What To Do When You Owe More Than The Current Market Price Of Your Home?

Trying to hide from reality will only exacerbate the situation. Allowing your home to be foreclosed by your loan holder may have significant long term impact on your credit score and financial situation in general.

There are several reports as of the last few weeks stating that short sales are going up as foreclosures are going down. In fact, the number of homes in peril has remained about the same, at 9.9 percent of American households, according to the Mortgage Bankers Association. What has actually changed is that banks have realized that they do not want to be in the home maintenance business, and are beefing up and expediting the short sale process.

Short sales are selling, buyers realize that they are paying fair market (today's market!) value and although it does take a bit more time to close escrow than a regular sale, it is not taking the 10-11 months that it used to take.

As a Seller, choose a Realtor you trust and has had experience with short sales. Keep in mind that when you list your home as a short sale, it should be treated like a standard sale with all the benefits of preparation and marketing.

My Associate Anne Salerno and I have been holding "Saturday Short Sale Conversational Cafes" to provide basic "how to" information on short sales. Each meeting brings more homeowners anxious to have the most current information presented and an unlimited opportunity to ask questions pertinent to their unique situation.

To reserve a space, give me a call at 760-799-1540.

More short sale information to come on my next blog!

First Time Buying Is Possible Today!!

This is a buyer's market. As we are four to five years into the biggest housing bust in modern history, and prices have come down a long way, about 30% from their peak.

Mortgages are exceptionally low, you can get a 30-year loan for around 4.5%. Compared with rates of 6.3% (about two years ago), that drop cuts your monthly payment by a fifth.

You will save on taxes, you can deduct the mortgage interest and real estate taxes from your income taxes!

Buying a home is forced savings; today, you can pay a mortgage for less than it takes to rent!

Short Sales Tips for Sellers

• Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional and consult a real estate attorney and/or who specialize in short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won't try to take advantage of your situation or pressure you to do something that isn't in your best interest. A qualified real estate professional can:

Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).

Help you set an appropriate listing price for your home, market the home, and get it sold.

Ease the process of working with your lender or lenders.

Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval.

• Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include:

A hardship letter detailing your financial situation and why you need the short sale.

A copy of the purchase contract and listing agreement.

Proof of your income and assets.

Copies of your federal income tax returns for the past two years.

• Having a Short Sale may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.

Home Renovation

As a homeowner, you should weigh the pros and cons when planning to renovate your home; and while many home renovations improve the look of the property, some may not increase the home’s value, while others actually can make it more difficult for the homeowner to resell.

Some renovations, like in-ground swimming pools may discourage a buyer who views it as requiring too much upkeep. While in-ground swimming pools may work in areas with warm climates year-round, such as our area, it is unlikely a homeowner will recoup the costs associated with installing it.

The State of Real Estate

Per an article published in the Los Angeles Times, “The delinquency rate on home equity loans has fallen for the first time in two years, reflecting the slowly stabilizing housing market and consumers' efforts to clean up personal balance sheets, the American Bankers Association…”

The downward move was anxiously expected by the ABA, and it is the first downward move since the first quarter of 2008.

There was also a decline on missed payments on consumer loans and bank cards as well.

This information is valuable to economists as they study consumer trends as well as the stability (or lack thereof) in the housing market.

According to the chief economist of the ABA, "The pace, …of the housing recovery is still going to be very long and drawn out."

Visit my web site, www.corinanoriega.net and search for trends in our neighborhood under "Search Properties".

5 Things to do Before Putting Your Home on the Market

1. Have a pre-sale home inspection. Be proactive by arranging for a pre-sale home inspection. An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.

2. Organize and clean. Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.

3. Get replacement estimates. Do you have big-ticket items that are worn our or will need to be replaced soon, such your roof or carpeting? Get estimates on how much it would cost to replace them, even if you don’t plan to do it yourself. The figures will help buyers determine if they can afford the home, and will be handy when negotiations begin.

4. Find your warranties. Gather up the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, and any other items that will remain with the house.

5. Spruce up the curb appeal. Pretend you’re a buyer and stand outside of your home. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? Are pretty flowers or plants framing the entrance? Is the walkway free from cracks and impediments?

Things to do before your home goes on the market

"Curb appeal” is the first impression a home makes when a potential buyer arrives, and it is critical when selling a home.

One area often neglected is the driveway, which typically is one of the first features a potential home buyer notices when arriving. If the concrete driveway is oil-stained or has cracks, check with a local home center for cleaners and crack-repair compound. For asphalt driveways, a seal-coat often can make a big difference in appearance and also help prolong the asphalt.

When selling a home, first impressions are extremely important. Neglecting to
maintain a lawn by letting it turn brown or become overgrown may discourage a buyer. To prevent this, homeowners should cut back or remove trees and bushes that are overgrown, especially if they are hazardous. Weeding and laying fresh bark in planter beds also can contribute to a favorable first impression.

Are you thinking about selling your home? Don't hesitate to call me for a market analysis, and other marketing information.

Check my website at www.corinanoriega.net, or call me at 760-799-1540.

Thank you!!

Teaching Children About Money, Your Kids vs. Your Wallet

How many times have you wondered whether your children think money does indeed grow on trees? It probably seems like every time you turn around your wallet is being attacked by the "gimme's". If you honestly examine your spending habits (and those of your kids), you may realize that you have not given them any reason believe that you don't have a money tree.In truth, we all want things and kids are no different. How easy it is to whip out the credit card(s) and instantly gratify our desires. What message are we sending our kids?What follows is a collection of ideas about how we can instill in our children a better understanding of money and how it works.

Every child should have his own savings account even if it is just a piggy bank. Whether your child receives an allowance or works a job, establishing a savings plan is a must. Encourage your child to donate a certain amount to charity (to help them develop a lifelong habit of helping others). Then establish a certain percentage for long-term savings (such as college) and short-term savings (such as clothes, toys, etc.). Saving for both long- and short-term goals will build a child's confidence in her ability to save and helps her learn delayed gratification. And, once the savings goal has been met, she may even discover that the money would be better spent for something else.

Hold a Bill-Paying Night
This is a great activity to show your school-age children where your money goes. You might even learn a bit yourself. First, assemble a list of your monthly and/or weekly expenses and their amounts. The amounts don't have to be exact. Write the expenses and their amounts on separate slips of paper. Then, add up your monthly income and use pretend money (Monopoly® money or make your own) to represent the amount.Next, take the expense slips and give them to your children. Have them come to you and "collect their bill" one expense at a time. This is an excellent visual representation of how quickly the paychecks get depleted! Afterward, discuss ways you can cut your spending to help stretch the paychecks for things that are really important. You might be really surprised at your children's input.

Establish Spending Limits
Establish spending limits for items like clothes and shoes. Be willing to pay so much for something, but your child must make up the difference with his own funds if he goes over the allotted amount. For example, he may want a $100 pair of shoes. You agree to pay what you normally pay (say $40) and he has to pay the rest. New school clothes take a huge bite out of the family budget; why not enlist the aid of your kids? Agree to only pay for so much and then leave the buying up to them (within reason, of course). They may surprise you with what they are able to do with their money. Encourage them to watch for sales in order to maximize their dollars.

Take Your Child Grocery Shopping
If your child can run a calculator, she can help you grocery shop. Give her a fixed amount that you will spend on groceries and have her subtract each item from the total as you shop. Teach her to compare food labels and get the best product for the money. Ask for her input about how you can reduce your overall grocery bill.

There are many ways to teach your children the value of money and help them build valuable skills. If you don't teach them, who will? So take the opportunity to call a cease-fire in the battle between your kids and your wallet and work out a compromise in which both sides win.

Current market information

According to an article in The Desert Sun, Bob Thomas, lead field consultant for Real Data Strategies, has made this one-year trend observations for the first quarter of 2010:

“Cathedral City remains in recovery mode. There's been an erosion in average sales price of 5.3 percent; year-over-year, sales are flat at 211 units. The ratio between the list price and sale price is moving into the 90 percent level — and that gets buyer attention in this market. The home sale average was $171,588.”

Additionaly, MDA DataQuick of San Diego reported Tuesday that housing sales in
Southern California's real estate market year-over-year were flat in April, but median
prices rose 15 percent compared with April 2009, according to The Desert Sun:

“The DataQuick report on regional activity contrasts with an analysis of data done for The Desert Sun that shows Coachella Valley sales up nearly 58 percent from two years ago and up 17 percent from last year.”

“Real Data Strategies' analysis of the Multiple Listing Service for The Desert Sun also shows affordability is at 60 percent and the average sales price grew 16 percent to $290,952 in the first quarter of 2010 compared to the same period in 2009.”

“The market's still taking baby-steps on a long road to recovery, trying to find its footing,'' John Walsh, DataQuick president, said in a statement published in The Desert Sun . “It's unclear which of today's sales characteristics are part of a new reality, and which are still temporary turbulence.”

Foreclosures and Short Sales

Short sales and foreclosures are the current hot topic in real estate with many of these types of transactions coming across the Escrow Officers desk. Foreclosures and short sales are often confused but they are two distinct processed supported by their own individual terminology. Following is a summary of many of the most common terms that a buyer and seller will experience in purchasing/selling either a foreclosure or short sale property.

FORECLOSURES

Pre-foreclosure: The period beginning with initial mortgage default up to when the distressed property is sold.

Notice of Default (NOD): Official notice from the lender that the Borrower has defaulted. The NOD formally starts the foreclosure process and it outlines the reinstatement period.

Reinstatement Period: The time frame stipulated in the NOD that the borrower has to reinstate the loan by making payments and bringing account back to good standing.

Trustee Sale: If after the reinstatement period has expired the loan is still in default the lender can then sell the property as soon as 21 days after the Notice of Trustee Sale is recorded.

Publication Period: It begins once the redemption period has expired and must be at least 21 days prior to the Trustee Sale. A notice is published once a week for three weeks in the local newspaper.

Notice of Trustee Sale (NTS): Recorded document explaining when and where the foreclose sale will be held.

Redemption Period: The time period that the distressed borrower has to redeem the loan after the NOD is recorded. In California, that time period is 90 days. (Not to be confused with statutory right of redemption).

Statutory Right of Redemption: One year after the Trustee Sale, the borrower can make payment of the loan in full plus costs to redeem.

Real Estate Owned (REO): The status of the property when the ownership is transferred involuntarily from the homeowner to the bank.


SHORT SALES

Short Sale: When a lender agrees to accept less than what is owed on the mortgage and release its lien on the property.

The Property is “upside down”: This phrase is commonly used to describe a situation where the amount due on the existing loan is higher than what the property is appraised for or will sell for.

Loss Mitigation Department: The department at the lender that is responsible for reviewing all short sale documentation, ordering a BPO, and approving or denying short sale.

BPO: Brokers Price Opinion (BPO), typically ordered by lender, is a property valuation report to help determine what the property might sell for.

What is my home worth?

Since January 2010, there have been 12 homes sold, the lowest priced home sold for $87.52sq.ft., the highest priced home sold for $127.87sq.ft., this home in particular has a pool.



There were 4 short sales, 4 bank owned sales and 4 regular sales. Distressed properties in the area are still keeping prices lower than they should be for this type of home. The hope is that the worst is almost over and values rebound.



There are 3 homes presently on the market, and are listed from $106.69sq.ft. to $260.66sq.ft., this home in particular has a pool.



Other than that, there are several homes that are either contingent or pending in escrow. I will be able to provide further information as they close escrow.



I hope this information is valuable, and I will be happy to answer any question that you may have. I can be reached at 760-799-1540 or via email at corina@windermere.com.

Comfort for ill and traumatized children in our area

Project Linus is an all volunteer organization that provides comfort and security to seriously ill and traumatized children through handmade blankets in our area.

Rosemarie Durkton, a resident of Cathedral City, is the Coachella Valley Chapter Coordinator. Ms. Durkton has recruited “blanketeers” to make the blankets, as well as arranging with Coachella Valley organizations such as hospitals, shelters, and social service agencies for the distribution of these blankets.

The Coachella Valley chapter has created and delivered more than 19,000 blankets, over 5,000 caps and almost 2,000 dressed teddy bears to date to agencies such as the nurseries at Desert Regional Medical Center, Barbara Sinatra Children’s Center, Well in the Desert Homeless Shelter, Shelter from the Storm and the Marine Air Combat Hospital at 29 Palms.

If you are able to create beautiful blankets, and/or donate appropriate fabric to be used to make the blankets, send me an email to corina@windermere.com or call me at 760-799-1540, I will be happy to stop by to pick up materials or blankets at your home and deliver them to Rosemarie.

Did You Know....?

Kitchens are always one of the primary selling features for a home in just about any price range.

If you have an outdated kitchen with dark wood cabinets, outdated appliances, older counters, a poor work flow, or other problems that could be solved by a partial or complete remodeling, you will generally see more of a return on the home's selling price than the amount of money you invested in the remodel.

Bathrooms are another area of the house that returns well on selling. If the home has only one bathroom, the addition of a second one is generally a huge return. Adding a bathroom to a master bedroom to create a master suite is typically another good return, as is remodeling outdated bathrooms.

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California won't tax forgiven home debt

Tax relief is on the way for thousands of fearful California mortgage borrowers. Most no longer face a double whammy of losing their homes and then paying a big state tax bill on the forgiven degt.

State lawmakers passed SB401, a bill to exempt borrowers who lost homes to foreclosure or short sales in 2009 from state taxes that can run into thousands of dollars. The same is true for certain types of loan modifications.

State officials say 100,000 people statewide will be spared paying tax they otherwise would owe.

The bill affects people who had debt forgiven as they lost homes in foreclosures, short sales and deeds in lieu of foreclosure last year and through 2012 now. Also affected, are those who got loan modifications that cut the amount they owe the bank.

In short sales, a bank might accept a sales price of $250,000 when it is still owed $350,000 on the home. In deeds in lieu of foreclosure, the bank simply takes back the house and may forgive what's still owed. The difference is the forgiven debt. Borrowers can avoid state taxes on up to $500,000 in forgiven debt.

The Franchise Tax Board says the tax forgiveness measure mostly applies to people who refinanced their homes to get better interest rates or extract equity, and then had a short sale or foreclosure where debt was forgiven.

But the tax board also warned that refinanced dollars taken out as cash and spent on items other than home improvements may be taxable.

Those who bought houses and never refinanced before doing a short sale, loan modification or foreclosure are unaffected. In most cases the banks just take back the houses. There is no forgiven debt, and no tax bill, said the tax board.

Investors are also unaffected. They still must pay state taxes on forgiven debt. The bill affects only people who live in their home.

© Copyright The Sacramento Bee. All rights reserved.

2010 First Quarter - Market Analysis

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For most families, your home is your biggest investment. For many of us it will also be our retirement fund.

Because of this, one of the most important features in my blog will be the Market analysis.

This will give you information in regards to what is listed at this time; homes that are in some way under contract; and as well as what has sold recently in your neighborhood.

The abreviations above the numbers are as follows, address, city and map page.

Then comes # of bedrooms, # of bathrooms, square feet of the house, square feet of the lot and the year it was built.

The next column will show certain ammenities such as garage, spa, pool, etc.

The Date column shows the day the home was listed, gone into a contingent or pending status or sold.

Next to the date, it shows the dollar amount per square foot; then how many days it was on the market.

The last two columns show the home original price, the listed price reflects any changes that have been made to the original price and under sold properties, it will show the actual sale price per public records.

I hope you will find this information useful. Of course, you may call me or email me with any questions that you may have.

92234 Sellers

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This chart shows that Windermere Real Estate has represented almost twice as many sellers than the next Real Estate brokerage in your zip code area!

Windermere Real Estate!

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I am so proud to belong to the most successful Real Estate company in the Coachella Valley!

I have included Desert Area Production Volume graph for the year 2009, and it shows that in what everyone says was a really bad real estate year, our sales volume was just shy of 1 billion dollars!

Did You Know....?

According to the California Association of Realtors, homeowners wanting to pay off their mortgage earlier than planned can do so by making extra principal payments.

One extra full principal and interest payment a year will reduce a 30-year loan to about 17 years, and adding the following month’s principal payment to the current one will cut the loan almost in half.

It is important that borrowers tell their lender the extra money is to be credited to principal. Homeowners should keep records of their payments and review it once a year to be certain the lender has followed directions.

All Homes Available in Century Park, Cathedral City

If you're interested in knowing what's available in the Cathedral City family community of Century Park click this link.

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