Real Estate Terms of the Week

REO or Real Estate Owned is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank negative equity: the minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys’ fees. After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a realtor.

Buy Down is a method of lowering the interest rates on a mortgage, either temporarily or for the entire term of the loan. Often points are paid up front to make up the difference between the rate actually charged on the mortgage and the rate at which the buyer pays. Practically anyone — sellers, buyers, home builders, relatives, etc. — can buy down rates.

Fair Market Value is the hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.

Source:  GMAC

Real Estate Jokes

Congratulations on your new home:

A client bought a new home and the broker wanted to send flowers for the occasion.
They arrived at the home and the owner read the card; it said “Rest in Peace”. The owner was angry and called the florist to complain. After he had told the florist of the obvious mistake and how angry he was, the florist said. “Sir, I’m really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, “Congratulations on your new home”.

Competition

A broker was dismayed when a brand new real estate office much like his own opened up next door and erected a huge sign which read ‘BEST AGENTS.’ He was horrified when another competitor opened up on his right, and announced its arrival with an even larger sign, reading ‘LOWEST COMMISSIONS.’ The broker panicked, until he got an idea. He put the biggest sign of all over his own real estate office. It read: ‘MAIN ENTRANCE’

C.A.R. REPORTS ENTRY-LEVEL HOUSING AFFORDABILITY AT 33 PERCENT

The percentage of households that could afford to buy an entry-level home in California stood at 33 percent in the fourth quarter of 2007, compared with 25 percent for the same period a year ago, according C.A.R.’s First-time buyer Housing Affordability Index (FTB-HAI) released Tuesday.

The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $411,170 in California in the fourth quarter of 2007 was $82,200, based on an adjustable interest rate of 6.21 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,740 for the fourth quarter of 2007.

Source: C.A.R.

How economic stimulus addresses mortgage crisis

President Bush Wednesday signed off on the $168 billion stimulus packaged approved by Congress last week, which, in addition to tax rebates for millions of working Americans and business owners, includes a vital, but temporary increase in the conforming loan limit.  The economic stimulus package will allow the Federal Housing Administration, as well as Fannie Mae and Freddie Mac, to offer mortgages above the current conforming loan limit of $417,000 to as much as $729,750 in high-cost areas using a formula that considers an area’s median home price. The increase would only apply to loans originated between July 1, 2007 and Dec. 31, 2008. A host of details remain to be worked out, including how the median home price is established.

MAKING SENSE OF THE STORY FOR CONSUMERS

· It could be several months before the impact is felt in the mortgage markets. Wall Street is still working out whether investors will want to bundle securitized loans above $417,000 with loans below that level, or if they will invest in them separately.

· Rates for such loans might be higher because banks fear larger loans are riskier, but they’d still likely be lower than current jumbo rates.

· Even though the proposal does not apply to loans made before July 1, borrowers with older mortgages could refinance into new loans that would be sold to Fannie and Freddie, because those loans would be considered new loans.

To read the full story, click here.

10 Best Places for House Bargains

Daily Real Estate News  |   February 11, 2008
The best place to get a bargain on a home is an area where there is healthy job growth and more houses available than people to buy them.

These are markets “where you have high inventories but pliable borrowers, with lenders willing to deal,” says Anthony Sanders, a professor of finance at Arizona State University.

Forbes magazine went looking for markets where the damage from risky lending hasn’t been as dramatic as in some parts of the country and where employment growth will burn off an over-abundance of inventory quickly.

Here are what the magazine considers the 10 best cities for bargain house hunters.

1. Salt Lake City, Utah. Developers have gotten ahead of the demand, but the city is adding jobs more quickly than practically any place else in the country.

2. Raleigh, N.C. Another place where building got ahead of the curve, but the economy is expanding quickly.

3. Orlando, Fla. This part of the state had fewer speculators than Miami and Tampa, and it’s adding jobs faster than those cities as well.

4. Charlotte, N.C. The financial industry is moving here, adding jobs, but the inventory of unsold homes is still significant.

5. Phoenix. This city had a high foreclosure rate, but the economy is growing and people are still moving here in large numbers.

6. Seattle. The city’s port has profited from the weak dollar, but the housing price growth has slowed.

7. Las Vegas. This market was hit hard by foreclosures, but the growing economy makes the huge inventory less toxic than it is many places.

8. Jacksonville, Fla. The foreclosure rate is slower than the rest of the Florida cities, making the large inventory likely to improve.

9. Richmond, Va. There is only one foreclosure per 1,103 households here (compared to 1 in 33 in Detroit). Still, there are plenty of homes on the market.

10. Houston. Homes in Houston have long been a bargain. While there have been plenty of foreclosures, the population and the economy are expanding.

Source: Forbes, Matt Woolsey (02/07/08)

NAR: Urgency Needed on Loan Limit Increases

The NATIONAL ASSOCIATION OF REALTORS® has called on both the U.S. Department of Housing and Urban Development and the Office of Federal Housing Enterprise Oversight to promptly implement the higher conforming loan limits for Fannie Mae and Freddie Mac, as well as the increased Federal Housing Administration loan limits that Congress mandated and that President George W. Bush signed into law on Wednesday.

In a letter to HUD Secretary Alphonso Jackson and OFHEO Director James Lockhart, NAR notes that failing to move quickly to allow Fannie Mae, Freddie Mac, and the FHA to increase their loan limits will prolong the nation’s mortgage crisis and make a recovery in the housing market more difficult.

“The importance of immediately implementing the new limits cannot be overstated. Mortgage markets throughout the country need liquidity,” says NAR President Richard Gaylord. “Our research indicates that the increased FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 home owners to refinance and potentially keep their homes.”

In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market.

“While such an increase will not solve the full range of housing challenges, it will play an important role in improving the nation’s economy,” Gaylord says. “We do not have time to waste. Families need mortgage options whether they are purchasing or refinancing to keep their homes.”

A Big Impact

An economic impact study conducted by NAR in January estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated.

“These are real results and can have an immediate and sustainable impact for families across our country,” Gaylord says.

— REALTOR® Magazine Online

Downtown Pleasanton: February Events

Bankhead Theatre (Livermore) March Calendar

DATE	TIME	PERFORMANCE	VENUE
Sat, Mar 1, 2008	9:30AM	Science on Saturday #4	Bankhead Theater
Sat, Mar 1, 2008	11:15AM	Science on Saturday #4	Bankhead Theater
Sun, Mar 2, 2008	2:00PM	Aspen Santa Fe Ballet	Bankhead Theater
Fri, Mar 7, 2008	8:00PM	Duke Ellington Orchestra	Bankhead Theater
Sat, Mar 8, 2008	9:30AM	Science on Saturday #5	Bankhead Theater
Sat, Mar 8, 2008	11:15AM	Science on Saturday #5	Bankhead Theater
Sat, Mar 8, 2008	8:00PM	Carmina Burana	Bankhead Theater
Fri, Mar 14, 2008	8:00PM	Carmen	Bankhead Theater
Sat, Mar 15, 2008	8:00PM	Carmen	Bankhead Theater
Sun, Mar 16, 2008	2:00PM	Carmen	Bankhead Theater
Tue, Mar 18, 2008	7:00PM	Concert For Carnegie	Bankhead Theater
Fri, Mar 21, 2008	8:00PM	Carmen	Bankhead Theater
Sat, Mar 22, 2008	2:00PM	Carmen	Bankhead Theater
Sun, Mar 23, 2008	2:00PM	Carmen	Bankhead Theater
Fri, Mar 28, 2008	8:00PM	The Vagina Monologues	Bankhead Theater
Sat, Mar 29, 2008	2:00PM	The Vagina Monologues	Bankhead Theater
Sat, Mar 29, 2008	8:00PM	Romance, Rhyme and Remembrance	Bankhead Theater

Bankhead Theatre

February Events at the Alameda County Fairgrounds in Pleasanton

February 10, 2008
Brocade Wedding Fair
Presented by: Brocade Weddings, LLC.
Hours: 11 a.m. to 4 p.m.
Cost: $10 general admission; $8 parking.
Discount: $2 discount available from website (see below).
Summary: Northern California’s truly original bridal show. Meet top wedding professionals to plan your perfect wedding. Don’t miss the professionally-choreographed fashion presentation (12:30 & 2:30) showcasing the latest trends in bridal gowns. First 25 pre-registered brides get $20 Macy’s gift card. Many door prizes!
Contact: 510-825-6132.
Website: www.brocadeweddings.com

February 10, 2008
Northern California Exotic Bird and Supply Exposition
Presented by: Jim & Laurene Pappas
Hours: 9 a.m. to 4 p.m.
Cost: $6 adults; free to children under 12; $8 parking.
Summary: Exotic Bird & Pet Supply Expo – Wholesale prices to the public. Exotic birds, pets, reptiles and related pet supplies. Play stands, bird feed, feeders, cages, books, and a large selection of accessories.
Contact: 510-785-6647
Website: www.ncabird.com

February 15-17, 2008
Alameda County Spring Home & Garden Show
Presented by: Capital Showcase Inc.
Hours: 12 p.m. to 6 p.m. (Fri.); 10 a.m. to 7 p.m. (Sat.); 10 a.m. to 6 p.m. (Sun.).
Cost: $6 adults; free to children under 12; Seniors Fri only $2.00; $8 parking.
Discount: VIP tickets available from exhibiting companies. $2 discounts in various newspapers as well as Diablo Magazine and the website.
Summary: All the latest in home improvement and decor. Show prices are the best prices – shop, compare and save!
Contact: 1-800-222-9351.
Website: www.capitalshowcase.com

February 22 – 24, 2008
The Fly Fishing Show
Hours: 10 a.m. to 6 p.m. (Fri.); 9 a.m. to 5:30 p.m. (Sat.); 9 a.m. to 4:30 p.m. (Sun.).
Cost: $15 adults ($25 2-day pass, $34 3-day pass); $2 children under 12 ; $8 parking.
Summary: 100% Dedicated to Fly fishing. More gear, accessories, trips, and celebrities under on roof then any website or catalog. Celebrity and author talks. Tying & casting demos.
Contact: 814 443-3638.
Website: www.flyfishingshowwest.com

Why isn’t your home selling?

Whether it’s a buyers market or a sellers market, there’s always a reason a home is NOT selling. There are three major elements to consider. 1. Location. 2. Condition. 3. Price. If any of these three major areas are neglected, the market value  or the resale value of your home may be in question and it will most likely be very difficult to sell your home.

Let’s take a closer look at each of these elements. When it comes to location here are just a few things that may make a difference. Does the home sit near an airport, freeway or railroad tracks. What is the crime rate in the area? Or does your home sit on a quiet tree lined street, close to parks, recreation, schools and shopping? It’s been said before and I’ll say it again … location, location, location.

What is the condition of the home? Is it the best house on the block or the worst? Are there many things to be fixed, updated or replaced? Do you have a unique style (that you love) but may not appeal to the masses? These things can be deal breakers. If your home is a “Fixer Upper“, the third element is crucial (Next paragraph). As a professional Realtor and Home Stager, I’ve found if you neutralize the home, most can then see the potential. Don’t be afraid to hire a staging professional to help you make your home looks its absolute best. Staging works! Whether you’re currently living in your home or if it’s empty … Staging works! At the very least, get a “Staging Consultation”. You never know if the potential buyer is looking for a home to fix up and “put their stamp on” or if they are looking for move in ready… either way, I believe you’ll find a Staging Consultation to be most beneficial.

Be sure your home comes on the market at the right price. It’s important to look at comparable homes in your area. Add value for upgrades or features in your home and decrease value for elements that are less desirable. It’s difficult for most to place a value on their own home; after all, you purchased this home because you loved it … someone else must feel the same way … right? This is where having a good Realtor comes into play. A good Realtor, like myself, understands what buyers are looking for and what they typically do not want to see and will price your home at its best current value.

I’ve only mentioned a few things that can make a difference in whether or not your home sells quickly or at all. Please note, homes typically get the most traffic from buyers when it’s first listed, so be sure you’ve addressed any location issues, made any necessary adjustments to the condition of the home and that you have priced the home to sell!

Jill Denton

Professional Realtor, Interior Designer and Stager. Consultations available.

Changing Spaces ~ Hometown GMAC Real Estate