Shirley Kistler's Real Estate Blog: Serving your Real Estate Needs in Sacramento, Placer and El Dorado Counties

CoreLogic and Fair Isaac Corp known as FICO, recently announced a collaboration that will result in a separate score that will be available to mortgage lenders and incorporates information that will include payday loans, evictions and child support payments.  In the future, information on the status of utility, rent and cell phone payments may also be included. 

Separately, last month, the Experian, Equifax and TransUnion, began providing estimates of consumer income as a credit report option.  And, earlier this year, Experian began including data on on-time rental payments in its reporting. 

This new information could either help some potential homeowner’s to obtain a loan or could be detrimental to those who are on the board of qualifying for a loan. 

The CoreLogic – FICO partnership won’t result in a credit score that will rule out a borrower for a mortgage backed by Fannie Mae, Freddie Mac or the FHA, which together own or guarantee at least 90 percent of the mortgages being written.    That’s because the Experian, Equifax and TransUnion “tri-merge” report required for such a loan does not rely on CoreLogic data.  But it could mean either more or fewer mortgage fees or a higher or lower interest rate charged by lenders that in today’s cautionary lending environment have heartily adopted risk-based pricing.

American Home Shield recently published the following tips when selling a home: 

1. Add a fresh coat of paint. At about $30 a gallon, paint is one of the least expensive ways to spruce up your living space. Add paint in neutral, earth-tone colors to bring out the best in each room.
2. Explore energy updates. Evaluate your home’s energy efficiency by going to the U.S. Department of Energy website. There, you can get tips to make improvements that sellers will appreciate.
3. Fix minor plumbing and electrical problems. It’s worth your while to take care of these problems before a potential buyer uncovers them during a home inspection.
4. Add storage. Lack of closet space can be a deal breaker for some buyers. Adding a DIY wire or laminate system to all closets will give them the appearance of being more spacious and organized.
5. Let light in. Ditch dark and heavy drapes for simple wood blinds and/or upholstered cornices. Update or add lighting fixtures — wall lights, lamps, ceiling fans with lights — to give the rooms a bright, more updated look.
6. Give kitchen appliances a facelift. Mismatched appliances can make a kitchen look outdated — but that doesn’t mean you need to replace them. Many appliances can be updated with new doors or face panels.
7. Don’t neglect the bathroom. Simple fixes can make a bathroom look more modern in no time. Get a new shower curtain, switch out the old toilet seat with a new one and replace drab or damaged flooring with vinyl tiles.
8. Update your front door. It’s the first part of your house that potential homebuyers see. Give it a fresh cost of paint and consider switching out your current lock-and-handle set for a sturdy, more modern piece of hardware.
9. Power up. Rent a power washer — it’s less expensive than hiring someone to do it — and thoroughly clean your house’s exterior.
10. Curb appeal. When it comes to your yard, definitely sweat the small stuff. Clean up clutter and have it hauled away or store it in the shed. Get rid of weeds and add some in-season plants and flowers to your walkway or in pots on your front porch. Make sure to mow your lawn as needed — potential homebuyers frequently drive by unannounced.

If you are in the market to purchase a new home and it happens to be a Bank Owned Property/Real Estate Owned, here are a few tips to help you with your purchase.

1)  Be prepared to be pre-approved by the bank‘s own representative.  The bank wants to make sure that they feel you can qualify for the loan as well as your own lender.  You are not obligated to use the bank’s lender, they just want to be assured that there won’t be any approval issues down the road.  The market is moving quick lately, so this is not something you should put off.  Be proactive and ask your Realtor who you need to get pre-approval from.  Usually there is only one lender and they usually do the approvals in the order they were requested. 

2)  Make sure to get a whole house inspection by a licensed home inspector.  If any issues show up in the HVAC, make sure to contact a reputable heating and air conditioning company to inspect.

3)  For added reassurance pay for a pest inspection to make sure you can live with any necessary repairs in the future.

4)   Your Realtor can order a roof  inspection (usually free of charge) from a reputable Roofer so that you have a report on the overall condition of the roof.

5)  Ask for a Home Warranty from the Bank when writing your offer.   Even if the Bank will not pay, I would recommend purchasing it for at least a year since no one knows the history of the home.

There are many unknowns when purchasing a bank owned property so make sure to do any and all inspections necessary to help make you aware of the overall condition of the home.  

Banks do not know the history of the home; therefore, it is up to you to investigate the home before purchasing.

Tuesday, Sept. 20, 2011 Released by California Association of Realtors

View a video of C.A.R. Vice President and Chief Economist Leslie Appleton-Young discussing the 2012 Housing Market Forecast.

SAN JOSE (Sept. 20) – California home sales and median price are predicted to improve only slightly in 2012, as the continuation of the tepid economic recovery, uncertainty about the future, and funding challenges for residential mortgages are expected to keep the market moving sideways, with little foreseeable momentum in either direction, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2012 California Housing Market Forecast” released today. 

The forecast for California home sales next year is for a slight 1 percent increase to 496,200 units, following essentially flat sales of 491,100 homes this year compared to the 491,500 homes sold in 2010.

“Despite the run of unforeseen global events in the first half of this year that slowed the overall economy, 2011 home sales are projected to essentially remain unchanged from last year,” said C.A.R. President Beth L. Peerce.  “Looking ahead, the fundamentals of the housing market – such as low mortgage rates, high housing affordability, and favorable home prices – are expected to continue, but at this point, a strong housing recovery will depend on consumer confidence, job creation, and the availability and cost of home loans.

“Discretionary sellers will play a larger role in next year’s housing market,” said Peerce.  “Those who held off selling in 2011 may list their homes in 2012, thereby improving the mix of homes for sale compared with the last few years.  Additionally, distressed sales will remain an important segment of the overall market as lenders continue to work through the foreclosure process.”

The California median home price will increase 1.7 percent in 2012 to $296,000 in 2012, according to the forecast.  Following a double-digit increase in the median price in 2010, the median home price will decrease a projected 4 percent in 2011 to $291,000.

“2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain in the forefront for all market participants,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.

“The most likely scenario is for the modest recovery to continue, and this should push sales up slightly next year by 1 percent and maintain levels that are significantly higher than those recorded during the depths of the housing downturn.

“The wild cards for 2012 are many, including federal, fiscal, monetary, and housing policies; the contentious political climate during an election year; and the strength of the U.S. economic recovery,” said Appleton-Young.

Appleton-Young will present an expanded forecast Wednesday afternoon during CALIFORNIA REALTOR® EXPO 2011 (http://expo.car.org/), running from Sept. 20-22 at the San Jose McEnery Convention Center in San Jose, Calif.  The trade show attracts nearly 6,500 attendees and is the largest state real estate trade show in the nation. 

Don’t miss “Why Lenders Can’t Lend:  The Economic Perspective” during CALIFORNIA REALTOR® EXPO 2011.  C.A.R. Vice President and Chief Economist Leslie Appleton-Young will moderate a panel of renowned economists as they delve into the front- and-center issue facing the market and REALTORS® next year.  The panel is scheduled to be held Thursday, Sept. 22, from 2 p.m. – 3:30 p.m. at the San Jose Convention Center.
2012 FORECAST FACT SHEET

f=forecast

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

One bright spot in the dismal real estate market is the rental market.  Demand is up and rents are rising.  That’s partly because those foreclosures have turned more than 4 million former homeowners into rents, but also because many other prospective homeowners, worried about losing their jobs or housing prices falling a lot further still, are reluctant to buy now. 

As with many investments, the best time to get in is when most others are sitting on the sidelines. 

Mortgage rates are at a 40 year low, and homes in many areas are ultra-cheap.  Meanwhile, demand for rentals has risen in more than 500 cities.  With this increase, it has allowed landlords to charge more.  Hotpads.com, a real estate research firm, reports that rents nationwide jumped 11.6% in 2010 to $1,320 a month. 

You’ll need that rental income to tide you over until home prices bounce back; in fact, the typical investor today plans to hold for 10 years, according to a survey by the National Association of Realtors.  If you can hang on that long, you have got a good shot at solid gains, especially if you are financing the home. 

Related articles

• Calling All Investors to the Rental Market (gloriawalters.wordpress.com)
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Nationwide, the US housing market remains deep in the doldrums and economists expect prices to fall another 5% to 10% in many places. 

When the rebound arrives, desirable zip codes will see price jumps first.  Real estate is always local.  

Here are a few things to start watching in your neighborhood: 

How fast are homes selling?  It is a good sign when price drops slowly down, inventory levels are actually a better gauge of where your market is headed.  Ask a Realtor to tell you the number of listings now on the market in your area and the number of homes sold over the past year.  An example would be that there are 100 listings and there were 240 sales last year, or an average of 20 per month.  That equals a five-month supply, which is considered stable.  More than six months and it’s a buyer’s market; less than three and sellers probably have the upper hand.

Compare your neighborhood’s price-to-rent ratio with what it was before the housing boom.  Calculate the price-to-rent ratio, or the price of a home divided by one year’s rent on a comparable one.  In general, it’s cheaper to buy when the price-to-rent ratio is below 15. 

A decrease in foreclosure filing is often an encouraging sign but not always the case depending on the processing delays in foreclosures.   Distressed owners tend to fall behind on lawn cutting and house painting long before a foreclosure.  If you see several places in disrepair, don’t expect your home value to rise soon. 

If you area is a prime location.  As buyers return, they naturally grab places with short commutes and better schools and amenities which will help increase the sales price.

Foreclosure filings rose in August, as more homeowners fell behind on their mortgage payments.  

Filing were up 7% compared to July, but were still 33% lower than a year ago. 

According to Realty Tract’s report, 228,098 homes in the US received some kind of foreclosure filing in August.  Foreclosure auctions and bank repossessions, which come later in the process, both fell slightly. 

The increased in default notices may signal that lenders are starting to finally push through foreclosure paperwork that was previously delayed by “robo-signing”. 

The good news is that bank repossessions have been falling.  Lenders repossessed 64,813 homes in August, a six-month low and a 37% decline after they hit a peak in September last year. 

Meanwhile, foreclosure auctions were scheduled for 84,405 homes, the lowest number in more than three years. 

Nevada, California and Arizona housing markets are the hardest hit by foreclosures. 

Information from CNNMoney.com

Related articles

• Foreclosure filings jump 7% in August from July Foreclosures fall over the year, but monthly figures signal trouble ahead (lonerangersilver.wordpress.com)
• Mortgage default warnings surged in August (sfgate.com)

One in 240 California housing units was in foreclosure in April 2011, according to Realty Trac, a statistic that places California foreclosures about 2.5 times higher than the national average.  Those statistics alone make the state a ripe market for loan modification scammers.

The Lawyer’s Committee is starting to file complaints against Nathanson Law Center and other alleged loan mod scammers.  The suit claims that the defendants lured desperate homeowners into paying up-front fees to secure them loan mods, and then did little or no work to follow up on their promised services.  While homeowners were offered 100% guarantees that their funds would be returned if a modification could not be obtained, the defendants later refused to turn their fees.  Many of the victims lost thousands of dollars – or worse, their homes. 

If you believe you have been the victim of a loan mod scam, you are encouraged to call (888) 995-HOPE or visit www.preventloanscams.org and click “Report a Scam!”  Victims are being represented free of charge.

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• Foreclosure Rescue Scams (arizonaconsumerlaw.wordpress.com)

Investing in real estate right now can be surprisingly profitable as rents are on the increase in many areas due to the number of people losing their homes to foreclosures or doing a Short Sale of their homes. 

Remember that owning rental property is time consuming, expensive, challenging, and many investors lose money. 

Mistake 1:  Confusing a cheap deal for a good deal – You can buy homes at a low price but that doesn’t mean you can rent them out.  They usually aren’t any more appealing to rents than they are to buyers.  Also less-desirable school districts may hamper renting your property. 

Mistake 2:  Overlooking key costs – Knowing potential rent is not enough.  You should also factor in closing costs 3-6%, costs to fix up the place and maintain it, and your holding costs. 

Mistake 3:  Forgetting that time is money – You lose money when your home is empty, whether you are trying to rent it, in between tenants or painting.  You may be better off accepting a lower rent than waiting for a higher-paying tenant. 

Mistake 4:  Assuming you will sit back and watch the rent roll in – You are a rent collector and sometimes tenants lose their jobs and stop paying rent.  Evicting them can take several weeks without rental income coming in. 

Mistake 5:  Underestimating repair costs – Carpet in rentals typically must be replaced every five years and you may have to repaint after every tenant.  The National Association of Residential Property Managers suggests setting aside six months of expenses so that you will have funds if a major repair is needed. 

Mistake 6:  Assuming that owning a rental is the same as owning a home – You might put up with flaws in a home that a renter won’t tolerate.  A property manager can handle most headaches, but you should expect to pay up to a month of rent for finding and screening tenants and up to 10% of the monthly rent for management fees.

Related articles

• For Investors, Renting To Own Is The Ultimate Win-Win (businessinsider.com)
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