A Cinderella Story…. Russ and Natalie’s 5 Month Wait for Their Home

This past year has been very competitive for home buyers at every price point on the San Francisco Peninsula.  Then again, it’s been a competitive housing market since the we hit bottom back in ’09.

I recall in 2006 when my husband and I bought our first place, a one bedroom condo in Foster City, prices were moving up fast.  As a Realtor and first time buyer on a budget, I knew that if my husband and I didn’t buy soon we’d be priced out of the market…including condos.  Then there was the crash and poof….prices started falling.

By 2009 homes prices had fallen as low as they could go and people were starting to feel confident in investing in real estate again.  That’s when Russ and Natalie, who had just had twins, needed a home.  We started our journey together and it quickly became evident – they weren’t the only people buying homes in the Bay Area.  I feel like a broken record in 2012 when I say – they wrote a whole bunch of offers back then and got out bid by higher offers, offers with larger down payments or cash offers with quick timing.  It was tough.  Susan and I take the punches with each client when they don’t get an offer accepted.  Yet Russ and Natalie were troopers, got up, dusted off and got back on the horse.  Sue and I truly wanted to hand them the keys to their first home before the twins started to walk.  And they were starting to walk!

Around Thanksgiving a home that was previously pending came back on the market. It was a tricky short sale that fell apart.  As they can do.  We showed it as soon as we could.  Russ and Natalie were so great about being open to possibilities, ready to get their hands dirty and build some “sweat equity”.  They saw the possibilities this particular home had to offer.  It’s funny. I know the home you think you will buy and the home you actually buy are often very different.  Each buyers journey is unique.  I know my first time buying was not at all what I expected.

Anyway, I digress.  It was the holidays and had this home popped on the market any other week – maybe we would have been outbid.  Instead Russ and Natalie wrote a terrific offer and with the help of The Caton Team their offer was accepted.

That’s when the hard work really starts on a short sale property.  The Caton Team was very fortunate to work with Shirley Krause, whom represented the seller during what proved to be an almost 6 month group effort.

It’s a long wait – for everyone – when buying or selling a short sale.  Just around the twins birthday in the Spring Susan and I had the pleasure of handing the keys to Russ and Natalie.  Yes, they waited 5 months to get their house!

Moral of this Cinderella Story, don’t give up. Not now. Not if you want to call our gorgeous San Francisco Bay Area home sweet home.  So now as the malls fill up with shoppers and homes are sitting on the market ignored – give us a call – you never know the possibilities until you try.

Thank you Russ and Natalie for working with The Caton Team.  Here is to many happy years in your lovely home.

Happy Holidays!

Curious about my own buying and selling experiences?  Although I am a Realtor by trade, I’m no different than you when sitting in the buyer or seller seat.  Enjoy my journey through homeownership at: http://ajourneythroughhomeownership.wordpress.com

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Thanks for reading – Sabrina

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SHOULD YOU BUY A HOME DURING THE HOLIDAYS?

Funny – I was just writing my own blog about our local real estate market when I came across this article from San Diego.  It’s not local – but it hits home – thought I’d share and add my two cents….

SHOULD YOU BUY A HOME DURING THE HOLIDAYS?

Once Thanksgiving is over, the real estate world starts to wind down for the holidays and it typically reawakens after the Times Square ball drops and resolutions come to life.

But if you’re a potential homebuyer who’s prepared to close in today’s competitive market, you may want to keep shopping while everyone’s waiting for spring, some real estate agents suggest.

The Caton Team has found that buyers on a concrete budget find great values if they are flexible during the holidays.  We’re ready when you are.

That advice may be especially relevant this year for consumers who have repeatedly lost out on deals because of a limited and continually decreasing supply of homes, but remain persistent. Buying intensity typically cools down at the start of fall through early January, which could increase the odds for those with more patience.

Related: Report: We’re in the midst of a housing recovery

Home sales have increased from October to November only four times since 1988, when DataQuick began to track home sales and prices locally.

In the other years, transactions have fallen from anywhere between 0.2 percent and nearly 26 percent. Home listings have dropped off from 3 percent to 11 percent during those months in the past three years.

“During Christmas, people will be focused on the holidays and nothing really happens,” said Ken Pecus, co-founder of San Diego-based Ascent Real Estate and 20-plus-year real estate veteran.

“The first week of January, the new mindset kicks in, resolutions kick in, and in the second and third week, people look at their taxes, and almost overnight, by the end of January, you have almost twice the buyers in the market,” Pecus added.

Would-be buyers historically have bowed out during the winter season because they are overwhelmed by holiday spending and commitments. There’s also the aversion of moving in the middle of a school year. Consumer interest typically picks back up again in the New Year and peaks in the spring.

Related: Demand for homes stays strong during the fall

Certain buyers may be well-served to buy during the winter because of sellers who must move because of:

• A job change or transfer.

• The possible sunsetting of the Mortgage Forgiveness Debt Relief Act, said Donna Sanfilippo, president of the San Diego Association of Realtors. The potential expiration of the law, which lets certain home sellers get tax relief on mortgage debt forgiven by lenders, has pushed home sellers scrambling to list and short sell their homes before the end of the year.

In some cases though, the rush to do that is unwarranted. Consult a tax pro to determine if short selling is right for you.

• The fact they’ve been waiting to sell their home for a long time and need to buy something quickly. If you can wait a little longer to sell your home and want to maximize your profit, then wait until the peak spring months.

Even with the expected holiday homebuying slowdown, buyers should know that the inventory level may still be a challenge.

Right now, there are more than 4,700 active listings in the county, down 11 percent from October and down more than half from the same time a year ago, based on numbers from the San Diego Association of Realtors. The current level marks at least a three-year low.

In the San Francisco Peninsula – inventory has been low all year, fueling multiple offers on homes and driving prices up due to competition outweighing supply.   There has been moments, for example in San Carlos we had 25 listings and Redwood City had 36 – for the whole city.  That’s not enough homes for the volume of demand out here.

Buyers also may deal with the challenges of bidding against cash buyers and investors, who can look more attractive than traditional buyers.

The Caton Team has witnessed Cash Buyers at all price points – under $500,000 to over 1,500,000.  Sellers have the opportunity to pick the best offer among several.  And sellers are being savvy – taking higher down payments when possible.  When The Caton Team prepares an offer, it is more than just price.

Their share of the homebuying market has remained strong. Almost 28 percent of total homes sold in October were purchased by absentee buyers, many of whom are investors. That’s up from 27 percent logged a year ago and in September.

Hovering near the peak, almost one-third of buyers bought with cash in October.

“I’m expecting 60 to 70 people at my open house,” said San Diego Realtor Miguel Contreras before a recent Wednesday showing at a property in La Mesa. “The property is a fixer, so it’s mostly investors.”

Sounds familiar in the SF Peninsula market.  Open houses visitors are strong, and often there is enough activity to warrant an offer day before the following weekend.  I’ve seen homes have one open house and take offers on Monday.  That’s a break neck pace if you ask me, and I’m a veteran.  My first time buyers can’t move that fast.  And with prices climbing, the early bird get’s the worm if he can’t process the information fast enough.

Related: Another hurdle for short sales

Contreras, who worked during Thanksgiving week, said he’ll make himself available throughout the holidays to cater to what he expects to be a continued interest from investors, cash buyers and traditional buyers.

The same goes for Cherilyn Jones, another local real estate agent. Last week, she was preparing for two new listings to come online. Her most common clients are first-time homebuyers and investors.

“The investors have not slowed down,” Jones said. “We get holiday freeze, but not for investor clients. It’s hard to find them properties because their criteria is very, very specific … and the deals are not as good as they used to be.”

Article By: Lily Leung

Last Thoughts…

In our 25+ years of local Real Estate experience, buying during the holidays can truly benefit buyers who’ve been outbid all year.  We’ve found homes for buyers over the holiday season that would have been snapped up in a hot second during the spring or summer.  As long as buyers are flexible and open minded – there is definitely some Christmas Miracles in the making this time of year.  Keep a look out for my next Cinderella Stories about Russ and Natalie and the home we found over Thanksgiving!

I read this article at:  http://www.utsandiego.com/news/2012/dec/01/does-it-make-sense-buy-home-during-winter/?page=2#article

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-cityå

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

 

New Short-Sale Program Offers Relief for Underwater Homeowners…

Please enjoy this article I found interesting….

The Fannie-Freddie program allows short sales for owners who are current on loan payments but are encountering a hardship that could force them into default.

WASHINGTON — Though there are still some snares and drawbacks for participants, one of the federal government’s most important financial relief efforts for underwater homeowners started operating Nov. 1.

It’s a new short-sale program that targets the walking wounded among borrowers emerging from the housing downturn — owners who owe far more on their mortgages than their current home value but have stuck it out for years, resisted the temptation to strategically default and never fell seriously behind on their monthly payments.

Industry estimates put the number of underwater owners across the country at just under 11 million, or 22% of all homes with a mortgage. Of these, about 4.6 million have loans that are owned or securitized by Fannie Mae or Freddie Mac. Eighty percent of these Fannie-Freddie borrowers, in turn, are current on their mortgage payments and meet the baseline eligibility test for the new short-sale effort.

Here’s how the program works and where the potential snares are. Traditionally short sales, where the lender agrees to accept less than the full amount owed and the house is sold to a new purchaser at a discounted price, are associated with extended periods of delinquency by the original owner. The new Fannie-Freddie program — designed by the companies’ overseer, the Federal Housing Finance Agency — breaks with tradition by allowing short sales for owners who are current on their payments but are encountering a hardship that could force them into default.

Say you are deeply underwater on your mortgage and recently lost your job or had your work hours reduced. Under the new program, you can contact your mortgage servicer and ask to participate in a Fannie-Freddie short sale for non-delinquent borrowers. You’ll need to find a qualified buyer for the house, typically with the help of a real estate broker or agent knowledgeable about short sales who will list the property and obtain an offer and communicate the details and documentation to the servicer. If the proposed short-sale package is acceptable, the deal would then proceed to closing weeks — or months — later.

Eligible hardships under the new program run the gamut: job loss or reduction in income; divorce or separation; death of a borrower or another wage earner who helps pay the mortgage; serious illness or disability; employment transfer of 50 miles or greater; natural or man-made disaster; a sudden increase in housing expenses beyond the borrower’s control; a business failure; and a you-name-it category called “other,” meaning a serious financial issue that isn’t one of the above.

Borrowers who take part in the new program can expect to rid themselves of the money-devouring albatross their mortgage has become — without going through the nightmares of foreclosure or bankruptcy — and to get a chance to start anew, better equipped to deal with the financial hardship that caused them to sell their house in the first place.

What about the snares in the program? There are several that participants need to consider.

•Credit score impact. Though officials at the Federal Housing Finance Agency are working on possible solutions with the credit industry, at the moment it appears that borrowers who use the new program may be hit with significant penalties on their FICO credit scores — 150 points or more. This is because under current credit industry practices, short sales are lumped in with foreclosures. According to Laura Arce, a senior policy analyst at the agency, the government is in discussions with the credit industry to institute “a special comment code” for servicers who report the new Fannie-Freddie short sales to the national credit bureaus that would treat participants more fairly on FICO scores.

•Promissory notes and other “contributions.” In the majority of states where lenders can pursue deficiencies, Fannie and Freddie expect borrowers who have assets to either make upfront cash contributions covering some of the loan balance owed or sign a promissory note. This would be in exchange for an official waiver of the debt for credit reporting purposes, potentially producing a more favorable credit score for the sellers.

•Second lien hurdles. The program sets a $6,000 limit on what second lien holders — banks that have extended equity lines of credit or second mortgages on underwater properties — can collect out of the new short sales. Some banks, however, don’t consider this a sufficient amount and may threaten to torpedo sales if they can’t somehow extract more.

By Kenneth R. Harney Distributed by Washington Post Writers Group.

I read this article at: http://articles.latimes.com/print/2012/nov/11/business/la-fi-harney-20121111

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Factoring in Commuting Costs

Great article I thought I would share…. Though banks and underwriters may not consider this additional cost of community, The Caton Team does. When we sit down with new buyers we talk about where they work and the cost of living in X, Y or Z.  We stopped using the lender approval as our price guideline for house hunting – instead we ask each buyer to determine their true monthly budget.  What they are spending on gas, transportation, utilities, other debt and lifestyle.  We then take the true picture of expenses to determine their comfort level on a mortgage payment and work backwards to find a house that fits that price and other elements.  Enjoy the article….

Factoring in Commuting Costs 

MORTGAGE lenders do not figure in a household’s likely commuting costs when weighing loan applications, but a recent study suggests that borrowers of moderate means would be smart to calculate these costs themselves before buying.

The study, published in October by the Center for Housing Policy and the Center for Neighborhood Technology, looked at transportation and housing costs in the 25 largest metropolitan areas. It found that transportation costs rose faster than incomes in every area over the last decade.

That has added to the financial burden shouldered by moderate-income homeowners, defined as households earning 50 to 100 percent of a metropolitan area’s median income. Transportation consumes 30 percent of their income, on average. Add housing costs to that and the combined cost burden rises to 72 percent.

“The impact is larger for moderate-income households,” said Jeffrey Lubell, the executive director of the Center for Housing Policy in Washington, “because everyone needs to get where they need to go and the fixed costs are the same for everyone. The lower you go down the income stream, the more transportation costs loom as a very big expense.”

The study also found that some metropolitan areas generally considered more affordable than New York become less so after transportation is figured in. For example in Houston, where housing development is more sprawling, transportation consumes 32 percent of income, compared with 22 percent in New York, which has a more robust transit system.

Mortgage underwriters sometimes look at a home’s location relative to where the buyer works, but in most cases a long distance between the two is an issue only if it suggests that the buyer isn’t actually going to live in the house, said W. Thomas Kelly, the president of Investors Home Mortgage, a subsidiary of Investors Bank in Millburn, N.J. Commuting costs vary too much to be figured into qualifying ratios, Mr. Kelly said, adding, “How do I say to a borrower, you don’t qualify because you live too far away from work?”

Scott Bernstein, the president of the Center for Neighborhood Technology in Chicago, argues that transportation costs are quantifiable enough that they ought to be factored into underwriting. And they were, during the first half of the last decade, in an experiment the center conducted jointly with Fannie Mae. Called a “Location-Efficient Mortgage,” the product was a contrasting proposition to the “drive till you qualify” strategy of finding an affordable home. The mortgage compensated borrowers applying to buy in areas with lots of transportation choices, and close to jobs and amenities.

“The bottom line for the borrower was that the location-efficient value would get taken into the underwriting ratio so that it would allow for more borrowing capacity for this income level,” Mr. Bernstein said.

Tested in a handful of markets before 2007, the mortgages were issued to about 2,000 borrowers and, based on the center’s evaluation of a representative sample, showed a very low default rate. But the experiment ended with the mortgage market collapse.

Or, as Mr. Bernstein put it, “The experiment was successful, and the patient died.”

Now the center is working with the Department of Housing and Urban Development on an online affordability calculator that will allow people to look by location at what their likely housing costs, with transportation, would be nationwide.

“Housing counselors can also use it to help coach people on how to pick locations, and it could help developers get a competitive advantage,” Mr. Bernstein said.

The national calculator could be ready by year’s end. Another calculator developed by the center, called Abogo (abogo.cnt.org), lets people plug in an address and find out what a typical household in that area spends on transportation.

By LISA PREVOST

I read this article here: http://www.nytimes.com/2012/11/25/realestate/mortgages-factoring-in-commuting-costs.html?ref=realestate

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-cityå

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina