Reflections on the 2010 Fresno Real Estate Market

It's been a tough year for most people in the 2010 Fresno real estate market. As an agent, I've worked mostly with buyers, and a few past client sellers. My sales numbers and income are down a bit, largely due to the frustrating process of working with banks and their REO inventory or loan processing for buyers. With so many bank owned REO properties out there, I don't have much choice but to work with them. The frustration comes from the offer and answer process. They take so long to give an answer to an offer. I made one offer that took 28 days for a reply and we were bidding $10,000 above their asking price! Most of the time it took 2 weeks to get an answer, and this is clearly too long. Short sales are another bad scenario. I reluctantly worked one buyer in a short sale that eventually fell thru. The listing agent promised "Oh I can close my short sale listings in 60 days!" What a crock that was! After 120 days, the short sale lender told us to start over! so out of total frustration the buyers decided to find another property to buy. As an agent, I just don't care to work the short sales, unless they can change the way they do business, and speed up the process, and until then I will only list and sell traditional type sales or bank owned property sales. For buyers, I feel sorry for them because getting a new home loan is like getting "raked over the coals" with having to justify income and credit scores. They make it tough to qualify for any type loan anymore. I am truly thankful for my past clients and referrals. I know that I am truly blessed with the leads I get from the internet. I have very high ranking on Google for many relative keywords, and this continually drives traffic and prospective buyer and seller leads to my website at http://www.fresnohomes.net/. , and for this, I am very grateful. I've had 3 nice sales this month of December, and that's going to make for a good start in 2011. I wish everyone a Merry Christmas and Happy New Year.

Loan Guidelines for the "Funds to Close" Buyers Take Note!

 Loan underwriting guidelines today require full documentation. This means that buyers have to document the source of all funds that are used in buying a home.
Funds are needed for the down payment, closing costs, and prepaid items. Conventional loans require buyers to also have 2 months of house payments (called reserves) in the bank after the close of escrow. FHA does not require the 2 months reserves, but if the buyers have reserves it will add strength to the loan file for approval.
Buyers need to provide bank statements for the most recent 2 months. Even if buyers are not going to use one of their accounts for funds to close, it is a good idea to provide statements for the acount because it will add strength to the loan file for approval.
Buyers liquid assets are checking, savings, stocks and money market acounts. They are liquid because they can be accessed quickly to use for funds to close. Non liquid asets like retirement or pension accounts may be used, but acess to the funds can take time and there may be penalties involved for withdrawing funds.
Any large depositis will require a written explanation from the buyers. The loan underwriter wants to verify that the deposits are not the result of the buyers getting a loan that will require the buyers to have a monthly payment. Any large withdrawls will require a written explanation for the underwriter to verify the buyers do not have an ongoing financial obligation.
If the bank statements have another name with the buyers names, it will require a written statement from the other person that gives the permission to the buyers to use funds in the account.
If "gift funds" are used, FHA allows gift funds for all of the down payment, closing costs and prepaids. In a conventional loan, the buyers have to have 5% of their own funds and the rest can be gift funds. A gift letter has to be signed by the donor and the buyers, and the donor has to provide proof of funds available to give to the buyers.

Agent's Visual Inspection Helps Buyers in Purchase Negotiations

  When I'm showing a home to a prospective buyer, I try to always point out the defects I can visually see, such as a worn roof, stained ceilings, peeling paint, missing fixtures, stained carpet,  and the like. These observations help the buyer in determining how to offer on a property. Many times, if these items are addressed in the terms of an offer initially, they can be negotiated for actual repairs or repair credits in the final contract.  When it comes to the bank owned sellers (REO), some will negotiate repairs, and others insist on strictly an as-is sale.   

Too Late For Tax Credit but Market Remains Steady

It may be too late to qualify for the $8000 federal tax credit, but the market remains active. We are seeing the inventory increasing right now, as more listings are coming on the market. We are currently just over 2000 active listings in the Fresno/Clovis area for homes and condos. At the start of the year, there were about 1600 active listings. The activity remains in the first time buyer and the low end of the pricing. Homes under $200,000 are seeing the most activity. I received a call this week from a reporter at channel 24 news, and she wanted to interview a home buyer while I was showing them properties. The reporter was trying to paint a picture of a declining market, and the stats do show less sales from a year ago for the Fresno area, but I wouldn't totally agree with her.

Watch my TV interview news article from 5/25/10.

California won't tax forgiven home debt - Sacramento Business, Housing Market News | Sacramento Bee#mi_rss=State Politics

California won't tax forgiven home debt - Sacramento Business, Housing Market News | Sacramento Bee#mi_rss=State Politics

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Seven Housing Tax Laws to Pay Attention To

NewsGeni.us - Article - Seven Housing Tax Laws to Pay Attention To

Active Listing Inventory Remains Low For Fresno Home Buyers!

The reason it's hard to find a home sometimes is because the inventory is low. Today I found that for all of Fresno and Clovis, residential homes and condos for sale, there was a total of 1758 active listings. This number includes the "short sales", of which there was 409 short sales. So really, there are 1349 active listings that can be  bought today. Most buyers do not want to endure the effort it takes to buy a short sale and that is understandable. 1349 listings is a low number for all of Fresno and Clovis. Of the 1349 active listings, 362 of them are "bank owned" REO's.

Those Who Wait Will Pay Thousands More This Spring!

Here's why:

1. The deadline for the Home Buyer Tax Credit is April 30th, 2010. This is $8000 for a new homebuyer and $6500 for current homebuyers moving up.
2. While rates are still at historic lows, the Federal Reserve Board has repeated in many published reports that they will not remain there forever.
3. On April 5th, the cost of required up-front mortgage insurance (UPMIP) for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with an FHA loan, with a $7000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount, so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower by the up-front and monthly.
4. Later this spring, if FHA's new regulations go into effect, "seller concessions" will more than likely be reduced from 6% to 3%. The reduction in these "seller concessions"can increase the amount of cash a buyer wil be required to pay at closing.

When you combine the lower rate with the tax credit, you see that the homebuyers stand to gain between $13,500 and $16,000 on a home in the mid $200K's price range. That is a huge incentive for homebuyers to act now, while the incentives still exist.

$100,000 Price Range is Red Hot in 2010 Fresno Real Estate Market!

I just listed this house in Fresno for $99,800 and WOW! was I amazed at all the action I am receiving. After 3 days I have 7 offers, and most are well above the asking price. Located at 2973 E. Norwich, the home is 3 bedrooms, 2 Baths and in clean condition. I wish I had many more in this price range right now. I have notified all offerors to make their "highest and best" offer. We have set a deadline for friday 2/5/2010 at 10AM as the deadline for offers. After that, we will review all offers and be making a decision before the weekend. To see more information about this home visit http://www.fresnohomes.net/ and click on "Featured Listings" for complete details on this great buy.

Sell your Fresno Home Now While Inventory is Low!

The job market and the overall economy may be bad, but there are buyers out there buying and the inventory is low for available homes right now. I'm happy to be self employed and in the real estate business. This is a good time for the traditional sellers to come back into the market too. Yes there are a lot of short sales, but I'm not counting on those. Buyers are fed up trying to buy short sales. Bank owned sales are not too bad, but typically need a lot of work. What buyers want, is a regular type traditional seller with a clean home. I can sell these all day long right now.