place?  Or, shall we head the problem off at the pass and prevent future defaults from deflating the housing market to a lower level? 

Short Sale Negotiation Fees- Should you Pay them??

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The California Department of Real Estate (DRE) has deemed it unacceptable for buyers to pay a “negotiation fee” or “transaction fee” when they are buying a home that is a short sale.  What this means is that some real estate agents use a third party to negotiate the terms of a short sale with the mortgage holding bank, and pass that cost onto the buyer as a requirement of their deal being accepted by the homeowner.  California Senate  Bill 458 (2011) became effective July 2011, prohibits short sale lenders from requiring the seller(s) to pay any additional compensation in exchange for the written consent for the short sale.   It does not state that the buyer is prohibited from being charged these fees, as long as there is full disclosure in the beginning of the transaction.

Consumer beware!  Do not let your REALTOR® charge you fees to negotiate a short sale, and be hesitant of writing an offer on a property that states that the buyer must pay the negotiator fee.  Not only is this unfair, but the buyer is not contracting with said third party, the seller and their REALTOR® are.  If you find a home that you absolutely must have, work to have that fee removed.

In addition, some agents are requiring the buyer to use their preferred title company and / or their preferred lender to get an acceptance on an offer.   I have had many buyers walk away from a deal because of these issues- it is easy for your REALTOR® to spot an unethical agent or bad deal a mile away!

Fannie Mae, Freddie Mac, and Now Chase and Citi postpone foreclosures

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In a recent press release, the banking industry has announced that they will be postponing filing Notices of Default and Foreclosing on homeowners during the holiday season. This is a move that Fannie and Freddie did last year- this year the larger banks are following suite. Is this a sign that the big mortgage banks are “getting it” and that they are realizing that there are actually people that live in these homes that they call assets on paper? Or, it is a PR move?

From my recent dealings negotiating short sales with banks, I have found that they ARE actually trying to help people stay in their homes, and understand how stressful a process short selling or foreclosure can be. Another question- I wonder how many of the bank employees, the ones who answer the phones or negotiate our short sales, have lost their homes? I hope they have employee benefit programs that prevent foreclosure!

Sonoma County Economic Update November 2011

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Economist Chris Thornberg of Beacon Economics spoke at the Hyatt in Santa Rosa last Friday morning to a room of 403 business leaders. He delivered some surprising news- the economy is recovering in Sonoma County.  While tourism dollars outpace Napa County in hotel stays, Sonoma County is lagging behind the state in job growth.

Some key points of his speech- forget the SMART Train and just widen the freeway.  Marin-ites do not do the reverse commute,  and the Train is mainly geared for Sonoma County residents who commute south for work.  Another angle to work on this would be to promote it as a method of transport for tourists north to Sonoma Wine Country.

Secondly, he states that it makes no financial sense to stay in your home if you are “underwater”- owing more than your home is worth.  In addition, he suggested that real estate in general is not a sound financial investment.  What?  Really?  Of course, I’m in real estate, and my perspective is skewed.  BUT- what other kind of investment gives you basically free money (interest rates are at 3.5% to 4% for purchase money loans) to participate?  Although there are no guarantees, the price of real estate right now in Sonoma County, and across the country, is so affordable that a positive return on your investment is inevitable.  The stock market, on the other hand, is questionable.

The Power of a Phone Call

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Internet is my best friend.  I’m on facebook more than three times a day.  I have a personal page, I have a business page, I have a youtube channel.   I’m logged in to the MLS for about 10 hours a day.  Information is everywhere, and information is key in today’s real estate market. 

Home Buyers can find information easily about properties, from many different websites.  Is everything on the Internet true and correct information?? NO it is not!  Many major websites “mine” data from our local MLS, but they don’t maintain the data.   Information can be there about a property that sold six months ago.    And Elvis is alive.

Which brings me to my point- there is so much that can be accomplished by just calling someone on the phone.  Listing agents can sometimes tell the buyer’s agent information verbally that they cannot put on the Internet or MLS.  Miscommunication can always be avoided by hearing what the other party has to say- even better, take someone out for coffee!  

In this day and age of easy access to information, it is always more beneficial to keep it simple, face to face.

2011 C.A.R. Legislative Day

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As part of North Bay Association of REALTORS® Emerging Leaders Program, I was invited to attend Legislative Day (s) last week in Sacramento.  The average REALTOR® has no idea what the area Directors participate in behind the scenes! 

The first day (officially Legislative Day) we had a big morning conference with REALTORS® from around the state, then were given the opportunity to meet directly with legislators from our area.  The next day, the Directors attend countless committee meetings, with topics ranging from membership, to form updates, to legal affairs and ethics.  This day is a major upload of information, and can be overwhelming.  The result is a REALTOR® who is 6 months ahead of your typical real estate agent- I was able to gain access to information and industry trends that are in the legislative process- and we all know how long that process takes!

Are there any short sales that sell?

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Chapter two with my first time home buyers.  We wrote an offer on a home that needs work.  Not a lot of work, but some.  Maybe $10,000 worth of work to replace a broken window, work on the bathroom, and check out a foundation crack.  Fannie Mae has a great product called a 203k (k= construction)  Streamline loan.    This loan provides up to $35,000 after the close of escrow for any necessary renovations to basically ensure that the home is FHA-eligible should it come onto the market again.  A home is FHA-eligible if it has an oven/ range, dishwasher, a solid roof with no leaks, functioning bathrooms, no foundation issues, etc.  A solid home. 

The listing agent on this particular home did not understand what a 203K loan is, or how it is handled during the escrow process.  The listing agent asked that we re-submit our offer with a conventional FHA loan, which we did.  The listing agent then told us that our offer was not being accepted because he thought the home would not pass the FHA appraisal process and that the seller had accepted another offer, after holding ours for a week.    The listing agent then called myself a week later because the other offer on the property did not go through, and wanted us to proceed with our FHA loan, given that his in-house lender would handle the loan, to ensure that everything went smoothly.

The long and short of it is YES a short sale can and does close.  My story is evidence that it is imperative that a homeowner who is considering a short sale (selling their home for less than is owed to the bank) consult with a qualified, credentialed REALTOR® who knows what all of the loan products are that they should be expecting from a buyer, how to negotiate with the seller’s bank (this is a whole other blog post)- and one who keeps the home owner’s best interest at heart- not their own.  If you’re a REALTOR® reading this, and you don’t know what a 203k loan is- go find out!

Not every lender in Sonoma County is an approved 203k lender- contact me directly and I will help you find the right mortgage broker for your needs.

Short sale to Foreclosure

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How long does it take for a home to become an REO (bank-owned property)?  It can be frustrating for many home buyers to discover that the dream home that they’ve been waiting six months for on a short sale can suddenly go to foreclosure.  Recently one of my clients made an offer on a home, only to discover that it had gone before our offer was submitted to the bank.

The issue that is rearing it’s ugly head is that banks (in general) do NOT have standards of practice when it comes to working with homeowners, mortgagees, and foreclosure proceedings.  Every mortgage bank has different procedures and time frames.  TYPICALLY, a bank will allow 3 months for the homeowner to participate in its short sale program (Citimortgage does this.) 

When a homeowner defaults (or is in immenent risk of default) they attempt to find a solution with their bank.  This could include loan modifications or refinances.  The sad truth is that about 3% of loan modifications work out for the benefit of the homeowner.  This is because often times the interest rate may be reduced by the bank, but not to an affordable level.  Odds are that if a homeowner cannot make the original payment, they won’t be able to afford the new one.  This process takes about three months.

After the loan modification doesn’t work, the homeowner is presented with the “short sale” option- selling their home for less than they owe the bank.  This can have income tax ramifications for the homeowner, and it is strongly recommended that one consult a tax attorney or accountant. 

When a short sale ages out of the system (typically about three months) the bank can then foreclose on the home, given they have filed a notice of default.  It could be bought at auction, or it will become an REO.  It will then take upwards of three to six months for the home to come back on the market as an REO- the foreclosure paperwork has to be filed and recorded with the county, the property has to get an appraisal or broker’s price opinion, and then is assigned to an asset management company who then lists it with a broker.