Why Not a Black Friday Real Estate Sale?

Retailers pin their hopes for the season, perhaps even for the year on one very special day: ‘Black Friday’ - the day after Thanksgiving and the biggest shopping day of the year. Could home sellers and Realtors learn something from this?

What if one day a year Realtors could work with their sellers to provide buyers a ‘sale day’ ala Black Friday? Here’s how it might work.

-A national campaign promotes ‘Green Wednesday’ (any color or day would work!) as the one day per year that buyers could save THOUSANDS of dollars on a home purchase.

-Real Estate agents work with the owners of their listed properties on a combination of reduced price/reduced commissions. Perhaps even the Title companies would agree to reduce their fees in order to enhance the volume of home sales that would be created on this day. Example: Sellers of homes that have been listed with little activity for months would reduce the price of the home for Green Wednesday by 2%. The listing real estate agent would agree to reduce their commission by ½ percent for this day, and any agent who writes an offer for buyers on this day would also agree to a ½ percent reduction. The Title company agrees to cut their fees to the home-seller to compensate for their price reduction.

In this way, a buyer purchasing a home in Butte County on Green Wednesday at the current median price of $279,000 could save $8,370! How does that stack up to how much YOU saved on Black Friday?

How many sales of ‘stagnant’ listings might be stimulated by this campaign?

Tough times call for creative solutions. If you’re looking for a creative solution to getting your home sold in today’s market please contact me.

How to Get Your Free Money to Buy a Home in Chico.

The U.S. government has finally come up with a plan that doesn’t involve too much red tape. You needn’t fill out a single form in advance of the process, all you need to do is 1. Make sure you meet the criteria 2. Find a house that fits within the very broad criteria and 3. Make sure you’ve completed the purchase by a certain date.

The criteria is – if you’ve never owned a home before or have not owned one within the last 3 years you qualify for $8,000 free. If you’ve owned a home for 5 of the last 8 years you qualify for $6,500 free. You may earn up to $125,000 individually or $225,000 if you will be buying as a couple.

The home can be any owner occupied residence of 1- 4 units, it can’t cost more than $800,000

You must have a contract to purchase the home prior to April 30, 2010 and you must complete the purchase prior to June 30, 2010.

Once you’ve purchased your home according to the above guidelines you will request the appropriate tax credit amount on your 2009 or 2010 tax return. If you don’t owe any taxes you will receive a check for the amount of the credit. If you owe taxes the amount of the credit will offset what you owe and the difference will be sent to you.

Soooo…claim your part of this pile of money! Contact me for more information on the tax credits (and be sure to run any scenario by your tax adviser or CPA). The funnest part is finding the home that will allow you to apply your credit. And…Chico area home prices are at their lowest in years! I’d welcome the opportunity to assist you in finding the ideal home before the deadline.

Things to be Thankful for II

It’s all perspective…if you own property, or if you’re thinking about owning property here are some items to consider giving thanks for:

If you’ve owned your own home since before 2000: give thanks for the nearly 120% appreciation you enjoyed before 2006 which means you’re home is still worth at LEAST 75% more than you paid for it.

If you purchased your home between 2000 - 2003, give thanks that it is likely still worth more than you paid for it.

If you purchased your home since 2003 and plan to live there for a long time be thankful that once we get through all of the foreclosures, appreciation on homes should return to the normal 2-4% per year (maybe more). Also be thankful for economic stimulus money that provides rebates and incentives for upgrading your home and making it more energy efficient.

If you purchased your home since 2003 and you would like to move, be happy for all of the programs that have been put into place to help you – loan modifications, existing home buyer tax credits and more. Although the home you’re selling is worth less, the home you’re buying is a lot cheaper too !

If you’re thinking of buying a home, be thankful that homes are much more affordable than they were 2 – 5 years ago, and for the $8,000 first time buyer home credit being extended to April 30, 2010.

Most of all, be thankful for family, good health and freedom.

Chico Home Sales Slow? Here’s the Reality.

For some time now the ‘word-on-the-street’ has been that Chico homes are not selling, and that they’re selling for ‘pennies-on-the-dollar’. Let’s separate that myth from the reality…

REALITY: Homes in certain price ranges are experiencing longer marketing time and are undergoing greater discounts off asking price than others. For instance, the median number of ‘days on the market’ to date in 2009 was just 27 days for homes in the $200,000-$250,000 range. In the $400,000 - $500,000 range they were nearly three times as long at 76 days. High end homes have seen price reductions of up to $95,000 in order to sell.

REALITY: Homes in the ‘entry-level’ or ‘first time buyer’ price range of app. $275,000 and less are experiencing brisk sales, here are some examples:

184 Pauletah Place sold in 3 days for $6,000 over the $208,000 asking price.
2621 Swallow Tail Way sold in 2 days for $3000 over $207,200 asking price.
206 Rochester sold in 1 day at the asking price of $223,000.

REALITY: Homes in all price ranges, if they are priced in accordance with what comparably appointed homes are selling for in the area AND if they are easy to show and in very good condition are selling quickly. Here are some higher priced 2009 sales:

3356 Summit Ridge Terrace sold in 9 days for $1250 over the $557,750 asking price.
10306 Fimple sold in 8 days at the asking price of $849,000.
824 Whispering Winds sold in 6 days for the $600,000 asking price.

So...home sales slow? Not necessarily...there are definitely buyers out there for homes that show well and are priced right!

Chico Housing at Most Affordable Level in Years!

“Nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The HOI showed that 70.1% of all new and existing homes sold in the third quarter of 2009 were affordable to families earning the national median income of $64,000, down slightly from a near-record 72.3% during the previous quarter and up from 56.1% during the third quarter of 2008.” This according to RISMEDIA

In the Chico Area, the median price for a single family home purchased in the month of November became app. $46,000 more affordable, down from a high of $325,000 in November 2006 to the current month-to-date median of $279,000.

What does this mean in terms of monthly payments? At $325,000 a buyer obtaining an FHA loan with $9750 (3%) down at 5% interest had monthly principal and interest (P&I) payments of $1697.50. Today’s buyer at $279,000 can put down $1380 less and end up with payments of only $1452.80 on the same loan, a savings of $244 per month!
Click this Link for a look at what you can buy at the median price of $279,000 in the Chico Area today.

Things to be Thankful For (Real Estate Version)…

This just in from RISMEDIA: Lawrence Yun, chief economist for the National Association of Realtors (NAR) says the housing market and the economy are headed for a sustainable recovery “Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” he said. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”

Here’s an example of how the first-time buyer credit is working in Chico:

I’m currently working with a first-time buyer who is looking for a home in the $190,000 price range. This buyer is getting an FHA loan which requires a 3% down payment (app. $5700). The buyer will be borrowing the down payment money short-term from a family member. When the buyer receives the $8,000 tax credit money in the spring the buyer will be able to pay back her family member AND have app. $2300 left over for furnishings!

Already a home-owner but wanting to change neighborhoods? Be Thankful for the new $6500 tax credit for existing homeowners wanting to purchase a replacement property. More information at Tax Credit Details.

Ask Not What You Can do For Your Realtor…

...Ask what your Realtor can do for you! Answer: calREDD

The Chico Association of Realtors unveiled their new Property Search program for agents ‘calREDD’ at an introductory training meeting yesterday at the Chico Elks Lodge. So how you ask does that help you?

Speed: the system appears so intuitive to use your agent can navigate it quickly to seek out the properties or data you want instantly.

Connectivity: The automated email updates are easy to set-up so that you receive news of hot properties as soon as they hit the market. For sellers it means that news of your home for sale is automatically emailed to waiting buyers searching for a home similar to yours.

Efficient: many new ways to seek out properties like a variety of map search options and customizable amenities searches.

Expanded Range: The calREDD system is built with the long-term goal of allowing access to property listing data from the entire state of California. Want to know what your mom’s house is worth in San Diego? Your Chico agent can now access the comps for her neighborhood within moments!

Like to see how it works? follow this link for a 16 minute demo video!

The switch-over to this system is still weeks away, plenty of time for Chico area agents to become familiar with all of the new features. I look forward to putting calREDD to work for you!

Chico Foreclosures: Looking Ahead

Will there be more pre-foreclosures and REO’s in the coming months, or fewer? Here are some indicators to ponder…

According to the credit reporting agency TransUnion (as reported in the 11/17 Enterprise Record) 6.25 % of U.S. mortgages were past due 60 days + in the third quarter of 2009, which is up 58% from one year prior when the percentage was 3.96. The 60+ late category is a good clue that a borrower is headed towards default.

Another consideration is seasonal buying patterns. The typical scenario in Butte County is a winter slow-down in home purchases. As home sales slow, inventory goes up, prices nudge down and distressed properties become more distressed!

These factors suggest that for the next few months anyway the availability of short-sale and bank-owned properties will continue to grow.

Although this is a prolonging of the dark cloud of distressed properties, for buyers there is the silver lining of lower prices and higher inventory which create an even better buying environment for home-seekers and investors. So if buyers are watching market conditions they’ll know that this winter is a great time to buy.

Click these links for a list of all short-sale and REO properties currently for sale in the Chico Multiple Listing Service.

More Free Money* for Chico Homebuyers!

Okay, you already have 8,000 free dollars waiting for you in the form of the recently extended Federal First Time Home-buyer Tax Credit…where else can you wrangle a few more dollars to help you to buy your first home? If you live in the City limits of Chico here is an incredible opportunity to obtain interest free, payment free money!

City of Chico Mortgage Subsidy Program. The City is generously offering to loan you money to help with your down payment. The amount they’ll help you with depends in part on your income, low income buyers can borrow up to $70,000, moderate income buyers up to $30,000. You must be a first-time home-buyer, you must contribute at least $5,000 of your own money towards the purchase, the home must be located within a residential area within the City and it must be safe, sound and sanitary.

The coolest part is the repayment arrangement. The loan is classified as a ‘deferred payment loan’ – no (zero) monthly payments required! Interest on the amount borrowed accrues for the first 10 years. For each of the five years between year 11 and year 15 the city forgives 20 percent of the interest, meaning that after 15 years all you owe is the principal amount you borrowed, without ever having had to make a payment! The flip side is that you must remain living in that home for 15 years to get full interest forgiveness – if you sell within the first 10 years you’ll owe all principal AND all interest. The point is, you pay nothing until you sell (or otherwise leave this earth). For more information and specifics on the Chico Mortgage Subsidy Program visit the Mortgage Subsidy Program Web Page or call Sherry Morgado - Housing and Neighborhood Services Director (530) 879-6301

* my friend Anthony Watts conscientiously replied to my last post on this subject with "And who's paying for this - you and me. There IS NO FREE MONEY"... Especially if you don't get some of it Anthony!

The New Face of a Foreclosed Chico Home.

Foreclosures…REO’s…bank-owned properties… where are they and what do they look like?

The iconic image that comes to mind when you hear the term foreclosure is either the demonic banker driving the residents out of the home and into the snow or the boarded up home with chains across the door and notices posted all over. The first image is definitely an outdated scene from the last century and the second is only partially true.

Sometimes but not often - resentful homeowners will ‘trash’ the home before the bank takes it back, other times they will pull anything of value out of the home, like cabinets, dishwasher etc. Generally though, by the time the bank puts the property back up for sale they have (often by way of the real estate agent they are listing it with) fixed any major damages that occurred during the foreclosure.

Here are images of a couple of bank-owned properties currently on the market in Chico.

(continued from above) Another common misconception is that foreclosures only occur in depressed or low-priced neighborhoods. In fact, high-end home-owners have perhaps been hit the hardest recently as most of the current buyers are ‘first-timers’ and therefore purchasing homes in the starter-home price range, while more affluent buyers are biding their time waiting for the market to come back so they can sell their homes for a decent price before buying a replacement home. This can leave owners of more expensive homes high and dry for the present time, and those affected by job-losses or salary reductions are just as likely to have been foreclosed upon as the owners of lower priced homes.

Here are examples of higher priced bank-owned properties in the Chico area

(continued from above) Click this link for a look at all Current REO listings in the Chico Area . If this link is broken or, if you’d like more information on any home you see here, to set an appointment to take a look inside or for more information on financing please email me at greatscottwhatarealtor@msn.com or call (530) 321-5579

What’s the Deal With Foreclosures in the Chico Area?

As reported on KHSL Channel 12 on October 28, Chico has earned the dubious distinction of being named a ‘Foreclosure Hot-spot’ based on a reported 284 foreclosures in 2008. So what does that mean and what’s happening with these foreclosed properties?

Foreclosure is the process by which a lender attempts to either sell or take back a home, usually initiated after 3-6 months of missed payments. The first step in the process is a Notice of Default, where the borrower is notified of the lenders intent to foreclose. If the borrower doesn’t work things out with the lender a Notice of Trustee Sale is filed and posted, specifying a date that the property will be sold by the bank. Even at this late date homeowners may be able to work things out with the bank to avoid foreclosure (see your attorney!), but if not the home is sold at the county courthouse to the highest bidder. If there are no bidders or the highest bid is lower than the bank is willing to take, the bank itself claims title to the home and it then becomes what is known as an REO (Real Estate Owned).

Buying a foreclosed property does not disadvantage the previous home-owner, they gave up the property well before it became available for purchase as an REO. And buying a ‘short-sale’ property (buying it from the owner BEFORE it is foreclosed on for less than the bank is owed) in many cases is a relief to the current home-owner, who may be able to salvage some vestige of their credit if it is sold rather than being taken back.

Many short-sale or pre-foreclosure properties are listed for sale in the Chico Multiple Listing Service, please contact me if you’d like to receive automatic notification each time one is listed for sale. In many other cases, owners have already ‘given-up’ and conceded that the home will be foreclosed on when in fact they, the bank and a potential buyer may be able to benefit from a short-sale. I regularly receive lists of these unlisted pre-foreclosures that never show up on the multi-listing service, if you’re serious about finding an unlisted short-sale property please let me know.

Likewise with REO or bank-owned foreclosures. Many eventually hit the market, and are typically priced so competitively that they receive multiple offers. Savvy agents and buyers know that there is a ‘lag-time’ between the Foreclosure and the home being listed for sale when an offer may find favor with a bank before being exposed to the masses. Once again, please contact me if you have an interest in this process.

Some information for this article was found at http://www.biggerpockets.com/foreclosure-process.html

Home Buying Assistance for Veterans

In honor of our Veterans and Active Military on Veterans Day I’ve compiled some information on loans and incentives for U.S. Military personnel.

One of the most utilized services for Veterans is the VA Guaranteed Home Loan. The Veteran’s administration doesn’t make the loan, but guarantees the loan to the lender (bank etc.) you are borrowing from. The current guarantee is $417,000, which can buy a lot of house these days in Butte County! In addition to guaranteeing a loan for the purchase of an existing home, the VA also guarantees loans for the construction, remodel and weatherization of a home. Financing for condos and manufactured homes are also guaranteed (with certain restrictions).

Some other qualities of a VA backed loan include: requirement that new home builders provide a one-year warranty, assurance of structural repairs if needed within 4 years of the guarantee, no prepayment penalties and a requirement that certain loan and transaction costs and fees not be paid by the buyer. The greatest benefit for most VA buyers is the allowance for purchasers to get into the home with zero down-payment.

California Veterans receive some additional benefits via a Cal-Vet Home Loan which include: lower than market interest rates and down payment amounts. Cal-vet also provides home and loan protection plans that allow for a $500 deductable on flood, earthquake and mudslide claims as well as fire and hazard coverage.

Information for this article was found at Military.com, visit their site for information on all veteran’s benefits. For more information on how to get the most from your veteran status when buying a home in Butte County please contact me at (530) 321-5579

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(continued from above) p.s. Don’t forget that Applebee’s is offering free meals for Veterans today!

The Market for Bare Land in the Chico Area

Bare land lots and parcels were selling at premium prices in 2005 as move up buyers, cashing in on the appreciation of their current homes competed for the best cul-de-sac, oversized and view lots on which to build their dream homes.

At that time in-town residential lots, if you could find one, were selling for as much as $215,000 (Godman Ave.) and estate-sized view lots for $365,000 (Canyon Oaks). This 6 acre lot (see photo below), 15 minutes from town with beautiful views but no water, power or pavement sold for $120,000 cash. (continued below)

(continued from above) 2 acre lots in nearby Orland were selling for $200,000.

Flash forward to today and some great news for buyers – much greater selection and inventory is available with prices down a minimum of 25%-50% or more. In-town residential lots are currently being sold for $72,000-$106,000 and the highest price paid for a Canyon Oaks estate lot is $280,000.

That 6 acre lot 15 minutes from Chico that sold for $120,000 cash? The lot next door (continued below)