In our current market with its increased number of distressed properties—such as short sale, foreclosure, and REO (real estate owned or lender/bank owned) properties— the value of surrounding properties are impacted and non-distressed properties for sale may find it difficult to get an offer at fair market value (FMV).
A distressed property sale generally includes any property that sells below FMV. Other examples of distressed properties include properties in which sellers are in a position where they must or want to sell a property, generally to get out from under mortgage payments. This could include sales as a result of a divorce, job loss, decreased income, poor health, probate, and a myriad of other types of sales.
Let me explain some of the real estate terms commonly used in our current market in relationship to distressed sales, such as foreclosure, REO, and short sale. Foreclosure is a legal process with set timelines and outcomes and begins when a property owner, usually after a couple of missed payments, receives a notice of default (NOD). Some may call property that has received an NOD a pre-foreclosure, though this is strictly a marketing term. At this point, the property owner has the option to bring his or her account current and avoid foreclosure proceedings. If the property owner is unable to bring his or her account current, the property will be put up for sale at a public auction known as a trustee sale, which is held at the court house in the county where the property is located. Only experienced investors should consider a trustee sale. When purchasing property at a trustee sale, there could be risks such as title problems, IRS liens, people still occupying the property, structural problems, superior loan pay offs, and more. If no one offers the minimum bid—generally because the outstanding balance on a home is too high or an investor, after doing his or her research, realizes the property is not a good investment—the property will end up as an REO.
With REO properties, ownership has reverted back to the lender. An REO is listed by a REALTOR®, who is hired by the lender, to sell the property that has been foreclosed. The lender will remove all liens on title and clear issues that may slow down the sale of the property. However, there are reported instances where unknown liens have appeared after the close of escrow and the new buyer is held responsible. One recent case in the Inglewood area involved a $35,000 utility district assessment.
Most REO properties are listed fairly close to the price the bank will accept. Lenders have already taken a big loss and offers significantly lower than the listed price on these properties will normally be disregarded. Lenders are usually very motivated to sell these properties though providing a great opportunity for qualified buyers. Lenders are not in the property management business and do not want to delay recovery of their investment any longer than necessary. Whereas REO properties are in the possession of the lender as a result of foreclosure or forfeiture, short sale properties are still in the possession of the owner. However, any contract must be approved by the lender. Short sales, in most circumstances, are the first step to avoid foreclosure.
The term short sale refers to a property that is generally in the foreclosure process but is sold prior to auction for an amount less than what is owed to the lender. Not all short sale listings though are properties in foreclosure. If property owners know they will not be able to continue to make their payments at some point in the near future, they can keep their account current while attempting to sell their property and make arrangements with the lender for a short sale prior to the owners missing a payment or entering foreclosure.
Lenders will consider a short sale for various reasons; although, a letter of hardship must be submitted with a multitude of additional paperwork required by the lender. Lenders evaluate all requests on a case-by-case basis and will also consider, among other things, the appraisal amount of the property and market conditions. Lenders may prefer a short sale in lieu of going through the foreclosure process because the cost of foreclosing on a property may be more than the bank’s loss by taking a short sale, and even if the property goes to auction, the bank may still be forced to take it back as an REO, which they would then have to maintain, list, and sell.
Short sales can take months, are very complicated, and the outcome is not guaranteed. Also, each lender handles short sales differently. Both sellers and buyers of a short sale need to be patient since lenders—especially if you are dealing with a property with a first and a second mortgage—will require more work than a typical real estate sale. If a short sale is approved, it is important to know that the sale will, in most cases, still show up as a short sale foreclosure on the sellers’ credit report.
“A short sale, once sold, will show satisfied after 2 years and the sellers can qualify for an FHA and conventional loan,” said Daniel Roberts with Evofi-One. “However, if a foreclosure shows, it generally takes from 4 to 7 years depending on how the lender reports and how they extend the credit report. The best way to handle it is to try mediation. If that does not work, the lender at least can show they tried before they foreclosed.”
Andrew Pence with Acceptance Capital said, “For a foreclosure, it is at least 3 years to obtain FHA financing and 4 years to obtain conventional financing. However, if the foreclosure was the result of documented extenuating circumstances that were beyond the control of the borrower and the borrower has re-established good credit since the foreclosure, the lender may grant an exception to the 3-year and 4-year requirement.”
Pence further explained that extenuating circumstances include serious illness or death of a wage earner, for example; on the other hand, the inability to sell the house because of a job transfer or relocation to another area is not an extenuating circumstance.
However, before sellers request a short sale from their lender, they should consult with their CPA and attorney because depending on the type of loan and the sellers’ financial situation, it may or may not be the best option.
Although, most recognize that distressed properties can be a great value for home buyers, purchasing a distressed property also helps property owners by relieving them of a heavy burden or by providing lenders the ability to recover all or a portion of their investment.
Locally, I know that not all agents with listings in our MLS (Multiple Listing Service) have properly identified their listings that fall into the foreclosure, short sale, or REO categories (under Features/Terms). This makes it difficult to determine the number of distressed properties we have among our residential listings. However, I would estimate that at minimum a quarter of our residential listings are distressed.
Monday, January 26, 2009
Sunday, January 11, 2009
Proposed AB 885 Septic and Well Testing Requirements Burdensome and Costly
The California Association of REALTORS® (C.A.R.) released a Red Alert January 7, 2009, regarding regulations for Onsite Wastewater Treatment Systems (OWTS) being proposed in AB 885. CA.R. is concerned that, if enacted, these regulations will make it too costly and burdensome to own a property with a septic system. In Madera County, we have almost 20,000 housing units on septic.
The state is in the process of holding several workshops and hearings where members of the public may give written and/or oral input regarding the State Water Board’s proposed regulatory actions and content of the Draft Environmental Impact Report (DEIR). This is your chance to let the State Water Resources Control Board (SWRCB) know that the proposed regulations are too costly and burdensome and that the DEIR falls short of adequately evaluating the true financial impact of the proposed regulations on California homeowners.
District 5 Supervisor Tom Wheeler shared with the Yosemite Gateway Association of REALTORS® on January 8 that he has requested an additional workshop to be held in our area prior to February 9; the deadline set for comments to be provided to the SWRCB regarding the proposed regulations. However, at the time this article was written, there has been no confirmation of an additional hearing to be held in Eastern Madera County.
The Fresno workshop is January 22 at the Fresno Unified School District Board Chamber on 2309 Tulare Street. I’ll be at our C.A.R. meeting in Monterey and will be unable to attend. I would encourage all those that can attend to be there. The remaining workshops are January 27 at 7 p.m. in Santa Rosa, January 28 at 7 p.m. in Eureka, and February 9 at 1:30 p.m. in Sacramento at the Byron Sher Auditorium, Cal EPA Building, on 1001 I Street.
If you plan to attend one of these meetings and provide testimony, be prepared to follow through with providing your written comments and concerns to the SWRCB. Written comments can also be emailed to the SWRCB at AB885@waterboards.ca.gov or mailed to State Water Resources Control Board Division of Water Quality, ATTN: Todd Thompson, P.E., 1001 I Street, 15th Floor, P.O. Box 2231, Sacramento, CA 95812.
The most useful site I’ve found for information on AB 885 is: http://www.swrcb.ca.gov/water_issues/programs/septic_tanks/.
C.A.R. is opposing the current draft of the proposed regulations for many reasons.
• The cost of achieving compliance is too burdensome and costly and hurts housing affordability.
• Groundwater testing and routine inspections will be required whether there is evidence of septic-related problems or not, adding an unnecessary cost burden to property owners—many of whom are low income.
• The separation to groundwater standard and loss of sidewall infiltration will require new and existing homebuyers to install tremendously expensive “alternative systems” if they are even locally allowed.
• The regulations need to allow for an effective, pragmatic variance process, where local government regulators can make site-specific exceptions to the regulations and determinations of “functional equivalency” for local conditions.
• The owners of existing septic systems with supplemental treatment systems will now be required to maintain and transfer technical documents at point of sale. This is a problem because thousands of systems would already be out of compliance due to lost or misplaced documents and real estate professionals will be required to purchase additional lost instrument bonds and will be exposed to increased liability.
• The requirement to install groundwater-monitoring wells for new systems is too costly and will prevent building on otherwise usable lots.
• The groundwater testing requirements are overkill. Testing should be changed to fecal and bacteria sampling, which shows a direct nexus to a failing system.
C.A.R. has the following concerns about the DEIR.
• The DEIR does not give adequate proof that all septic systems are causing water quality problems.
• The DEIR does not adequately consider the true financial impact of these regulations on property owners, especially those who are low income.
• The DEIR does not adequately address the impact of the new disclosure responsibility, increased liability exposure, and added uncertainty on real estate transactions created by the proposed regulations.
• The DEIR failed to adequately address funding options available for low-income property owners to allow them to comply with the proposed regulations. Instead, it asks this population to rely on a fund which may not have enough money available to help all those who will need it.
• The DEIR failed to recognize that the proposed regulations will, in fact, curtail the ability for property owners to develop their lots and therefore will slow or stop growth in some areas. The report also failed to evaluate the impact of the proposed regulations on the ability for local governments to achieve the Regional Housing Needs Allocation (RHNA) goals.
• The DEIR failed to quantify and analyze the increased green house gas (GHG) emissions that will be generated from all the well testing, tank inspections, and septic waste hauling, contrary to AB 32.
The state is in the process of holding several workshops and hearings where members of the public may give written and/or oral input regarding the State Water Board’s proposed regulatory actions and content of the Draft Environmental Impact Report (DEIR). This is your chance to let the State Water Resources Control Board (SWRCB) know that the proposed regulations are too costly and burdensome and that the DEIR falls short of adequately evaluating the true financial impact of the proposed regulations on California homeowners.
District 5 Supervisor Tom Wheeler shared with the Yosemite Gateway Association of REALTORS® on January 8 that he has requested an additional workshop to be held in our area prior to February 9; the deadline set for comments to be provided to the SWRCB regarding the proposed regulations. However, at the time this article was written, there has been no confirmation of an additional hearing to be held in Eastern Madera County.
The Fresno workshop is January 22 at the Fresno Unified School District Board Chamber on 2309 Tulare Street. I’ll be at our C.A.R. meeting in Monterey and will be unable to attend. I would encourage all those that can attend to be there. The remaining workshops are January 27 at 7 p.m. in Santa Rosa, January 28 at 7 p.m. in Eureka, and February 9 at 1:30 p.m. in Sacramento at the Byron Sher Auditorium, Cal EPA Building, on 1001 I Street.
If you plan to attend one of these meetings and provide testimony, be prepared to follow through with providing your written comments and concerns to the SWRCB. Written comments can also be emailed to the SWRCB at AB885@waterboards.ca.gov or mailed to State Water Resources Control Board Division of Water Quality, ATTN: Todd Thompson, P.E., 1001 I Street, 15th Floor, P.O. Box 2231, Sacramento, CA 95812.
The most useful site I’ve found for information on AB 885 is: http://www.swrcb.ca.gov/water_issues/programs/septic_tanks/.
C.A.R. is opposing the current draft of the proposed regulations for many reasons.
• The cost of achieving compliance is too burdensome and costly and hurts housing affordability.
• Groundwater testing and routine inspections will be required whether there is evidence of septic-related problems or not, adding an unnecessary cost burden to property owners—many of whom are low income.
• The separation to groundwater standard and loss of sidewall infiltration will require new and existing homebuyers to install tremendously expensive “alternative systems” if they are even locally allowed.
• The regulations need to allow for an effective, pragmatic variance process, where local government regulators can make site-specific exceptions to the regulations and determinations of “functional equivalency” for local conditions.
• The owners of existing septic systems with supplemental treatment systems will now be required to maintain and transfer technical documents at point of sale. This is a problem because thousands of systems would already be out of compliance due to lost or misplaced documents and real estate professionals will be required to purchase additional lost instrument bonds and will be exposed to increased liability.
• The requirement to install groundwater-monitoring wells for new systems is too costly and will prevent building on otherwise usable lots.
• The groundwater testing requirements are overkill. Testing should be changed to fecal and bacteria sampling, which shows a direct nexus to a failing system.
C.A.R. has the following concerns about the DEIR.
• The DEIR does not give adequate proof that all septic systems are causing water quality problems.
• The DEIR does not adequately consider the true financial impact of these regulations on property owners, especially those who are low income.
• The DEIR does not adequately address the impact of the new disclosure responsibility, increased liability exposure, and added uncertainty on real estate transactions created by the proposed regulations.
• The DEIR failed to adequately address funding options available for low-income property owners to allow them to comply with the proposed regulations. Instead, it asks this population to rely on a fund which may not have enough money available to help all those who will need it.
• The DEIR failed to recognize that the proposed regulations will, in fact, curtail the ability for property owners to develop their lots and therefore will slow or stop growth in some areas. The report also failed to evaluate the impact of the proposed regulations on the ability for local governments to achieve the Regional Housing Needs Allocation (RHNA) goals.
• The DEIR failed to quantify and analyze the increased green house gas (GHG) emissions that will be generated from all the well testing, tank inspections, and septic waste hauling, contrary to AB 32.
Friday, January 9, 2009
Local MLS Provides Many Benefits to Sellers
I am amazed when sellers, including traditional sellers and REO (Real Estate Owned) lenders, list their property with someone who is not a member of the local Multiple Listing Service (MLS) where the property is located. Why am I amazed?
First, let me explain the term MLS. Essentially, an MLS is a database of properties for sale. This database is powerful; it is the most frequently used tool by REALTORS® to screen and select the properties for their clients to view; hopefully, leading to a purchase. Locally, our MLS is provided through the Yosemite Gateway Association of REALTORS®. Not only does our MLS database show current inventory (properties for sale) and listings in escrow, it also has information from the last three years on properties that have sold or have been cancelled, withdrawn, or expired.
By a wide margin, the best advertising method that leads to the sale of a property is exposure in the local MLS. In fact, a study by the National Association of REALTORS® found that MLS exposure is three times more effective than the next closest advertising method (which happens to be Internet advertising) and that homes listed in an MLS sell for significantly higher prices than those not listed in an MLS. Thus, sellers who have listed their property with a broker or agent who is not a member of the local MLS are missing this local exposure.
Consider this, if property is for sale and not in the local MLS database, then when a REALTOR® searches for property for his or her buyer, that property will most likely not be viewed by that buyer. For example, a listing REALTOR® that is a member of the Yosemite Gateway Association of REALTORS® will place his or her listings in our MLS and may also put them in other MLS systems as part of a marketing plan (provided the other MLS does not make it too onerous to do so). However, if a broker or agent from out of our area takes a listing here and only puts that listing in his or her out-of-area MLS and not the local MLS, it makes it extremely difficult for local REALTORS® or buyers to find that property for sale and get the necessary information to view the property.
In addition, if a buyer comes across information online on a non-local website, tracking it down by a REALTOR® can prove to be very difficult. I have a client that provided me a list of MLS numbers this weekend for homes in our area from three different MLS locations! I’m still trying to get information on one of the properties. In all likelihood, this one property will get few (if any) showings because it is too difficult to obtain information on the property.
Following the MLS as the top advertising method, is the Internet, as noted above. Therefore, out-of-area brokers or agents who do not enter their listings in our local MLS will also not have the property they have listed showing up on our many local agent websites via a system known as IDX (Internet Data Exchange). IDX allows the public to view local MLS listings. Many of the agents that are members of the Yosemite Gateways Association of REALTORS® utilize IDX on their own websites. The out-of-area brokers or agents that have not joined our local MLS are therefore missing this marketing opportunity.
A 2008 California Association or REALTORS® (CAR) survey supports the use of the Internet, particularly local real estate websites, when marketing a property. The survey found that home buyers began their search process by using search engines on the Web to identify real estate sites where they found housing-related information on a wide rage of geographic areas and accessed comprehensive information on homes for sale. As they refined their process and narrowed down the properties they wanted to view, they found their local agent's site to be the most useful.
Many REALTORS® know—but I believe most sellers are not aware—that the typical buyer is now an Internet buyer, according to CAR. Approximately 80% of home buyers use the Internet as an integral part of the home-buying process. This has increased 50% from 8 years ago. According to a 2007 CAR survey, only 12 percent of all home buyers looked at newspaper/magazine ads to search for a home. This makes the local MLS posting and use of local Internet websites where the listing can be found an important part of marketing a property.
Property not posted in the local MLS will have less chance of selling, will have fewer showings, will be on the market longer, and if it does sell, will probably be for less than what it would have sold for had it been posted in the local MLS. On the other hand, sellers who have their property posted in their local MLS will benefit by having an expanded sales force. In addition, there will be more demand for their property because it will be exposed to a larger pool of prospective buyers.
First, let me explain the term MLS. Essentially, an MLS is a database of properties for sale. This database is powerful; it is the most frequently used tool by REALTORS® to screen and select the properties for their clients to view; hopefully, leading to a purchase. Locally, our MLS is provided through the Yosemite Gateway Association of REALTORS®. Not only does our MLS database show current inventory (properties for sale) and listings in escrow, it also has information from the last three years on properties that have sold or have been cancelled, withdrawn, or expired.
By a wide margin, the best advertising method that leads to the sale of a property is exposure in the local MLS. In fact, a study by the National Association of REALTORS® found that MLS exposure is three times more effective than the next closest advertising method (which happens to be Internet advertising) and that homes listed in an MLS sell for significantly higher prices than those not listed in an MLS. Thus, sellers who have listed their property with a broker or agent who is not a member of the local MLS are missing this local exposure.
Consider this, if property is for sale and not in the local MLS database, then when a REALTOR® searches for property for his or her buyer, that property will most likely not be viewed by that buyer. For example, a listing REALTOR® that is a member of the Yosemite Gateway Association of REALTORS® will place his or her listings in our MLS and may also put them in other MLS systems as part of a marketing plan (provided the other MLS does not make it too onerous to do so). However, if a broker or agent from out of our area takes a listing here and only puts that listing in his or her out-of-area MLS and not the local MLS, it makes it extremely difficult for local REALTORS® or buyers to find that property for sale and get the necessary information to view the property.
In addition, if a buyer comes across information online on a non-local website, tracking it down by a REALTOR® can prove to be very difficult. I have a client that provided me a list of MLS numbers this weekend for homes in our area from three different MLS locations! I’m still trying to get information on one of the properties. In all likelihood, this one property will get few (if any) showings because it is too difficult to obtain information on the property.
Following the MLS as the top advertising method, is the Internet, as noted above. Therefore, out-of-area brokers or agents who do not enter their listings in our local MLS will also not have the property they have listed showing up on our many local agent websites via a system known as IDX (Internet Data Exchange). IDX allows the public to view local MLS listings. Many of the agents that are members of the Yosemite Gateways Association of REALTORS® utilize IDX on their own websites. The out-of-area brokers or agents that have not joined our local MLS are therefore missing this marketing opportunity.
A 2008 California Association or REALTORS® (CAR) survey supports the use of the Internet, particularly local real estate websites, when marketing a property. The survey found that home buyers began their search process by using search engines on the Web to identify real estate sites where they found housing-related information on a wide rage of geographic areas and accessed comprehensive information on homes for sale. As they refined their process and narrowed down the properties they wanted to view, they found their local agent's site to be the most useful.
Many REALTORS® know—but I believe most sellers are not aware—that the typical buyer is now an Internet buyer, according to CAR. Approximately 80% of home buyers use the Internet as an integral part of the home-buying process. This has increased 50% from 8 years ago. According to a 2007 CAR survey, only 12 percent of all home buyers looked at newspaper/magazine ads to search for a home. This makes the local MLS posting and use of local Internet websites where the listing can be found an important part of marketing a property.
Property not posted in the local MLS will have less chance of selling, will have fewer showings, will be on the market longer, and if it does sell, will probably be for less than what it would have sold for had it been posted in the local MLS. On the other hand, sellers who have their property posted in their local MLS will benefit by having an expanded sales force. In addition, there will be more demand for their property because it will be exposed to a larger pool of prospective buyers.
Saturday, January 3, 2009
Local Real Estate Statistics for 2008; Total Sales Volume Over $110 Million
In preparing the summary of the 2008 statistics from the Yosemite Gateway Association of REALTORS®, I included all our mountain and foothill areas and excluded those classified as out of area. I also included statistics comparing the years 2008, 2007, and 2006. This provides a better picture as to what our local area has experienced over the past three years.
Moving into 2009, there is positive news for those in a position to buy. With falling prices and falling mortgage rates, housing is more affordable. Thus, before I get to the 2008 statistics, I’d like to first share the current opportunities in our mountain and foothill areas. As of the beginning of this year (January 1, 2009), our residential listings range from a one-bedroom home on one acre for $62,000 to an estate property on the lake for $21 million (the next highest listing is for $2.75 million). Our land listings range from a one-acre property for $25,000 to a large commercial piece of land for $2.7 million. We have the following number of local listings: residential, 413; land, 313; manufactured/mobile homes in a park, 29; commercial, 18; and business opportunities, 5.
The number of active listings in 2006 and 2007 in all categories was approximately the same at about 2,300. In 2008 we had a reduction of about one third with a total of 1,556. Our current average for days on market for active residential listings is 222; for active land listings, it is 394.
Due to a decrease in buyers—as well as other contributing factors—we saw a larger number of listings expire; this was especially heartfelt by many sellers. We have seen an increase in expired listings of about 40% in land and 20% in residential since 2006. This year, 76% of our land listings expired and approximately 45% of our residential listings. In 2007 and 2006 we had 50% and 33% respectively of our land listings that expired and 36% and 23% respectively of our residential listings that expired.
The total real estate sales volume for 2008 was over $110 million; almost $80 million of that volume was in residential sales. This is a reduction of approximately 50% of the total volume we saw in 2006 and just over a 30% reduction in volume since last year. I anticipate we will see more action from our elected officials with the focus on stabilizing our economy. Plus, with more affordable homes and lower interest rates, I would expect the sales volume in 2009 to improve. However, I’m going to the California Association of REALTORS® conference this month and expect to have an update on the 2009 forecast from one of our state economists. I will share that forecast in a future Sierra Star article.
The median sales price of land and residential listings was down approximately 17 to 18% when compared to last year. For 2008, the median sales price of land was $125,000 and for residential it was $275,500. The median sale price for land was 10% higher in 2006 than in 2007. The median sales price for residential property in 2006 was actually lower than what it was in 2007—by only 1%.
Sales of residential homes, land, and manufactured/mobile homes in a park have dropped dramatically between 44 and 50% since 2006 and just over 30% since last year. Our end-of-the-year sold figures for 2008 were 241 homes, 65 land listings, and 14 homes in a park. This year, we had 6 commercial and 4 business opportunity listings that sold. Overall, the number of listings that sold in all categories was down 46% since 2006 and down 32% since 2007.
When comparing the 2008 days on market for our closed listings to the 2007 days on market, the numbers are relatively the same. However, when comparing 2008 to 2006, the days on market number increased by 57 days for residential and 74 days for land. The average days on market for our residential closed escrows in 2008 was 197, in 2007 it was 191, and in 2006 it was 140. The average days on market for our land closings in 2008 was 269, in 2007 it was 271, and in 2006 it was 195. Considering that our numbers from 2008 and 2007 were about the same, I see this as a positive indicator for 2009.
For a more thorough breakdown by category or by town, please contact me at Beverly@OakhurstRealEstate.net or by calling 559-760-7600.
Moving into 2009, there is positive news for those in a position to buy. With falling prices and falling mortgage rates, housing is more affordable. Thus, before I get to the 2008 statistics, I’d like to first share the current opportunities in our mountain and foothill areas. As of the beginning of this year (January 1, 2009), our residential listings range from a one-bedroom home on one acre for $62,000 to an estate property on the lake for $21 million (the next highest listing is for $2.75 million). Our land listings range from a one-acre property for $25,000 to a large commercial piece of land for $2.7 million. We have the following number of local listings: residential, 413; land, 313; manufactured/mobile homes in a park, 29; commercial, 18; and business opportunities, 5.
The number of active listings in 2006 and 2007 in all categories was approximately the same at about 2,300. In 2008 we had a reduction of about one third with a total of 1,556. Our current average for days on market for active residential listings is 222; for active land listings, it is 394.
Due to a decrease in buyers—as well as other contributing factors—we saw a larger number of listings expire; this was especially heartfelt by many sellers. We have seen an increase in expired listings of about 40% in land and 20% in residential since 2006. This year, 76% of our land listings expired and approximately 45% of our residential listings. In 2007 and 2006 we had 50% and 33% respectively of our land listings that expired and 36% and 23% respectively of our residential listings that expired.
The total real estate sales volume for 2008 was over $110 million; almost $80 million of that volume was in residential sales. This is a reduction of approximately 50% of the total volume we saw in 2006 and just over a 30% reduction in volume since last year. I anticipate we will see more action from our elected officials with the focus on stabilizing our economy. Plus, with more affordable homes and lower interest rates, I would expect the sales volume in 2009 to improve. However, I’m going to the California Association of REALTORS® conference this month and expect to have an update on the 2009 forecast from one of our state economists. I will share that forecast in a future Sierra Star article.
The median sales price of land and residential listings was down approximately 17 to 18% when compared to last year. For 2008, the median sales price of land was $125,000 and for residential it was $275,500. The median sale price for land was 10% higher in 2006 than in 2007. The median sales price for residential property in 2006 was actually lower than what it was in 2007—by only 1%.
Sales of residential homes, land, and manufactured/mobile homes in a park have dropped dramatically between 44 and 50% since 2006 and just over 30% since last year. Our end-of-the-year sold figures for 2008 were 241 homes, 65 land listings, and 14 homes in a park. This year, we had 6 commercial and 4 business opportunity listings that sold. Overall, the number of listings that sold in all categories was down 46% since 2006 and down 32% since 2007.
When comparing the 2008 days on market for our closed listings to the 2007 days on market, the numbers are relatively the same. However, when comparing 2008 to 2006, the days on market number increased by 57 days for residential and 74 days for land. The average days on market for our residential closed escrows in 2008 was 197, in 2007 it was 191, and in 2006 it was 140. The average days on market for our land closings in 2008 was 269, in 2007 it was 271, and in 2006 it was 195. Considering that our numbers from 2008 and 2007 were about the same, I see this as a positive indicator for 2009.
For a more thorough breakdown by category or by town, please contact me at Beverly@OakhurstRealEstate.net or by calling 559-760-7600.
Winter Water Diversion
Whether you are thinking of selling, buying, or just want to take care of your investment, water damage can be time consuming, aggravating, and costly; something I found out the hard way. After a recent storm, my daughter’s room became flooded due to drainage issues around our home.
“Proper drainage through rain gutters will save you a lot of time and money in the long run. When performing home inspections, one area that I see overlooked much too often, is the rain gutter system. They need to be installed properly and maintained regularly. By collecting and carrying water safely away from the home you can protect your home in many ways,” said Ken Card with Advanced Home Inspections.
Card added that most gutter problems can be easily identified. He recommends you take a walk in the rain. “You will want to look for leaking gutters, improperly installed gutters, damaged or misplaced downspouts, or clogged gutters. If untreated, these small problems can turn into large problems.”
This is what happened at my own home. A clogged and misplaced downspout dumped gallons of water directly onto the ground next to the foundation. In my case, we had flooding requiring a dehumidifier, wet vacuum, and lots of fans! We have now begun the evaluation process to correct the issues leading to our flooding.
Keep in mind that the gutters and downspouts are only as effective as the conditions that exist around the perimeter of your home. They can either act in harmony with those conditions or negate their value entirely. I would encourage you to evaluate your home prior to experiencing water drainage issues; this could save you much frustration and money.
Card said that when evaluating your system you need to check the flow. “A good rule of thumb is to have the gutters slope downward ¼ inch for every 10 linear feet. Be sure all downspouts are in place and diverting the water at least 8 to 10 feet away from your home. The earth should slope away from your house at about a 5 percent grade or 3 inches for 5 feet. Look around for any standing water.”
It is also important to keep your gutters clear of debris such as leaves, pine needles, and twigs. Trimming trees and vegetation away from your home helps. Gutters filled with debris may allow water to back up on the roof, which can result in water damage to eaves and roofing material as well as cause the water to overflow and be deposited in an area resulting in damage. At my home, we trimmed some of our trees; however, we hired a professional for the larger limbs and cleanup.
“If there is a crawlspace, water can eventually get under the house. Not only will it affect the integrity of the foundation and footings, it could lead to cracking, settling, or an eventual collapse,” warned Card.
In addition, these problems can also affect your homes structural integrity. Card said this happens when water damages the fascia, soffit, or the wood framing of the house.
“Another concern resulting from improper water diversion is termites or other wood destroying insects. These pests need water to thrive and reproduce. Poor drainage can encourage termite infestation,” said Card.
Fungus can also be a concern. The corrective action will depend on the severity of the damage. I would encourage you to seek professional advice on the control measures for fungus, which will generally include identifying the type of fungus, removing or treating it, and, of course, how to prevent it.
Card added, “To keep the repair man at bay, divert the water away.” If you have any questions for Ken Card with Advanced Home Inspections, call 559-642-3335 or email him at kencard@sti.net.
You can find more winter home protection tips on snow accumulation, water intrusion, ice dams, flood damage, bursting pipes, and more, on The Weather Channel’s website. You can find their tips at www.weather.com. Click on site in the search box and type in winter home tips.
“Proper drainage through rain gutters will save you a lot of time and money in the long run. When performing home inspections, one area that I see overlooked much too often, is the rain gutter system. They need to be installed properly and maintained regularly. By collecting and carrying water safely away from the home you can protect your home in many ways,” said Ken Card with Advanced Home Inspections.
Card added that most gutter problems can be easily identified. He recommends you take a walk in the rain. “You will want to look for leaking gutters, improperly installed gutters, damaged or misplaced downspouts, or clogged gutters. If untreated, these small problems can turn into large problems.”
This is what happened at my own home. A clogged and misplaced downspout dumped gallons of water directly onto the ground next to the foundation. In my case, we had flooding requiring a dehumidifier, wet vacuum, and lots of fans! We have now begun the evaluation process to correct the issues leading to our flooding.
Keep in mind that the gutters and downspouts are only as effective as the conditions that exist around the perimeter of your home. They can either act in harmony with those conditions or negate their value entirely. I would encourage you to evaluate your home prior to experiencing water drainage issues; this could save you much frustration and money.
Card said that when evaluating your system you need to check the flow. “A good rule of thumb is to have the gutters slope downward ¼ inch for every 10 linear feet. Be sure all downspouts are in place and diverting the water at least 8 to 10 feet away from your home. The earth should slope away from your house at about a 5 percent grade or 3 inches for 5 feet. Look around for any standing water.”
It is also important to keep your gutters clear of debris such as leaves, pine needles, and twigs. Trimming trees and vegetation away from your home helps. Gutters filled with debris may allow water to back up on the roof, which can result in water damage to eaves and roofing material as well as cause the water to overflow and be deposited in an area resulting in damage. At my home, we trimmed some of our trees; however, we hired a professional for the larger limbs and cleanup.
“If there is a crawlspace, water can eventually get under the house. Not only will it affect the integrity of the foundation and footings, it could lead to cracking, settling, or an eventual collapse,” warned Card.
In addition, these problems can also affect your homes structural integrity. Card said this happens when water damages the fascia, soffit, or the wood framing of the house.
“Another concern resulting from improper water diversion is termites or other wood destroying insects. These pests need water to thrive and reproduce. Poor drainage can encourage termite infestation,” said Card.
Fungus can also be a concern. The corrective action will depend on the severity of the damage. I would encourage you to seek professional advice on the control measures for fungus, which will generally include identifying the type of fungus, removing or treating it, and, of course, how to prevent it.
Card added, “To keep the repair man at bay, divert the water away.” If you have any questions for Ken Card with Advanced Home Inspections, call 559-642-3335 or email him at kencard@sti.net.
You can find more winter home protection tips on snow accumulation, water intrusion, ice dams, flood damage, bursting pipes, and more, on The Weather Channel’s website. You can find their tips at www.weather.com. Click on site in the search box and type in winter home tips.
Saturday, December 13, 2008
Does Your Home Attract Potential Buyers?
Most of today’s buyers are looking for homes they can take pride in from the onset. They want to move in and be comfortable and make it their own immediately. Although we have some distressed properties and other properties offered “as is,” most buyers are not looking for fixer uppers or renovation projects. “They don’t want to spend their limited leisure time repairing or waiting for contractors,” according to Ginger Foust with Dream Interior Redesign & Staging.
“Buyers are becoming more and more particular with what they will accept and pay for. They do not want your house with your style choices. This is why professional stagers recommend updating and neutralizing your house,” said Foust.
A key factor in selling your home is the buyer’s first impression. Thus, it should be presented at its best. The majority of buyers are budget, time, and style conscious. “Only a drastic price reduction might attract today’s buyers if they see 1980s and 1990s choices in style, design, and décor. Even then, they will probably present a low-ball offer,” says Foust.
Offering allowances at closing such as new flooring and counter tops is not very effective today. “Buyers do not look that far into the future and many cannot visualize what a house could be,” she added.
What do buyers want? Foust recommends updating features such as light fixtures, appliances, flooring, cabinet finishes, plumbing fixtures/faucets, and countertops and backsplashes. Colors are also sometimes in need of updating. There are mixed suggestions when it comes to color. Although, it generally ranges from white to soft, earth-tone colors, which can bring the outside in.
Lighting is absolutely crucial as it warms rooms and creates ambience. Foust cautions though that lighting which is old, outdated, and in need of repair, can be a negative distraction, and that the message this projects is, “I’m a low-dollar house.” The results could mean a sales price that is lower than what is desired.
She recommends updating lighting fixtures. “This is a relatively small financial investment that can reap big rewards and measurably improve the wow factor in any house. It is worth the money and effort of installation,” Foust said.
Foust also offers some lighting guidelines for sellers. Fixtures need to shine, (no rust, no tarnish, no dust, and no cobwebs). All light bulbs must be working and need to be dust free. Consider clear bulbs in fixtures where there is down light. Add up lights in dark corners and below silk plants for drama. Add a timer to important fixtures if you will not be home to turn on the lights or ask REALTORS® to turn on the lights before potential buyers come into the house. Foust says, “Two minutes of preparation can make a lasting impression.”
In many of our older homes and some of our newer homes we are seeing sculpted, two tone carpet. This type of carpet is outdated! In fact, many buyers are moving away from carpeting or using it sparingly.
Most buyers will just say no to shag carpeting, avocado-colored appliances (or golden, olive, or bronze), walnut cabinets and baseboards, Formica counters, and items trimmed in gold. Some outdated items according to Foust include shiny brass lights and plumbing fixtures, laminate counter tops, tile countertops with dark grout, wallpaper and borders, themed rooms, bold paint, and golden oak, honey oak, or whitewashed oak.
“If you cannot provide the upgrades in your house, then potential buyers will move on. Buyers want it all and they want it now or they move on to the next listing to find it,” said Foust. To learn more about redesign and staging, you can visit Foust’s website at www.dreamredesigns.com or call her at 559-877-2442.
Beverly Scott, Agent/Manager
Oakhurst Real Estate
“Buyers are becoming more and more particular with what they will accept and pay for. They do not want your house with your style choices. This is why professional stagers recommend updating and neutralizing your house,” said Foust.
A key factor in selling your home is the buyer’s first impression. Thus, it should be presented at its best. The majority of buyers are budget, time, and style conscious. “Only a drastic price reduction might attract today’s buyers if they see 1980s and 1990s choices in style, design, and décor. Even then, they will probably present a low-ball offer,” says Foust.
Offering allowances at closing such as new flooring and counter tops is not very effective today. “Buyers do not look that far into the future and many cannot visualize what a house could be,” she added.
What do buyers want? Foust recommends updating features such as light fixtures, appliances, flooring, cabinet finishes, plumbing fixtures/faucets, and countertops and backsplashes. Colors are also sometimes in need of updating. There are mixed suggestions when it comes to color. Although, it generally ranges from white to soft, earth-tone colors, which can bring the outside in.
Lighting is absolutely crucial as it warms rooms and creates ambience. Foust cautions though that lighting which is old, outdated, and in need of repair, can be a negative distraction, and that the message this projects is, “I’m a low-dollar house.” The results could mean a sales price that is lower than what is desired.
She recommends updating lighting fixtures. “This is a relatively small financial investment that can reap big rewards and measurably improve the wow factor in any house. It is worth the money and effort of installation,” Foust said.
Foust also offers some lighting guidelines for sellers. Fixtures need to shine, (no rust, no tarnish, no dust, and no cobwebs). All light bulbs must be working and need to be dust free. Consider clear bulbs in fixtures where there is down light. Add up lights in dark corners and below silk plants for drama. Add a timer to important fixtures if you will not be home to turn on the lights or ask REALTORS® to turn on the lights before potential buyers come into the house. Foust says, “Two minutes of preparation can make a lasting impression.”
In many of our older homes and some of our newer homes we are seeing sculpted, two tone carpet. This type of carpet is outdated! In fact, many buyers are moving away from carpeting or using it sparingly.
Most buyers will just say no to shag carpeting, avocado-colored appliances (or golden, olive, or bronze), walnut cabinets and baseboards, Formica counters, and items trimmed in gold. Some outdated items according to Foust include shiny brass lights and plumbing fixtures, laminate counter tops, tile countertops with dark grout, wallpaper and borders, themed rooms, bold paint, and golden oak, honey oak, or whitewashed oak.
“If you cannot provide the upgrades in your house, then potential buyers will move on. Buyers want it all and they want it now or they move on to the next listing to find it,” said Foust. To learn more about redesign and staging, you can visit Foust’s website at www.dreamredesigns.com or call her at 559-877-2442.
Beverly Scott, Agent/Manager
Oakhurst Real Estate
Friday, December 12, 2008
2009 Board Members Begin Their Term and Association Establishes Strategic Plan
The following is an article I wrote for our local newspaper, The Sierra Star, regarding our local association.
Our current governing board began their term in November immediately after our installation.
This year, our installation was held November 21, 2008. Our leadership team includes Beverly Scott, president; Ron Skinner, president-elect; John Bortz, treasurer/secretary; Melanie Barker, immediate past president; Beth Carver, executive committee member; and our directors, Melissa Buller, Dee Dryer, Rick Jackson, Jacque Hohweiler, Dorothy Miller, and Scott Runtzel. Laurie Humphries, our 2007 past president, has been asked to serve in an ex-officio position. We will be working throughout the year in conjunction with our committees and volunteers to meet the needs of all our members.
In addition, the 2008 and 2009 board members and staff of the Yosemite Gateway Association of REALTORS® contributed to a new strategic plan which was recently approved by the board. We met several times both off- and on-line working on the strategic plan. This plan provides us with a guideline for defining our strategy, making decisions, and allocating our resources.
Our updated mission statement is: The Yosemite Gateway Association of REALTORS® is committed to professional excellence for the success of its members in all aspects of the real estate industry.
Our new vision statement is: The Yosemite Gateway Association of REALTORS® is dedicated to providing trusted leadership, transparent practices, and open communication, while supporting our mission and ensuring the public trust of the real estate profession.
Our values are:
• Membership Driven
• Professional Excellence
• Community Involvement.
Our four main goals are:
• Advocacy: To advocate for, protect, and advance the real estate profession of REALTORS® and Affiliates.
• Communications: To convey information clearly and effectively, allowing for transparent operations and the exchange of information.
• Education: Offer quality education, delivered in a variety of formats.
• Organizational Excellence: Maintain a highly effective governing board, professional staff, and organizational structure.
We also established strategies to ensure we meet our goals. These strategies have been provided to our members and are available to our members with the rest of our governing documents. Our members include REALTOR® and affiliate members. Affiliate members have an interest in real estate-related services that benefit our REALTOR® members and/or our clients/customers. For more information about our affiliate membership program, call our office at 559-683-2650.
Beverly Scott, Agent/Manager
Oakhurst Real Estate
Our current governing board began their term in November immediately after our installation.
This year, our installation was held November 21, 2008. Our leadership team includes Beverly Scott, president; Ron Skinner, president-elect; John Bortz, treasurer/secretary; Melanie Barker, immediate past president; Beth Carver, executive committee member; and our directors, Melissa Buller, Dee Dryer, Rick Jackson, Jacque Hohweiler, Dorothy Miller, and Scott Runtzel. Laurie Humphries, our 2007 past president, has been asked to serve in an ex-officio position. We will be working throughout the year in conjunction with our committees and volunteers to meet the needs of all our members.
In addition, the 2008 and 2009 board members and staff of the Yosemite Gateway Association of REALTORS® contributed to a new strategic plan which was recently approved by the board. We met several times both off- and on-line working on the strategic plan. This plan provides us with a guideline for defining our strategy, making decisions, and allocating our resources.
Our updated mission statement is: The Yosemite Gateway Association of REALTORS® is committed to professional excellence for the success of its members in all aspects of the real estate industry.
Our new vision statement is: The Yosemite Gateway Association of REALTORS® is dedicated to providing trusted leadership, transparent practices, and open communication, while supporting our mission and ensuring the public trust of the real estate profession.
Our values are:
• Membership Driven
• Professional Excellence
• Community Involvement.
Our four main goals are:
• Advocacy: To advocate for, protect, and advance the real estate profession of REALTORS® and Affiliates.
• Communications: To convey information clearly and effectively, allowing for transparent operations and the exchange of information.
• Education: Offer quality education, delivered in a variety of formats.
• Organizational Excellence: Maintain a highly effective governing board, professional staff, and organizational structure.
We also established strategies to ensure we meet our goals. These strategies have been provided to our members and are available to our members with the rest of our governing documents. Our members include REALTOR® and affiliate members. Affiliate members have an interest in real estate-related services that benefit our REALTOR® members and/or our clients/customers. For more information about our affiliate membership program, call our office at 559-683-2650.
Beverly Scott, Agent/Manager
Oakhurst Real Estate
Thursday, December 4, 2008
Real Estate Agents are Busy Keeping Up with Changes
There has been a paradigm shift with the way we have been spending our time and preparing to best assist our clients. We are learning new ways to provide services in our advancing technological world—from better ways to capturing statistics, making better use of our smart phones and cameras, increasing usage of virtual and video tours, blogging, to being greener by sending documents for digital signatures via email and the Internet without the need for printing, faxing, or sending documents in the mail. Webinars, podcasting, and online classes are also becoming more popular. In addition, we regularly take continuing education courses.
Many agents are taking the time to sharpen their skills not only on the fundamentals but also to increase their technological skills. Others are taking the time to specialize in specific areas of interest to include listing foreclosure properties, working with seniors or first-time home buyers, or getting up to speed with the various communication methods that their clients prefer, for example, texting, email, or telephone.
Other ways agents are staying busy is by spending more time learning about our various real estate forms. For example, in November, we had four new forms added to our REALTOR library as well as others forms that were modified that we need to keep abreast of to better serve our clients. Our association routinely schedules classes to help our members with our multiple listing software and other technology-related items and educational classes of which we always have quite a few of our members in attendance.
A number of our local real estate offices hold weekly meetings where they have expanded the focus beyond the standard sales meeting to include more training and educational sessions about marketing, the economy, distressed properties, mortgage programs such as loans insured by the Federal Housing Administration (FHA), which have picked up dramatically due to low down-payment requirements, and more.
Several of our real estate offices are busy either currently using or setting up a secure online transaction management program for tracking their files and managing their clients’ paperwork. This also has a green component to it in a field where paper can be rather overwhelming. Ask any real estate agent, buyer, or seller in a real estate transaction about the paperwork involved and you can see how having the ability to upload and download the documentation online could be an enormous benefit.
We recognize that the real estate market has changed, and we are changing with it. Real estate is not stagnant and neither are we.
Beverly Scott, Agent/Manager
Oakhurst Real Estate
Many agents are taking the time to sharpen their skills not only on the fundamentals but also to increase their technological skills. Others are taking the time to specialize in specific areas of interest to include listing foreclosure properties, working with seniors or first-time home buyers, or getting up to speed with the various communication methods that their clients prefer, for example, texting, email, or telephone.
Other ways agents are staying busy is by spending more time learning about our various real estate forms. For example, in November, we had four new forms added to our REALTOR library as well as others forms that were modified that we need to keep abreast of to better serve our clients. Our association routinely schedules classes to help our members with our multiple listing software and other technology-related items and educational classes of which we always have quite a few of our members in attendance.
A number of our local real estate offices hold weekly meetings where they have expanded the focus beyond the standard sales meeting to include more training and educational sessions about marketing, the economy, distressed properties, mortgage programs such as loans insured by the Federal Housing Administration (FHA), which have picked up dramatically due to low down-payment requirements, and more.
Several of our real estate offices are busy either currently using or setting up a secure online transaction management program for tracking their files and managing their clients’ paperwork. This also has a green component to it in a field where paper can be rather overwhelming. Ask any real estate agent, buyer, or seller in a real estate transaction about the paperwork involved and you can see how having the ability to upload and download the documentation online could be an enormous benefit.
We recognize that the real estate market has changed, and we are changing with it. Real estate is not stagnant and neither are we.
Beverly Scott, Agent/Manager
Oakhurst Real Estate
Wednesday, April 9, 2008
Changing World of Real Estate
Real estate is an always evolving world whether one is discussing the cyclical nature of the real estate market, wondering how the changes
I strongly believe that in today’s market there are certain things that a listing agent and a buyer’s agent can do to increase their effectiveness and help their clients. (I’m focusing on only a few things below but will expand on this in future blogs.) Listing agents, for example, can do so much more for their clients than just put a property in a multiple listing service (MLS) whether it is one or more that they belong to. With that said, the information they put in should include as many photos that the MLS will allow or at the very least 16 photos or more if the number is unlimited. Optimally, the photos will be taken with a good wide angle (one that does not distort)—many digital cameras today can be purchased with a wide angle lens as standard. Before I purchased my new camera, I used a magnetic lens that provided a wide angle. It worked great for non-flash images, but provided a shadow that was difficult to edit out in Photoshop.
In today’s market an agent should be doing all they can do to get a property marketed, and print advertising is no longer the place to do that. With about 80% of people searching for properties online, our “marketing” focus as agents should be to get as much an online presence as we can for our clients. At minimum, a website that features your listings, a virtual and/or video tour, and a method of distributing those tours to other areas on the web such as YouTube, Trulia, Zillow, Blinkx, Google, Craig’s List, and others. Truly, the best print advertising I’ve seen that works is the use of quality flyers in flyer boxes at the property (in a weatherproof box; so, I’ve found out the hard way—I have some on order right now!).
When working with buyers, knowing the community and areas you sell property is essential. There appears to be more and more agents representing clients outside of their normal area of business. If you are a buyer, please use a local agent in the market you are considering buying a home. If you’d like to show your real estate agent how much you value them and at the same time benefit from a local agent that knows the area and its particular quarks, ask your agent to refer you to another agent in an area that is outside your agent’s market territory. You’ll both benefit that way!
It takes a dedicated individual to work in real estate in these changing times. According to the National Association of REALTORS, we are seeing a stabilization of the housing market; we are definitely seeing a pickup in activity in our area. I’m grateful to be able to help those who are ready to sell or looking to buy. I’ve made the best of friends from those I’ve been blessed to assist with their real estate transactions.
Friday, March 21, 2008
Beverly Joins the Web 2.0 World
Welcome to my new and improved real estate website, which now includes awesome maps, chat capabilities, my blog, and virtual/video tours.
I’ve chosen/designed this website with care and have added items that I believe will help bring the site into the Web 2.0 age and provide a value-added service to you. Based on comments I’ve received from clients and research presented at the C.A.R. (California Association of REALTORS) conference in October 2007, I’ve included a chat section where my clients and customers can “chat” with me via the Internet without having to wait for me to check my email (while I’m online). There are also easy links to my featured properties where you can choose to view a virtual tour or video of my listings. There is also a blog summary that links to this blog.
You’ll also find that looking for a property is a much easier and pleasant experience. Generally, you’ll be able to look at the map and see where the home is located visually on a map. If you are looking for land listings though, they may not show on the map correctly as far as location if they have not been “geo-coded” when the listing agent submitted his or her listing.
A feature you will find soon on my site is a foreclosure/real estate owned (REO) properties search feature. This should be available before April 1, 2008.
I love feedback. Let me know what you think of this new site: www.oakhurstrealestate.net.
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