According to Sign On San Diego’s Roger Showley, the Urban Land Institute released its “Emerging Trends in Real Estate 2010” report last week.  On the report’s 9-point scale, San Diego’s real estate market is predicted to improve to 5, a whopping one tenth of a point above 2009’s ranking. What does this mean? Not much really, but it does mean that things certainly are not getting worse.

As we all know, San Diego’s residential sector took an enormous hit dropping from a median home price of $517,500 in 2005, to a much more realistic $325,000. An now, with the residential market coming around, so too will other real estate sectors. Showley reports that Jonathan Miller, a consultant for PricewaterhouseCoopers, who wrote the “Emerging Trends” report said “San Diego is improving because its housing market, having declined earlier than markets in most places, has “stabilized” and is thus setting the stage for nonresidential properties to recover.” “Setting the stage” doesn’t mean nonresidential properties WILL recover in 2010, but I don’t think anyone is going to complain about a stabilizing market that brings with it the hope of once again having flourishing real estate market, even if it is still a ways off. 

What else did the reports say?

“For 2010, the market is a pure hold’ meaning investors should retain their properties and not rush to buy or sell.”

“Shopping center owners should ‘hang on for dear life’ as retailers struggle with falling sales and many vacate their premises.”

“Office-building landlords should expect a game of ‘tenant musical chairs’ as lessees seek the best deals.”

“Hotels can’t get any worse but will ‘lead the commercial real estate industry in recovery’ as the economy improves.”

As for San Diego, even a miniscule glint of improvement on the real estate front is a sign of hope. Jonathon Miller adds, “the point is San Diego, unlike some other markets, has taken a tough hit here, but it appears to be stabilizing, and that’s better than other markets around the country.”  It’s funny to think that just a few years ago “appreciation” was the word that was being used. Appreciation was expected and relied upon, and taken for granted. And now, with our heads in our hands and hopefully a little wiser, appreciation is a distant memory. Now, the word “Stabilizing” holds a similar connotation that “appreciation” once had.

It is understandable that as a first-time home buyer you may not be aware of the intricacies that go with buying a new home.  Imagine the pressure that you’ll feel having to go through this process without any prior knowledge and with a deadline to beat too!  Usually, it takes 12 weeks to search for a home (you really have to be thorough especially when pickings are thin) and an additional 6o days to get the documents in order to close the sale.  With the November 30 deadline looming on the horizon, you only have 12 weeks to search for a home and close the sale and beat all the other first time home buyers who are rushing to take advantage of the $8,000 tax credit.

What can you do to get a jump on the process?  The best thing that you can do for yourself is to get an online account with your preferred realtor.  With an online account, you can specify which type of house you’re looking for, which location you prefer, what your budget is, whether you’re looking for a furnished or unfurnished and many other details.  Whenever your conditions are, you’ll most likely going to receive an email (usually), or phone call to notify you of any updates so that you can schedule a look-see. 

The next step is to prepare for negotiation.  What better way to get the upper hand than to arm yourself with updated information on prices, market sales, features and property values?  If you come prepared then the lender knows you mean business and aren’t likely to be fooled by smooth words.

Appraisals take time so you should make sure that the lender can satisfactorily deliver their appraisal on time.  Ask for a desk price if the property doesn’t appraise for the bid price.

Financing all boils down to the documents that serve as proof of income so you should start compiling your pay stubs, income tax statements and all that can help your cause.  The more complete your documents, the faster the approval rate.

The last thing that you can probably too is ask your insurance company to forward a cost estimate to your escrow company early.  The earlier they can accomplish this, the faster the escrow company can estimate your closing costs which you have to pay come closing time.

So you’ve finally found that diamond in the rough! After seeing 50+ foreclosed upon, bank owned homes, you found the home that you want and you are getting a great deal. You couldn’t be happier, and the bank will finally have that damn thing off its books. It’s a win-win. But something you may not know about that home you are about to buy, is all of the work that went in to getting it ready for your real estate agent to bring you on by to check it out. And despite what others might tell you, the unsung hero who is largely responsible for all of that work is the elusive and rare breed of employee: The Field Agent.

We all know that the banks in this country are inundated with properties that they were forced to take over and now have to try and sell. And like I said, there is a lot of work that goes in to the selling of bank owned homes. So much work that asset management companies get involved as well as local real estate companies. I work for one of those local real estate companies and I have remained curious by this system of what seemed to me to be an excessive allocation of work. So, in order to better understand what exactly goes in to getting a bank owned home ready for you to buy, I spent three days over the past two weeks, shadowing Team Aguilar’s field agent, Cory McGilvery as he made his rounds from property to property to learn a thing or two about a thing or two.

I felt like a real journalist, pen and paper in hand, as I met Cory for lunch before we embarked on his Wednesday route to visit 16 properties in the southeast part of San Diego. “Before we leave”, I said, “can you please tell me what the hell a field agent actually does?” I’ve known Cory for a few years, and had never fully figured out what it was he was doing every day. “You’ll see today.” He said with a sly grin, “and it will blow your mind.” I imagined visiting some property that was home to packs of wild abandoned dogs, or crack-heads who were too drugged up to realize they were being evicted, or a crazy old woman who answered the door with a shotgun pointed at my head. Of course, he was being completely sarcastic, but I couldn’t help letting my imagination run for a brief moment.

The work required from the time a bank forecloses on a property to the time it is sold to a new buyer is almost entirely grunt work.  And at the heart of the grunt work, is the field agent. The first day driving with Cory and visiting bank owned properties, I came to the conclusion that the job of the field agent was not dissimilar to shoveling shit. It gets you outside, it’s repetative, and sometimes when you’re not expecting it, you get blown away by something that smells…well… like shit. We went into one property towards the end of my first day with Cory to do an initial inspection, and I was appalled by what we saw. There were piles of partially eaten food all over the place. KFC buckets, microwavable burritos, melted popsicles, opened cans of corn, dirty dishes stacked high in the sink, refried beans sprayed against the wall, flies were swarming, and all of this combined to create a super-hero odor that could leap tall buildings and bring a mere mortal such as myself to my knees.

Despite the obvious downsides, Cory likes this job for the most part; it gets him out of the office, driving around, and offers ample opportunities for taking pictures (Cory’s true love is photography, and he’s damn good too). Our first 4 stops consisted of Cory literally just walking in the home, making sure no one was squatting there and then leaving. “Until we sell them, they need to be checked once a week.” And has he ever run across someone actually squatting on a property? “A couple of times. Usually they’re not there when I come by but we can tell someone has been in there and we just change the locks on them. But a couple of times, I’ve walked in on some people who are quick to yell at me for trespassing (even though I have a key), claiming that they’ve been renting there for months when just a week ago, there was nothing in the house.”

As we made our rounds around El Cajon, La Mesa, and Alpine, I finally got a grasp on how the whole process works. Here’s a rundown:

- Bank forecloses on a property
- Bank hires an asset management company to deal with it.
- Asset Management Company hires a local real estate company to sell the place.
- Local real estate company has a field agent who:

1. Visits the property once a week
2. Takes pictures of the home, and anything left behind. If there is over $300 of personal property left behind, the real estate company has to hold onto it, and publicly post the property in hopes the owners will come to claim them
3. If the owner is still living in the home, provide notice that they have 3 days to leave
4. If there is a renter, provide notice that they have 90 days to leave
5. Hires a company to clean the house
6. Provides and replenishes marketing materials and signs
7. Fields phone calls and inquiries from real estate agents regarding the property
8. Reports back to asset management company about each property each week

- The home gets sold, the local real estate company gets the commission, the asset management company gets a flat fee from the bank, and the bank gets the remaining funds from the sale.

Deal with all of that for 65 properties per week located all over San Diego and a few outside of San Diego, and you’ve got yourself a guy shoveling a ton of shit.

Stay tuned for the conclusion of The Life and Times of an REO Field Agent two part series when we meet with the Sherriff’s Department to give an eviction notice to a guy who took his free ride just a bit too far and pays the price.

There was a comment to the previous article earlier this week that mentioned she and her husband were planning on waiting about a year for home prices to drop even further before considering buying a home. Not a bad plan by any means considering the fact that many areas will indeed continue to drop in home prices. But it occurred to me that there may be other things one might consider before officially putting off buying a home for a year. For example, have you seen what mortgage rates are at these days? They’re absurdly low! So I thought I’d briefly discuss some things that I have been reading up on this week regarding the issue of whether to buy now or to wait.

For starters, I want to discuss home buying as opposed to refinancing because refinancing is a slightly different beast than buying a home; Mainly because it heavily involves the equity (or lack thereof) in your property. That being said, there is a different train of thought that goes with when to refinance and when to wait.  And so, without further ado……….

James Hagerty of the Wall Street Journal reported this morning that Jay Brinkman, chief economist of the Mortgage Bankers Association, said “rates on 30-year fixed rate mortgages for borrowers with strong credit scores are likely to be in the range of roughly 4.6% to 4.75% at least through the summer.” This dip in rates came after last Wednesday’s announcement by the fed that they were committed to buying an additional $750 billion in mortgage backed securities (in addition to the 500 billion already committed). So this begs the question: How long can rates possibly stay this low? Peter Thompson of Illinois Mortgage Rates and News wrote a great, in depth article on this and he goes into the three schools of thoughts on what will happen going forward:

1. “The Fed buying will push rates steadily lower, possibly into the mid to low 4s. This is the view you hear in the media.” He goes on to say, ” This may happen, but it will take a lot more than just the Fed buying to get rates this low, and with lenders still near capacity, they are keeping more of the profit for themselves instead of passing it along to consumers.”
2. “Rates will stay low, but closer to the range we are in now. This means rates will stay affordable longer, but may not go a lot lower.”
3. The law of unintended consequences kicks in and instead of rates dropping, fear of inflation and the devaluation of the dollar drives rates higher than they were before. There are a lot of inflation hawks out there, and I agree that down the road we are going to have to deal with inflation. But that is in the future.”

For #1 to happen, banks would need to start cranking out loans at a ridiculous rate, which most likely isn’t going to happen. And #3 may be in the cards, but not in the immediate future, so I, like Peter, think that #2 is the most likely result. So that’s good news for homebuyers looking to hold off buying for a little longer.

The bad news is, low rates don’t make getting the loans any easier. Banks have yet to loosen their grip on the lending guidelines that have been tightened almost to the point of strangulation after the sub-prime mortgage disaster. Only borrowers who can make sizable down payments, have plenty of assets, a steady job, and impeccable credit, are getting the loans at these low rates.

So even if you are waiting for a certain market to bottom out or mortgage rates to dip even further, it cannot hurt to look into the matters of financing now. That way, when you do wish to buy, you will know what you qualify for before looking to find that perfect home.

Who knows what to think about anything these days? It is hard to wrap one’s head around anything when so much is happening and none of it seems to be good. And so, when I learned that Stanford Kurland, the former president of Countrywide, had started a new mortgage company, my first reaction was, ohhhhhhhh boy, here we go again. I mean, there are a boat load of lawsuits underway against Countrywide, and some of them are accusing Kurland of being one of the main guys responsible for the irresponsible lending practices that dished out billions of dollars in risky home loans, which inevitably led to Countrywide’s demise, and left thousands of people risking foreclosure.  But then I learned what his new company was doing, and my initial thoughts towards the man and his company changed.

The Private National Mortgage Acceptance Company, or simply PennyMac, buys up delinquent home mortgages that the government took over from failed banks for a fraction of what they are worth, and get a piece of what they can collect. As an example, PennyMac would buy a delinquent $500,000 mortgage for say, $180,000 (of course, in reality they are buying many mortgages at once). When they buy these mortgages for pennies on the dollar, they can afford to restructure the loan with the homeowners, slashing the interest rates, keeping the owners in their homes and making payments. And PennyMac gets to keep a share of the money coming in from these mortgage payments, which otherwise might not have been made. So this is not only helping homeowners, but it is helping the government get back some (as opposed to none) of the money from the bad mortgages they bought up.

According to Eric Lipton in an article for the New York Times, PennyMac struck a deal with the FDIC (Federal Deposit Insurance Corporation), where “it paid $43.2 million for $560 million worth of mostly delinquent residential loans left over after the failure last year of the First National Bank of Nevada.” Lipton goes on to say that, “Under the initial terms of the FDIC deal, Penny Mac is entitled to keep 20 cents on every dollar it can collect, with the government receiving the rest. Eventually that will rise to 40 cents”. They’re doing to be doing real well. And some whom they have helped are doing well as a result also.

Lipton describes the Laverdes family had fallen three months behind on their mortgage after their furniture store began feeling the pressure of the economic crisis. They were “fearful that they might need to move their four children, three dogs and giant saltwater aquarium into a cramped apartment, leaving behind their dream home. But a PennyMac representative instead offered to cut the interest rate on their $590,000 loan to 3 percent from 7.25 percent, cutting their monthly payments nearly in half.” Wow, go delinquent for a couple months and get rewarded with a 3% interest rate! Must be nice.

So perhaps our country needs more companies like PennyMac right now. Take some of the burden off government and banks and struggling homeowners, and turn a pretty profit while they do it. Is it too much to hope that companies like this can help stabilize the housing market? Probably, but like I said, I don’t know what to think at this point, so any beacon of light in this dismal economy and I’m going to cheer it on.

By Andrew Brentan

Different Ways to Buy Foreclosures – you can buy foreclosures a number of different ways. Below are the 3 most common with some perspective on my experience with 30+ years in the real estate business.

Buying directly from the homeowner – You can purchase foreclosures directly from the homeowner prior to it going to sale and back to the bank to be sold as a “Bank Owned” property. I am not a fan of this option for one simple reason. Homeowners are being taken advantage of and deeding their homes over to crooks who promise to bring their mortgage payments current and never do anything. This is the option that all of the late night infomercials are always talking about. It’s unfortunate that when someone is in a difficult situation that these crooks come out of the woods to steal equity away and convince homeowners to deed the property to them. If they really did what they say they will do then great, but it’s too often I hear horror stories about homeowners that were taken advantage of. What typically happens is a number of different things, including renting out the home to collect rent payments for 6-12 months while never make any single mortgage payment. The end result in many of these scams is that homeowners are sold on the idea that they will avoid a foreclosure showing up on their credit. If you have equity in your home then you should try to sell it with a local real estate agent. Your lender will give you some time to sell the property if you show them you are making an effort to sell it.

Buying at a real estate auction – not a big fan! These homes that are being sold at auction are homes that didn’t sell via OPTION 3 of this article. They were listed with local real estate agents as “Bank Owned” homes and as a result of them not selling in a timely manner the bank turns them over to an auction company for sale. Would you go purchase a foreclosure amongst hundreds, if not thousands of other buyers when you could have purchased it a month earlier with no other competition?  Auctions are not my favorite, you are in a room with people that do not take the time to research the property and they are sold on this slogan. “Buy this previous valued home of $450,000 with a starting bid of $275,000!!!” I have news for you, take the time and go to one of these auctions and you will see that by the time it actually sells you really aren’t getting a good deal compared to the foreclosures available for sale in the local MLS.

Buying from a local Realtor – my favorite option maybe because I am a Realtor! :) No, it’s because it makes the most sense. You find a local real estate agent who specializes in selling bank owned real estate. I would recommend that you do a Google search for “bank owned real estate for sale CITY NAME” and you should come up with some options. Buying from a local real estate company will allow you time to do your inspections on the home you are buying; you will get a clear title with title insurance. If you purchase your home listed with a real estate company that is “Bank Owned” you do not have to worry about the title history because you will be provided with a title insurance policy when you close escrow. You will have typically a 30 day escrow which will allow you to purchase with financing.

Other things to understand about buying foreclosures – One big misconception is that you deal directly with the bank. Let me tell you that it doesn’t happen. Banks don’t sell real estate. They find local real estate agents who know the local market and pay them a commission to get the property sold. Don’t waste your time trying to work out a great deal directly with the bank or insist that your low offer at 50% of the listing price should be considered. Banks want to sell these foreclosures but they are not stupid.

Things to do after you purchase a foreclosure property – Get the locks changed as quickly as possible, many banks use the same key cut for all of their listings because they have so many vendors to deal with they have the locksmith re-key all of their foreclosures with the same cut key. You should really invest $100 to have your new home re-keyed.

If you would like any San Diego Foreclosure Information please feel free to contact us.

As all of you have heard the real estate markets are struggling in many areas of San Diego. This is due primarily to the other hot topic in the news: Sub-Prime Lending. Unfortunately many homeowners in the last few years have fallen victim to the frenzy in the lending market that encouraged homeowners to buy or refi using a loan that starts with a low rate and then, at the end of its initial two year period, begins adjusting. During the first five years of this frenzy rates were low and it didn’t matter when the loan reached that first adjustment. Today we are in a different Interest Rate market and many borrowers are finding that first adjustment is causing their payments to be out of their reach. This in turn is the reason why we are hearing so much about Foreclosures. It is unfortunate for many that are losing their homes, however the reality is that this also creates opportunity for many investors.

As many of you know I have spent years managing and disposing of foreclosed properties for banks and lenders. The number of available foreclosed homes is growing and the prices are dropping. During the last 7 years, many of you would call me and ask about buying a foreclosure and I would tell you that it was very rare to find a foreclosure in this market because there were so many buyers for every home that came on the market. This has changed and we now have growing lists of condos and single family homes.

Remember, as with any investment, the time to buy is when the market is Down and Sell when the market is up. You may remember the early 90’s when we saw a record decline in real estate prices in San Diego. Many of you also took advantage of that market and purchased property that we sold 5 years later at double and even triple what you paid for. While no one can predict the future, we can make decisions based on what we have seen in previous markets. We are heading into another similar market as the 90’s and if you have an interest in investing in this market this is the time to do it!

Real Estate California

With the sub-prime mortgage market taking a hit like it has in the early part of 2007, we have seen a large increase of distressed property. Major real estate markets have been effected. San Diego has seen some significant changes but not as bad as many other markets.

When you look at data in the San Diego area, the property that is selling is being sold at a fair market price. We are not seeing the fire sale we saw just a few months ago when your home would sell before you could put up a for sale sign. With mortgage rates increasing, allowing fewer people to afford to purchase and driving the demand down, it indirectly effects the family’s that have purchased a home thinking that they would be able to refinance into a lower payment after a few years. The increase in interest rates has increased the amount of property’s that will go into default.

REO property is the end result of a person loosing their home and the home going back to the bank to be sold. It becomes an REO property which stands for Real Estate Owned and now becomes the banks top priority to sell. Banks do not want to be in the real estate business and do not want to take back a property but unfortunately when all other avenues are exhausted the end result is foreclosure and the bank takes back the property so they can sell it.

REO property can be a great investment for investors and regular individuals looking to buy a home. It can also be a more complicated process to purchase a REO home but working with a experienced Real Estate Agent can help make the process fairly simple.

If you think that you may want to purchase REO or bank owned property and you are not sure where to start. Please call us today to discuss. We have a experienced team that works with many banks REO departments all over the country and we can help you find something depending on what your needs are. We have all of the San Diego Foreclosure Information you will need if you are looking to purchase foreclosures in San Diego County.

Carlos Aguilar

What is the first step to buying a home?

Finding out what you can afford is one of the fist steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses.

A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalificaiton, but it will be expected of you when you make an offer on a home.

Carlos Aguilar
858-793-2336
carlos@teamaguilar.com
San Diego Real Estate News

source of article,
http://www.teamaguilar.com/home-buying-articles-4-29.html