Winning The Bid With Multiple Offers

We are seeing multiple offers on most bank owned (REO) properties priced under $200,000. It seeems to me, that if there are so many offers on a listing, the listing agents must be pricing their listings too low. I'm sure they would disagree with me, but I've learned to counsel my buyers into making their "highest and best" bid when making offers and disregard the asking price. Most sales of REO's under $200K are selling well above the asking price. I always tell them, "don't get emotionally attached to real estate", and "to make your best offer", as if they will not get another chance and could lose out to another buyer. This is not just a salesman's pitch, this is the truth and after losing a couple of properties to higher bidders, buyers start to get the message. Also, "Cash is King" and there is a huge percentage of sales happening with "all cash" offers. Sellers will take a cash offer over another offer getting a loan about 90% of the time, sometimes even at a lower price, because there is a lot less chance of an escrow failing thru from a cash "as-is" sale.
I still see many buyers waiting to find a property before getting their loan pre-approval. In today's market buyers must be pre-approved before making the offer. Offers are not presented by many agents, if it is not fully documented. If it's a cash sale, you must provide "proof of funds". Proof of funds must be a copy of the buyers bank account showing funds in a liquid state, not in CD's. Pre-approval letters should be from a recognized lender, and should include DU, or "direct underwriter" approval. Escrows are taking longer, so plan on a minimum 45 days for the loan to process in your escrow period.
Buyers also need to be patient, as these REO sellers take their own sweet time to collect and review offers. They don't care that the contract says you want an answer in 3 days. The time they take is typically 5-10 working days for an answer to an offer. This is another reason why there are multiple offers. The amount of time it takes, gives the sellers a chance to collect offers and set the stage for a counteroffer of "make your highest and best offer", creating an auction like atmospheres.
In closing, the best advice I can give buyers is to be prepared for the action, and do a good inspection of the property as well as study the comparable sales before making an offer and getting caught up in the pressure of multiple offers.

Federal Tax Credit Extended into 2010

The federal tax credit for home buyers was signed into law by President Obama Friday, Nov. 6. The tax credit, which was set to expire Nov. 30, has been extended through April 30, 2010 with a 60-day extension if a binding contract is in place prior to deadline. It also was expanded to include existing homeowners who have lived in their primary residences for five consecutive years out of the last eight years.

First-time home buyers still may be eligible for a tax credit of up to $8,000, while existing homeowners may receive a credit of up to $6,500. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Fresno MLS Realtors Happy Again with Rapattoni MLS

I haven't heard one agent in Fresno say, "I wish we could have CalRedd MLS back". 99% of the agents are happy business is back to normal. CalRedd is a new software platform for a proposed statewide MLS system run by the California Association of Realtors (C.A.R.). The recent MLS changeover attempt in the Fresno area, had a negative impact on our Realtor memborship for 3 weeks and was literally a fiasco. We use the Rapattoni MLS system, and it works great. After 3 weeks of frustration with the calRedd system and all the bugs, the power of the membership stood up and said "NO" and we were brought back to our Rapattoni system. Why would they try fix something that already works good?

VA Financing is Frustrating for Vets in Today's Market!

We are experiencing tough times for veteran buyers seeking to buy homes utilizing their eligibility for a VA loan. Veterans can obtain 100% financing. This is a great benefit to the veterans, and I believe they should be the only ones allowed to use 100% financing. Bank owned foreclosures AKA (REO's), are a large part of the current inventory, and these type listings are generally not accepting VA financing, and rarely accepting FHA offers. I'm having the toughest time trying to place my verteran buyers into homes because the banks or asset managers will not entertain offers written with VA financing. The banks sell their REO inventory AS-IS, and mostly without paying for repairs, termite reports and certifications. Most of the listings need work as a result of foreclosure, and due to the huge inventory and huge losses, we are not seeing the banks invest money to make repairs. If banks could invest money to bring up their property to the proper standards, we could sell many more properties to VA and FHA buyers.

Fresno Rejects CalRedd MLS, Returns to Rapattoni

In a surprise move, the Fresno MLS has stopped using the new calRedd MLS system as of 9/1/09, after only 16 days. A majority of Realtor members were "challenged" and frustrated by the new format. We tried to work with the system for 16 days, and I must say calRedd support was making their best efforts to make fixes to the numerous bugs in the system. Myself, I was learning the calRedd system and felt confident I could get my work done, but there was still an endless number of deficiencies. At the rate we were going, it seemed like it would take a month longer to work out the bugs. Some agents felt they were going to be monetarily damaged because of the time involved beta testing, fixes and the learning curve of the calRedd system. The main issue that angered many agents, was the fact the system was released before it had been fully tested. They were leaving it up to the agents to identify problems, instead of beta testing it themselves. It was far from ready on their initial release. At this point, I have no idea what the future of calRedd MLS may be, but if we try this again, it better be a superior working model from the start.

Working with Fresno calRedd MLS Week 2

We are in our 2nd week working with the new calRedd system. We are the working guinea pig agents for the new statewide MLS system. I hope all the other cities that are considering this system for their MLS will pay tribute to the guinea pigs here in Fresno. We are the ones paying the dues here to help beta test and build the most powerful MLS in the world. At least that is what they are hoping for! At this point we are still nowhere near the features that the Rapattoni system had. I must admit, they are improving everyday and I am learning new tricks. I'm still not confident enough in the "auto prospecting" yet to go full steam ahead with my clients, but I can see that bugs are being fixed daily. Hopefully we will get more administrative controls for our agent profile pages. One peculiar thing also, is there are no hyperlinks anywhere on the pages, nor is there any way to verify emails have been sent or recieved by clients. I'm sure it's all in the works. Anyway, it seems the frustration level among agents is easing a bit as some of the search basics are learned by the agents to keep them working and selling properties.

Fresno MLS CalRedd System Starts off Badly

The much anticipated Fresno MLS system, "CalRedd" has started today. So far, I'm not impressed. There are many problems with the new system. We are having issues with the data, searching and property reports are inaccurate. This system affects some 4000 Realtors in the Fresno area, including the public data feeds to my website www.FresnoHomes.net. We expected problems, however the way that they initiated the system was not the best. There is no backup system to use today. They should have had a transition period where our old system, "Rappatoni" would work and we could migrate to the new "CalRedd" system. That is not the case, and basically our business is somewhat paralyzed until we can get the data correct.

Announcing Fresno MLS Changeover August 17, 2009

We are about to embark on a major change in our MLS system august 17th. We are going to a statewide system called "CalRedd". There will be now new listings added to the system between 8/13 to 8/17, so that they can transfer all existing data to the new system. As with most new software systems, there will be bugs to work out. We look forward to the technology changes that will help us in our business. As far as my website at www.FresnoHomes.net is concerned, I am working on some changes to help make it easier to distinguish the listing status of properties, between "active" and "pending" sale status. Also, I am trying to get the option ability to filter out the "short sales" from search results. These changes will result in less frustration among buyers browsing for listings. I spend a great deal of time each day, answering emails from buyers just to tell them that the listing already has an accepted offer.

2009 Fresno Real Estate Forecast

The Fresno County Economic Development Corp had a meeting and Joan Eaton of Guarantee Real Estate presented a report and graphs illustrating the current trends of our local market. Very interesting stats, showing the recent improving sales statistics, and outlook for the market in 2009. Go to: www.guarantee.com/edc to listen to the audio report and view the graphs that were presented.

FHA Loans Proving Difficult with Fresno REO listings

The good news is interest rates are low, and FHA has the lowest down payment and easiest qualifying ratios for homebuyers. The bad news, is that most of the inventory of low priced bank owned homes will not qualify for the FHA insured loans, or the sellers don't want to fix their property to the FHA standards. FHA has minimum property standards, and the popular financing is proving e to be less attractive to the banks when your negotiating an offer to purchase. They would rather sell to a buyer with conventional financing or even better yet "all cash". Let's face it "cash is king", and due to stricter property requirements, the sellers will take the path of least resistance. If the banks could invest a little bit in bringing their properties up to specs, I could sell a lot more properties, and for higher sale prices. Most people only have enough money to buy the property and don't have the extra cash to fix up the property after acquisition. Another alternative is an FHA rehab loan called the 203K, but unfortunately their aren't many local lenders that are using this particular loan and are not well versed in the process of this loan.

2009 Tax Credit For First Time Home Buyers

2009 Tax Credit For First Time Home Buyers

1. The NEW $8000 Tax Credit does NOT have to be repaid if the home buyer stays in the home for 3 years.
2. Escrow must close between Jaunuary 1 and December 1, 2009.
   
3. The buyer must be a First Time Homebuyer which is defined as, "someone who has not owned a home for the past 3 years."

Fresno Extreme Home Makeover

The TV hit show "Extreme Home Makeover" is in town filming the construction of a new home this week at 23 E. Robinson. I've been trying to witness the construction progress over the last couple days to no avail. The police and security have roadblocks and are letting in only a limited number of public looky-loos. The entire neighborhood is a zoo, with lots of people and traffic. Finally today, I was able to walk down the street to the construction site. The owner's story is great, because the owner is very deserving of the new house for their family. I took some pictures below and have some interesting info I dug up in the MLS and public records. The original house was 1213 SF, 3 BR 1.5 Baths and it was bought at the height of the market for $235,000 in Sept. 2006. It was in good overall conditon. They Extreme Home Makeover show demolished the entire house down, and are rebuilding a totally new 3200 SF home that is specifically designed for the handicapped owner. The entire construction of the house is done in about 4 days while the owner is sent on a vacation. When they return, they will film the owner seeing the home for the first time after the construction as the show's star shouts out "Move that Bus" The show will air sometime in March 2009

This is a picture from 2006 when she first bought the home for $235,000

These below are taken on day 2 of construction 1/12/2009