Bank Owned & Probate Properties: Buyer Beware!

I was chatting with one of my investor clients yesterday, as we are getting ready to close on the purchase of a Probate Sale, and our discussion centered on the unknown. In most property transfers, the seller(s), and seller's agent, are required to disclose material facts regarding the physical condition, and events that have taken place over the past three years. So, what happens when the owner or agent can't obtain that information, as is the case with probate and bank owned homes? You can't disclose what you don't know! The bank's Asset Manager never lived in the property, and the same may be true for the Executer/Administrator of a will, or living trust, which excludes either of them from disclosing, what may be, important details to a buyer. Additionally, these type of properties are typically sold 'as is', where no repairs or warranties are given from the selling side.

So, where does the burden fall? The burden falls squarely on the shoulders of the buyer, and buyer's agent. Now, in the case of my investor, it is known, and has been disclosed, that the owner did expire in the property, which is a material fact that may make some buyers queasy. Obviously, that bit of information didn't affect my investor's decision, and when he is done with the "top-down" remodel of this property, it won't matter to a lot of people. But, what about the pest report? Roof? Electrical? Plumbing? Foundation? If he were not a contractor, he'd have all these items inspected by a professional, reports would be generated, and the decision to continue with the purchase of the property would hinge on the results and recommendations within those reports. Costly? Yes. But, for the everyday buyer, potentially more costly not to! Now, I don't want anyone to think I am steering buyers away from these types of properties…nothing could be farther from the truth, due to the potential for incredible discounts. As a buyer, just be aware of the potential pitfalls, have a professional real estate agent, and reap the rewards this Sacramento Housing Market has to offer!

Best wishes,

Kyle Groves

Short Sale Doesn’t Always Mean You Have To Wait To Buy Another Home…

So you had to Short Sale your house? Conventional wisdom says you won't be able to buy a home for, at least, the next two years, right? In most cases, conventional wisdom is correct…however, not absolutely correct in every case. I was talking to Rich Estep, a Sr. Loan Officer with Paramount Equity Mortgage, recently, and he shed a little known fact about FHA loan guidelines, and how they pertain to borrowers who have had to Short Sale their home within the past two years. I am paraphrasing, but the statement was something like this:

"A seller in a short sale transaction, even within the past two years, can obtain a FHA loan to purchase another primary residence, if the previous mortgage was current when the short sale closed, and all other minimum FHA guidelines are met (credit score, income, etc.)."

Now, I understand many folks who have faced short sale, may not have been able to keep up with the payments. But, for that small percentage that were able to keep up, or after falling behind were able to become current, this bit of news could be very helpful. Rich did say, procuring a loan after a short sale, is not a slam dunk, but if you fit the criteria, it is definitely worth exploring! If you fit this description, contact your mortgage professional, or you can contact Rich at restep@paramountequity.com. Then contact me to help you find your next Sacramento Area home!

Best wishes,

Kyle Groves

Sorting Out The Federal Tax Credits For Home Buyers…Sellers Take Notice!!

By now, you've probably heard story on top of story about the "First Time Home Buyer Tax Credit," originally set to expire on November 30^th…well, Congress got together, and agreed to extend that credit until April 30^th, 2010! Great news, right? $8,000 in "free" money to the individual(s) who decide that NOW is a good time to enter the Sacramento Area Real Estate Market. But wait, it gets better!! Congress also passed legislation to expand the tax credit to include $6,500 to "Move Up Buyers," or existing home owners who are looking to buy a new primary residence.

Sacramento Area SELLERS, we have BUYERS!!!

In Sacramento, it's a "No Brainer" to enter the market, regardless of the credit, due to declining home values, the likes of which haven't been seen since the 90's. In reality, the tax credit is icing on the cake, as investing in real estate, right now, is the safest bet it has been in a decade. The fact that Congress passed the extension for First Time Home Buyers, and the expansion for Move Up Buyers, the move is, likely, a huge boon for Buyers and Sellers alike. As housing inventories wane across the Sacramento Area, we are entering a period of normalcy. The backlog of 2008 is no longer, the banks are trickling their REO inventories out to the public, short sales are taking months to get done, and Buyers are running out of homes to purchase. As the Holiday Season approaches, let me jump back into my childhood, and liken this the "Cabbage Patch Kid" phenomenon…everybody has to have one, Toys R Us has lines out the door, and only a few will actually get one. In the Sacramento Area Real Estate Market, that equates to Lots of Buyers, Multiple Offers to Sellers, and Rising Home Values!

It's about time for Sacramento Area Sellers, to think about getting Off The Fence!

Here's a peek at some of the Tax Credit Qualifications:

• Tax Credit now applies to sales occurring between January 1, 2009 and April 30, 2010
  
• Allows up to a $6,500 tax credit for repeat (existing home owners) who have lived in their current home for at least 5 years
  
• There is a maximum purchase price of $800,000; no minimum purchase price
  
• Income limits have been increased to:
  
  • $125,000 for single tax payers
    
  • $225,000 for married tax payers filing a joint return
    

For specific information & requirements on both, the $8,000 1^st time Home Buyer Tax Credit or the $6,500 Repeat Buyer Tax Credit, visit: www.FederalHousingTaxCredit.com or consult your tax professional.

All the best,

Kyle Groves

In Sacramento, Buyers Must Move Quickly And With Purpose!!

Ahhhh, my first blog...grab the bottle of bubbly, and smash it on my bow!  As a Sacramento Realtor, I've been helping buyers purchase homes in our, often misunderstood, real estate market. 

Bank owned, Sacramento Short Sales, Probate Sales, Flips...yes, they are all out there.  Typical buyers entering the Sacramento market believe, by no fault of their own (insert Media here), that these homes are falling off the shelves at the local Savemart, and that sellers will be begging for their heavily discounted offer. 

My job as a Sacramento Realtor starts here, with education.  No longer do we have 13 months of housing inventory, where buyers routinely received 5 digit discounts, as we did in 2008 and the beginning of 2009.  Sacramento is down to 2-3 months of inventory, and in some areas, less than 1 month. 

What does that mean? 

All of you who said, "Housing Shortage," get an "A"!  Buyers are out in droves attempting to take advantage of Uncle Sam's First Time Homebuyer Tax Credit, and sellers are hunkered down in their fallout shelters, waiting for the dust to settle.  Here, we apply a little Economics 1A, the Law of Supply and Demand, and guess what happens...bidding wars, rising prices, and buyers who need to "think about it" are consitently disappointed. Buyers, if you want to buy a Sacramento home, you have got to move quick, and you have to move with purpose. 

      -Have your preapproval in hand when you meet your agent for the first time

      -Know what you can afford, know where your downpayment is coming from, and understand that there are closing costs for your new mortgage loan. 

      -Have a good idea of what you want your new home to look, and feel like, and what about our new home is most important to you. 

      -And pick a Sacramento Real Estate Agent who you mesh with, but is also willing to tell you what you don't want to hear!! 

If you do these things in advance, it will save you a lot of frustration, anxiety, and time!  And if you are looking for Sacramento Real Estate Agent with these qualitites, Give me a call!