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Brokers Official Statement about Zillow

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

If you want to know what a home is worth do not go to Zillow or any of the other automated valuation services.  These services deliver completely useless estimates of value.  The values they project are based on County records which are known to be ridiculously inaccurate and information that is typically months old.  The only way to determine value is to work diligently comparing recently sold and listed information based upon accurate data.  The only way this can be accomplished is through a professional, your local Realtor. 

 

Recent tests of 3 different online valuation systems comparing the values arrived with an actual recent sale showed a range of value provided of 26% above actual to 32% below actual.  Depending on which system a seller used, they either would not have sold their property, or given up 32% of the actual sales price.  A buyer depending upon which system they used to assign value and figure out what to offer either would have paid way too much for the property, or watched the property be sold to someone else at 32% more than that system said.

 

Don’t use these systems, they put out bad information.

 

Advice for Borrowers Looking for Home Loans

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

With interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.

Sound crazy? No crazier than when you go to buy that hot new vehicle...only to find that there is no price negotiation. In fact, you wind up lucky to just pay the sticker price, as the demand usually allows the Dealer to add a markup to the price. And you don't get the car right away; you have to wait on a list for your turn to come up.

Right now, home loans are like that hot new car - but with the timer ticking on interest rates locks, there are a few things you can do to protect yourself.

First, longer lock in time frames than might normally have been considered are a necessity, to ensure that the file has time to be processed, underwritten, approved and closed in time to protect the rate lock in this extremely volatile climate. And that longer, safer lock-in period may be a bit more costly - but it's money well spent. Overall, the mind set here should not be one of greed. Don't try to squeeze every last drop out of rates. If you are within a quarter percent of the lowest rates offered in the history of this country, you did very well. And rates always shoot up higher at a much faster pace than when then dip lower. So if the savings or opportunity make sense - grab it.

Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.

Finally, be aware that it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Giant mortgage buyers Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning that even credit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fees by Fannie and Freddie. And based on the way lenders have changed their rate sheets over time, there is now very little "premium pricing", which used to allow options for fees like these, points or other closing costs to be covered in return for a slightly higher interest rate.

Right now is still an excellent time to act, before the great low rates of today get away from us. But let's be smart - call us for information on how we can get started right away.

Contact us at Arrowhead Home Loans, 909.336.1793 or send me an email at steve@cbskyridge.com

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Barry Lieberman, Coldwell Banker Sky Ridge Realty

909.336.2131

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Are Home Prices Negotiable?

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Home prices are always negotiable - especially in a Buyer's Market. A better question is "what price reflects the present value of this property?" Finding the answer to this question is often helpful when buyers are trying to determine what price to offer. 

The list price or asking price is the seller's view of what the property is worth. Prospective buyers have their own views.  A deal is made when the buyer and seller come together at an agreeable price.  In most cases, the parties “negotiate” until they come to terms.

What determines value? The value of a property depends on your perspective. To a homeowner who views the property as his or her "home," included in the value may be intangibles such as memories, neighbors, time and money spent on improvements. To a prospective buyer in most cases, the property is valued by its potential. 

To determine the "right" sales price, whether you are a home seller or buyer, value must always be considered in the context of the neighborhood, other homes for sale, and general market conditions. The assistance of an experienced and dedicated Realtor can help you gather the information you need to establish fair market value, saving you valuable time and money. 

Here are some of the factors that contribute to the sales price of a house: 

What is the seller’s situation? 

Real Estate professionals agree that in most markets they are putting three types of transactions together.  First, is the standard sale where the seller has sufficient equity in the transaction to sell the property and pay off any liens.  Second is the short sale.  In a short sale, the seller does not have sufficient equity in the property to cover all the liens.  In this type of transaction, the seller can approve a sale, but the shortfall needs to be approved by any lien holders before the sale ca be completed.  The third type of transaction is the bank owned, or REO sale.  In this instance, a homeowner has lost the property due to default and it is currently owned by a bank. 

The Seller's Motivation:

There three kinds of sellers.  Seller 1 has to sell his home.  In this instance, there is some compelling reason.  Either they have to sell it or they are going to lose it, or there is some other compelling reason… job transfer etc.  Seller 2 would like to sell his home, but doesn’t have to.  Seller 3 would sell his home if he got his number.  Seller 1 is most motivated while seller 3 is least motivated to make a sale.  

The Buyers  Motivation:

Does the buyer have to have it?  In most cases unless the property has some unique qualities or amenities, most buyers don’t have to have some thing. 

Comparable Properties: 

Realtors utilize comparable properties to establish value, knowing that buyers will be comparing what is available and what has sold when choosing a property and the amount to offer.  Size, location age and condition are all factors that are compared to evaluate a property against similar properties.    

The Community:  

Value is certainly affected by the surrounding community.  A property can be elevated, or negatively affected by the surrounding properties or community.  In our market, properties located in the woods which have lake rights are of a higher value than those outside the boundary.  There are many factors that must be considered when evaluating and factoring the community into value.

Summary:

When emotion and circumstances are removed from the process, the market value of a property can objectively be arrived at by comparing similar properties that are available and that have sold.  It is only when the emotion and circumstances that are added to the equation that the difficulty occurs. 

Very little emotion, and circumstances whereby banks or sellers in trouble want to unload the property is contributing to many REO and Short Sale transactions going together at below fair market value.  A fewer number of “normal” sales are going together where sellers are understanding that much of the emotional attachment they have is less significant to buyers in the current market. 

If you are ready to buy or sell in mountain communities, we would be happy to assist you with any of your real estate related needs.  Please contact our office at 909.336.2131, visit us at www.mountainmoves.com, or send us an email at steve@cbskyridge.com   

Where Do Buyers Come From?

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

I did a recent study of our closed transactions, I looked at September, October, November and December to see where the buyers we represented came from.  The following chart shows the percentage data.  What this data tells me is that nearly 1/2 of the buyers that work with Coldwell Banker Sky Ridge Realty to buy homes found us through some relationship with the company or the agent.  It is well documented that the single biggest strength of our organization is the wide reaching network that has been created by over 25 years of market leadership.

Other notable sources are our Kiosk location in Lake Arrowhead Village, Open House, and on the World Wide Web, we are able to source Realtor.com as most effective internet tool.

Source	%
Personal Referral	25%
Past Client/SOI	20%
Realtor.com	14%
Kiosk	11%
Open House	9%
Sign Call	6%
Agent Referral	5%
Walk In	3%
Homes Magazine	3%
Personal Website	2%
Relocation Source	2%
Total	100%

90 Days of Sales on the Mountain- Listings Sold

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

The following chart shows all single family home sales on the mountain from October 23, 2008 to January 21, 2009 according to the Rim Association of Realtors. 

Coldwell Banker Sky Ridge Realty continues to be the market leader on the mountain.  Sellers serious about results continue to choose Coldwell Banker Sky Ridge Realty for quality representation.

		Market
Firm	Solds	Share
Coldwell Banker Sky Ridge	41	31.1%
Prudential California Realty	14	10.6%
Mountain Top Producers	12	9.1%
Remax Lake Arrowhead	10	7.6%
ERA Bruin Trojan Realty	9	6.8%
Lynne B. Wilson and Assoc	8	6.1%
Century 21 Bonnie Blue	7	5.3%
Bibby Realty	5	3.8%
Mountain Cabin Real Estate	4	3.0%
Windermere Lake Arrowhead	4	3.0%
Lake Arrowhead Realty Co.	3	2.3%
Century 21 Bill Baker	2	1.5%
Lakeview Realty	2	1.5%
Mountain Country Realty	2	1.5%
The Parkinson Group	2	1.5%
Century 21 High Country	1	0.8%
Coldwell Banker Running Springs	1	0.8%
Cozy Cabins Realty	1	0.8%
Keller Williams Lake Arrowhead	1	0.8%
Realty World Moquin	1	0.8%
So Cal First Financial	1	0.8%
Tarbell	1	0.8%
Total	132

Crestline Lake Gregory Real Estate - 90 Days of Sale Activity

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

The following chart shows all single family home sales in the Crestline/Lake Gregory market from October 23, 2008 to January 21, 2009 according to the Rim Association of Realtors. 

Coldwell Banker Sky Ridge Realty continues to be the market leader in the Crestine/Lake Gregory real estate market.  Sellers serious about results continue to choose Coldwell Banker Sky Ridge Realty for quality representation.

		Market
Firm	Solds	Share
Coldwell Banker Sky Ridge	8	28.6%
Bibby Realty	4	14.3%
ERA Bruin Trojan	4	14.3%
Lynne B. Wilson and Assoc	3	10.7%
Prudential California Realty	3	10.7%
Century 21 Bonnie Blue	2	7.1%
Lakeview Realty	2	7.1%
Cozy Cabins	1	3.6%
The Parkinson Group	1	3.6%
Total	28

Lake Arrowhead Real Estate - 90 Days of Sales Activity

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

The following chart shows all single family home sales in Lake Arrowhead from October 23, 2008 to January 21, 2009 according to Rim O' The World Association of Realtors.

Coldwell Sky Ridge Realty had more listings sell than nearly all other companies combined for this period.  Sellers serious about selling and looking for results continue to choose Coldwell Banker Sky Ridge Realty for quality representation.

		Market
Firm	Solds	Share
Coldwell Banker Sky Ridge	21	43.8%
Remax Lake Arrowhead	5	10.4%
Lynne B. Wilson and Assoc	4	8.3%
Prudential California Realty	4	8.3%
ERA Bruin Trojan	3	6.3%
Lake Arrowhead Realty Co.	2	4.2%
Mountain Country Realty	2	4.2%
Windermere Lake Arrowhead	2	4.2%
Century 21 Bonnie Blue	1	2.1%
Keller Williams Lake Arrowhead	1	2.1%
Mountain Top Producers	1	2.1%
Southern California First Finacial	1	2.1%
Tarbell Realtors	1	2.1%
Total	48

Short Sale Frequently Asked Questions

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

What is a "Short Sale"?

A short sale is when a homeowner owes more than the property is currently worth at market rate.  The bank(s) holding the trust deed(s) negotiate with the homeowner and accept a lesser amount than is owed, hence they are "short".  (also referred to commonly as "upside down")

What are the basics in a short sale transaction?

A typical short sale involves many steps that are transparent to the buyer, but can take significant time.  Approval of a short sale is dependent upon an agent representing the seller submitting a complete short sale package.  That package contains information the bank will need to evaluate the offer and potential short fall.  The first mistake often made is not preparing and organizing the required documentation in an effective manner.  Generally, once the complete package has been received, it can take up to 2 weeks for a bank to assign a negotiator to evaluate the deal.  If the basic criteria is met, the negotiator then assigns an independent agent, or appraiser to prepare a "Broker Price Opinion (BPO) to establish an independent value.  This BPO is used by the bank to establish value and evaluate whether or not to accept the short fall.  Once approved, the short sale lender will issue an approval letter to the homeowner/agents outlining the terms by which it will authorize the sale, along with the date by which escrow must close or the authorization may expire.  A reasonable expectation with an agent who competently assembles the package and follows up with the lender(s) would be a 30 to 45 day addition to the normal escrow period.  Any longer than this and something is wrong.

What kind of offer is going to be most acceptable to the bank?  I really want this house!

The bank is interested in only one thing "the bottom line"... how much will go to the bank at the close of escrow.  Part of the package submitted to the bank is a sellers net proceeds document which is generally prepared by the escrow company who is going to handle the transaction.  This document clearly identifys all the fees involved in the transaction and the projected "net" to the bank.  Banks are looking for clean deals.  The cleaner the deal, the easier the approval process will be.  The best kind of offer is a clean offer.  No contingencies, minimal seller concessions.  If the buyer needs to have the seller pay costs on their behalf, or if there are other required concessions, the deal may not happen.

How long can I really expect from the time I write the offer to the time we close?

Understand that there are two sometimes 3 approvals that must be obtained to close a short sale transaction.  First the homeowner (seller) must approve the contract then the contract must be approved by the lender(s).  If a seller has a first and a second on the property, both the first and second must approve.  Even if the lender is the same for the first and second, an approval will be required for each loan because the first and second will be completely different departments.  Keep in mind that there are factors outside of everyones control.  Changes by the buyer and seller midstream can also affect the timeline.  As said above, if done correctly 30 to 45 days more than a normal 30 day transaction is what should be expected.

What happens if the property is foreclosed upon?  Is my offer protected?

No.  Often if negotiated correctly the Broker can forstall the foreclosure process, but not in every instance.  It happens frequently that the process is mishandled and too much time lapses and the lender forecloses on the property.  If this happens any negotiated offers and agreements are voided.  Even if they buyer has invested dollars inito the transaction, the transaction is void.  This makes the communication process even more critical in that more than the opportunity to purchase the home can be lost.

Are short sales a good value?  Would you buy one?

Yes, to both questions.  Although the process can be extended, some of the best values in our market are currently being bought in this manner.  It is important for both agents involved in the transaction to understand and be willing to implement the process.  In order for a transaction of this type to happen, it must be a cooperative effort between all parties.

Where do I get more information about the process?

Contact me directly at steve@cbskyridge.com or contact me at my office at 909.336.2131.  I have numerous agents who understand the process and can assist you in either selling a property using the short sale process, or purchasing a property that is a short sale. 

Short Sales An Alternative to Foreclosure

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Lenders in the current evironment in most instances are approving "Short Sales."  A "Short Sale" is when the lender allows a homeowner to sell a property for less than the existing values of the loans against it, forgiving the difference.

As the number of homeowners in default on their mortgages began to rise over the last few years, troubled homeowners are now resorting to negotiating with lenders to take less than full payoff on their mortgage at closing.... and are getting the banks to go along with them.

The problem with "Short Sales" is that often they take significantly longer than a standard transaction an there is no assurance or guarantee that after the wait, the lender will approve the reduction in the payoff.  This can leave buyers out in the cold after a long wait and potential expenditure of costs.  

If done correctly, some of the concerns can be mitigated.  There is a process that must be followed to effectively close a short sale transaction.  Unfortunately, most real estat agents are not equipped with an understanding of the process which puts both buyers and sellers in jeopardy.  My advice to anyone on either end of a short sale transaction is to ask the question of the broker involved... have you sucessfully closed a short sale and what is the process you follow.  In a separate blog posting later today or tomorrow, I will provide a suggested process that will work.  If your agent isn't following something similar, beware.

Under the short sale process lenders that have borrowers that are in default are ahead of the game because they do not have to take possession of the property and in turn go out and find a buyer.  Industry averages show that lenders that accept a short sale are taking losses in the 19 to 20% range where homes that go through the foreclosure process yield 40% or more losses.

Mortgage companies are attempting to retool their loss mitigation departments to increase the efficiency of the process due to the anticipated numbers of short sale transactions.  In many markets, homeowners owe more on their mortgages than the homes are worth.  When this happens, often the only alternative available to sell the property is the short sale.  

For additional information on the short sale process, or if you have questions, email me at steve@cbskyridge.com or contact me at my office.