Buying an REO is like Having a Baby!

I've developed a new found respect for my first time buyers, especially when they've ventured into unknown territory and bought bank owned real estate while knowing nothing for sure about the Sacramento real estate market. These brave buyers will do well in the future when real estate values begin climbing!

I have realized how wonderful their courage is when I'm 39 weeks pregnant with baby girl not showing signs of wanting to meet the world yet! And as an expectant woman's mind dwells on the same question of "When?" over and over I created this list:

1. Making the decision is one thing - getting used to it is quite another. It's all you can think of for a few days. "Am I really going to buy a bank owned property?" "Are we really going to have a baby? Really, really?"

2. Chances are, over the long run, both cost about the same.

3. At no other time does trust that everything will always go well play such an important role...

4. ...until something inevitably goes awry. Not terribly so, just enough to make you shake in your boots.

5. The waiting. Oh, the waiting!

6. There is the absolute knowledge that you're the only one who has ever been through this and you counsel your friends of how hard it is.

7. You also hasten to add that you know it's going to be worth it.

8. They agree with you because they see tears forming in your eyes and don't want to hold you through a nervous breakdown.

9. When you're doing both, you hear the worst horror stories you can imagine. Really, this is one time you find out who your friends are!

And my personal favorite....
10. For a while, life comes to a complete standstill and seems to move at breakneck speed at the same time. And it's scary and exhilarating at the same time - like a roller coaster.

Historic Housing Bill Signed

The President this morning signed a historic housing bill "Housing and Economic Recovery Act of 2008." It is believed that this bill will help some 400,000 homeowners who cannot make their housing payments to be able to refinance their mortgages with FHA-backed loans. It will also permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.

"Real Estate Agents Don't Call Me Back!"

The other day I received a call from a client who is looking for a home - a personal referral - and her biggest complaint was that she had called a few places and the Realtors were not returning her calls. "I would have thought in this market they would be happy that customers are calling and return those calls," she said in an exasperated tone.

I guess that's what they mean by a buyer's market. No one does what you expect them to do. Realtors don't return phone calls and buyers who have loads of opportunities to buy homes dirt-cheap decide to wait it out.

A little bird told me recently however that parts of Sacramento are recovering. And the bird is getting ready to call the bottom of the Sacramento real estate market. This is a very mathematical and market research oriented "little bird" so I believe him. And we talked about what buyers will do when prices go up.

I know the answer. They'll start buying, stop bargaining. And pay exorbitantly more for a house than they would have had they bought it today. Do I sound cynical? I don't mean to. I'm awaiting the arrival of my little baby bean (due in two weeks now!) so I'm on semi-maternity leave anyway. A buyer's market is the perfect time to have a baby, I now realize.

Because (say it with me now) sellers sell in a seller's market, but buyers don't buy in a buyer's market.

Adding Value to Your Real Estate

If you're like the thousands (millions?) of people painting your homes just because it's summer (personally I paint in the winter) you might want to consider reading this article that appeared in MSN.

I have seen many people shy away from darker or more expressive colors when they perceive the room in question as "small." I remember as a child my parents always went with the boring pastels and whites because the rooms were too small.

But there's nothing wrong with trying something new. There are some interesting color choices listed here. And even if you can't quite tolerate the idea of having too saturated a color all over the walls of the room, consider an accent wall. If you pick the right color on the right wall, you might end up making the room seem bigger!

Foreclosure Crisis may lead to Necessary Changes

With so many homes being lost all over the country, it is time there are some changed made in the real estate industry, especially regarding lending.

A few good things proposed that might become a reality in the future:

1. Lenders will require proof of income if the borrower's credit isn't good. Also money for taxes and insurance will need to be set aside.

2. Prepayment penalties are banned if the payment changes in the first four years. (I would like to see prepayment penalties go away completely. It is a ridiculous clause anyway.)

3. The borrower must be able to repay the home loan based on house's value alone. This one is a little confusing to me because it seems like this condition is already present, which is why we have appraisals. No one can guarantee the future value of a home, and it seems that's the desire here.

We seem to be moving in the right direction - just very, very slowly.

Foreclosures Down 3% in June

RealtyTrac has said that foreclosures are down 3% nationwide in the month of June over last month, but higher than last year. Although we might not have gotten over all the foreclosures yet, this is a good time to remember that the real estate market will eventually absorb all this excess inventory and at that point prices will begin to rise. So if you're on the fence wondering about whether you should jump in, the answer is... YES!

Read the entire story here.

Sacramento Condo Market

105 condos sold in the month of June in Sacramento county, down from May; prices fell from May's high of $153,000 to $135,000 in June.

Active inventory was down slightly to 565 from last month's 622. 130 condos went pending, again not as good as June.

I guess May was the month for condos and June was the month for single family residences!

Have a good weekend!

Sacramento Market Update for June: Single Family Residences

I guess I stand corrected: it isn't exciting out there this month in real estate. Which makes it perfect for all you home buyers out there, but this market update doesn't promise to change anything. :(

Median price fell to $220,000 from May's $230,000. Days on market stayed pretty much the same at 50. 1866 single family residences sold in the month of June and 2074 homes went pending.

1241 more homes came on the market in the month of June. We have a total of 8157 homes for sale. Inventory is lower than May at 4.6 months.

The silver lining you've come to expect? Sales were up 17% month to month over May!

Saturday: condo market.

Sacramento Area Real Estate Market Updates Coming!

Watch for them beginning tomorrow. I have a feeling they should be exciting. Usually by the time everyone is bored with real estate is the time they get pretty interesting - not scared, just bored, which seems to be the mood of Sacramento real estate.

So come back tomorrow. We have single family residences, condos and maybe even some other area-specific updates!

Landlords: Good Time to Schedule Inspections

I know, I know... everyone is tired from the 4th of July weekend of having fun - but when it comes to real estate you have to give up on some of that and get some work done.

Summer (especially July and August) is a good time to schedule inspections in your rentals. Just let your tenants know beforehand. Give them plenty of notice, so they don't feel invaded. Remember the idea is not to tell them how to live, just to ensure that the house you have rented to them is still in pretty decent shape and there has not been any extensive damage, minus normal wear and tear.

Why do I say July is a good month?
1. If you do see damage beyond control, you can give them a 30 day notice (provided they are on month to month) and start showing the home to other prospective tenants.
2. If you need work done, summer is a good season to get it done.
3. Most damage seems to done in the summer with sprinklers and on the exterior of the property.
4. Summer is also a great time to get new tenants. Once you hit the holidays, most people want to stay put. July gives you a good time to assess your tenants and see if they are going to be there for the long term.

So schedule your property inspections! You'll be glad you did.

Happy 4th of July!

Beware the Lawn Police

If you own a house in the city of Sacramento and are not maintaining the lawn enough to let it live, you might be in for a nasty surprise soon. According to an article in the Sacramento Bee today, in spite of the drought declared on June 4th, you could face a code violation citation if the lawn in front of your home is not properly maintained. Of course, we are not talking pristine conditions and a few brown patches shouldn't bother anyone, but if you are letting the lawn die, you would be violating city code section 17.68.010, which states that front yards "shall be irrigated, landscaped and maintained."

Read the entire story here.