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While sometimes it feels natural to focus on life’s challenges and difficulties, I’m grateful that the Thanksgiving Holidayis upon us.  For me, Thanksgiving is at rue reminder about all that I have to be thankful for. From my family to yours Iwish you all a Happy Thanksgiving.

As it turns out, I’m thankful for all the first time home buyers who, according to a report released by the National Association of Realtors®, have represented 47% of buyers this year.  This surpasses the previous high record of first time purchasers set back in 1991.This can best be illustrated in data show in these graphs just released by Zillow.com. 

The first graph is the San Francisco Metro Area and includes San Mateo, San Francisco, Alameda and Contra Costa Counties.

The second graph is Santa Clara Metro Area comprising Santa Clara and San Benito Counties.

It’s clear that the housing recovery for the bay area began at the beginning of 2009 and continues to progress.   It’s also clear that first time buyers are critical to housing and a general economic recovery.

Why? Because they absorb excess inventory created by the high number of financially stressed homeowners and resulting foreclosures.  The research confirms that the current high level of first time buyers compares to the recession in 1991,where the same dynamic played out as first time home buyers started the chain reaction that led the nation out of recession.   The combination of tax incentives, record high affordability, low interest rates and pent up buyer demand has led to a high level of sales which began earlier this year.  Economists would also credit the FED with suppressing any immediate rise in interest rates affecting home mortgages while the economy is still so fragile.  

The survey reflected that the median age of a first time home buyer is 30. First time buyers are being realistic about thelong term nature of their investment by planning to live in their homes for atleast ten years.  Nationwide, 78% of the homes purchased were single family homes.

Of all the first time buyers, 96% choose a fixed rate mortgage.  61% of first time buyers used their savings as a down payment while 22% received down payment assistance as a gift from family.  This tells us that saving for a down payment is back in vogue.

And no surprise here, a staggering 84% of first time home buyers are using the Internet to find their new home.  

Reflecting the complexities of the market,85% of successful home sellers used a Real Estate Professional to sell their home.  The actual number of homes sold without buyer or seller representation was a record low according the most recent survey only 6%.  

If you have an interest in Bay Area homes you will find what you are looking for at our website, www.AboutBayAreaHomes.com.  

There you will find links for homesearch, listings for bank owned and short sales, home loans, market activity reports, home seller strategies, staging and decorating, my book "Let's Make a Deal, The Insiders Guide to Buying and Selling Real Estate" and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email mefor a prompt response.

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What do the two homes have in common are more than you might expect.  They both sit in a quiet residential neighborhood on the peninsula.  They both share the same number of bedrooms and bathrooms and the square footage and lot size are almost identical.  They even have similar upgrades and both are presented to sell…… And there is more, these homes are on the same street as a matter of fact they are next door to each other.  What they don’t have in common is what makes this story so compelling.

While this neighboring home has been on the market close to 180 days and has two price reductions totaling $40,000 and still remains unsold.

Essentially the two homes are virtually identical in every way and both sellers have done a great job with presentation…so what did the seller with the unsold home do wrong? …or asked another way, what did the seller with the pending sale do that the neighbor didn’t?  There is one glaring exception to their similarity; one seller is ready to move on and the other is not. 

It turns out the one difference was in the original asking price.  Markets are constantly evolving and the best strategy a seller can follow today is to offer the home for sale at the bottom of the market value price range. Remember, both homes have location, upgrades and presentation going for them, however only one seller has priced correctly.

A close look at recent sales indicates a market value range from the low to mid$800’s.  The home that is sold was priced just under $800,000 while the unsold home started out above market value at nearly $900,000 and has two price reductions totaling $40,000.  Frankly, it is still priced to high.  When homes are overpriced the seller ends up with one of two things, no offers or low ball offers. 

Of course that is exactly what a seller doesn’t want!

When it is all said and done, I suspect that the unsold home will either be taken off the market or will end up selling for less than the neighboring ouse did.

Asa seller, how do you learn something about the market, considering the sellers mistake? First, you select an agent that you trust, an agent that welcomes your business, understands current market conditions, has a written marketing strategy and keen negotiating skills. And second, by listening and heeding the advice of your agent, especially when it comes to presentation and asking price. In today’s market the highest selling price goes to sellers that present their homes in market ready condition and price them right in the first place.

Remember,it’s not the seller, or the agent but the market that sets the selling price.  There is a big difference between pricing your home to sell vs. pricing to have it for sale.  

Agents that are market experts won’t do their clients the disservice of overpricing.

If you have an interest in Bay Area homes you will find what you are looking for at our website, www.AboutBayAreaHomes.com.  

There you will find links for homesearch, listings for bank owned and short sales, home loans, market activityreports, home seller strategies, staging and decorating, my book "Let's Make a Deal, The Insiders Guide to Buying and Selling Real Estate" and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email me for a prompt response.

First, the Tax Credit-As I mentioned in myblog and video last week, the Federal Tax Credit has been extended at expanded to include not only first time buyers but also move up buyers that have been in their homes more than five years.  This chart details the old and new programs and can be found under Quick Links on our home page at www.aboutbayareahomes.com.

Today I will focus on the forward indicator of market momentum, the “Pending Home Sales Index”.

As reported by the National Association of Realtors®, the Pending Home Sales Index posted its 8th consecutivemonthly gainin September nationwide.

The index now stands 21% higher than it did one year ago and Pending Home Sales are now at their highest levels since December 2006.

A Pending Home Sale is a home under contract to sell, but not yet closed. 

The following Pending Home Sales Reports are taken from our October Market Metric Reports available at www.bayareamarketmetric.com. 

These graphs cover a two years period and as you can see below, San Mateo County and Santa Clara County Pending Home Sales are at their highest point in the past two years. 

As seen in these graphs, Alameda and Contra Costa Counties are reporting a steady number of Pending Sales at an elevated level when compared to two years ago. 

When the Pending Home Sales Index rises, it tells us that market activity has picked up.  October’s data confirms what we’ve been noticing since February — the Buyers Market is coming to an end.

With more homes under contract in the marketplace, home buyers typically face one or more of the following:

  1. Competitive, multiple-offer situations
   2. Reduced purchase price leverage over sellers
   3. Fewer seller concessions

Therefore,if you’re planning to buy a home in the next several months, know that the8-month increase in Pending Sales has lead to an increase in closed sales which in turn results in higher home prices and reduced  affordability.

Further evidence can be seen in this recent Case-Schiller Report.

If you intend to buy while rates are low and affordability factors are still favoring buyers, you should be actively working with an agent now.  If you are thinking of selling but have been holding off until the market was showing clear signs of improvement now would be the time to talk with your agent about preparing to list your home.If you have an interest in Bay Area Homes you will find what you are looking for at www.AooutBayAreaHomes.com.  Quick Links is visible when the page opens.

Quick Links 

There you will find links for home search, listings for bank owned and short sales, home loans, market activity reports, home seller ideas, staging, my book "Let's Make a Deal, The Insiders Guide to Buying and Selling Real Estate" and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email mefor a prompt response.

As it stands right now the highly successful $8000 tax credit for first time home buyers is set to expire on November 30th.  The Halloween Treat is that Senators have agreed to extend the $8,000 first-time home buyer tax credit.  Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The administration has indicated strong support for an extension of the tax credit as well.

And adding to the “Treat”, the new plan would offer a $6,500 credit for repeat or move-up home buyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing primary residence between December 1, 2009 and April 30, 2010. Buyers wouldhave until June 30 to close on their new homes.

There is an $800,000 price limit on all homes eligible for the credit.  Adding more to the Treat is that more buyers would be eligible because income limits for all buyers would rise to $125,000 per year for individuals and $225,000 for married couples.  That’s considerable more that the current program allows, the limits are $75,000 and$150,000 respectively. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

Remember,this legislation has not yet passed, but with the Senate’s approval, there is every indication that an enhanced Tax Credit Extension will be approved.  I will be sure to keep you informed as i tmoves through Congress toward approval.

And another much needed “Treat” for Home buyers: President Obama is expected to sign a resolution passed late Friday by Congress extending the current limits for Fannie Mae, Freddie Mac, and FHA loans through 2010. The limits were set to expire at the end of this year.

The limit remains at $729,750for Bay Area Counties throughout next year. T his is expanded limit is especiallycritical for “high cost” areas such as the Bay Area, where more than 80 percent of all loans are financed by Fannie Mae, Freddie Mac, or FHA.

I’m committed to being available to meet the real estate and home financing needs of my clients.  If you have an interest in Bay Area Homes you will find everything you need at our online resource center, www.AboutBayAreaHomes.com. 

Just look under Quick Links on our homepage. There you will find links for home search, listings for bank owned and short sales, home loans, market activity reports, strategies for home sellers, staging and presentation, my book, “Let’s Make a Deal, The InsidersGuide to buying and selling Real Estate” and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email me for a prompt response.

If you have an interest in Bay Area Homes you will find what you are looking for at www.AboutBayAreaHomes.com.  Check out Quick Links on our homepage. 

Quick Links
Search All Bay Area Homes For Sale
Search Bay Area Bank Owned and Short Sales Only
Bay Area Market Activity Reports by County
Rent vs Own Calculator
Annual Percentage Rate Calculator
Our Home Loan Center
For Sellers Only
Home Staging Services
Mobile Notary Service
Free PDF Copy of Russ Boyd's Book
Intero Foundation Information
About Our Team

There you will find links for home search, listings for bank owned and short sales, home loans, market activity reports, home seller ideas, staging, my book "Let's Make a Deal, The Insiders Guide to Buying and Selling Real Estate" and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email me for a prompt response.

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Over the past several weeks I have been asked about several recent media stories surrounding the real estate and mortgage market. 

The most asked about topic has been the expiration of the $8000 Federal Tax Credit. And yes, what you have heard is correct; it is set to expire on November30, 2009. Effectively, that means that unless you are in escrow now your purchase will likely close after the expiration date.  Will it really be gone? 

From all the data I have seen, the credit has contributed to the stabilization of the real estate market and itseems very doubtful to me that congress and the administration will let it expire.  Every trade group that has anything to do with housing is actively lobbying for it to be extended.

Another critical piece of the housing market stabilization, especially here in the Bay Area has been the “temporary”increase in the “high cost area” conforming loan limit to $729,500.  Yes, you heard me right, “temporary”.  Without going into all the legislation that brought it about, the $729,500 loan limit was made as a “temporary” limit and will expire at the end of the year. 

Again, this been instrumental for stabilizing housing in the Bay Area market and every trade group is lobbying for the increase to be maintained.

In a blog a few months ago I spoke about the

Theplan, which is free to the buyer, provides up to $1,500 per month, for six months, to help make their mortgage payments in the event of a lay-off. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.  This program, which to dateas issued hundreds of policies, is set to expire 12/31/09. 

If you plan on closing a purchase transaction before the end of the year, talk to your REALTOR® for details.

In another blog post earlier this year I shared with you a warning about “foreclosure rescue” and “loan modification”scams.  One of the warning signs was if the person or organization offering the assistance wanted fees up front.

Currently, the California Department of Real Estate is investigating over 1300 complains and has issued hundreds of“cease and desist” orders.  Most of the scams include the payment of advance fees. 

This legislation, which was effective the day it was signed by the Governor, prohibits the collection of advance fees from anyone offering loan modification or foreclosure rescue or forbearance as a service.  Keep in mind “all persons” includes real estate agents or brokers and attorney’s. Advance fees cannot be collected, period.

And, good news for those that have mortgage loans in excess of $1million. According to an article in Forbes magazine the IRS issue a memo that concluded that a taxpayer can deduct interest on the first $1.1 million of a home mortgage--$100,000 more than earlier legal findings allowed.  The article quoted Kaye Thomas, a tax lawyer who publishes a tax guide at www.fairmark.com who stated “the affected homeowners could save $3,000 a year or more. Moreover, taxpayers can file amended returns for the past three years and claim thousands in refunds.” 

So, if this applies to you, I suggest you contact your tax preparer. 

If you have an interest in Bay Area Homes you will find what you are looking for at www.AboutBayAreaHomes.com.  Check out Quick Links on our homepage. 

Quick Links
Search All Bay Area Homes For Sale
Search Bay Area Bank Owned and Short Sales Only
Bay Area Market Activity Reports by County
Rent vs Own Calculator
Annual Percentage Rate Calculator
Our Home Loan Center
For Sellers Only
Home Staging Services
Mobile Notary Service
Free PDF Copy of Russ Boyd's Book
Intero Foundation Information
About Our Team

There you will find links for home search, listings for bank owned and short sales, home loans, market activity reports, home seller ideas, staging, my book "Let's Make a Deal, The Insiders Guide to Buying and Selling Real Estate" and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email me for a prompt response.

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I’ve always tried to keep my blog posts and videos focused on topics related to real estate and mortgage topics that are intended to provide information to you.   Today I want to share something with you that we do here at Intero that makes me especially proud.

Although, as I think about it, anything that benefits the communities where we live is really is about you as well.

What I’m talking about is the InteroFoundation. Now you may never have heard of theIntero Foundation and the truth is, neither had I before we joined the Intero Team about a year ago.

You see, it was our intent to affiliate with a real estate company that was different.  Now different isn’t always better, however, we wanted to partner with an organization that not only professed values but actual lived the commitment.  As it happens, one of Intero’s stated values is commitment – defined as; a pledge to do something, a state of being bound intellectually to a course of action.

As REALTORS® we earn our living by providing service to our client sand communities.  One way that Intero expresses this commitment is through the Intero Foundation.  Earlier this year I was invited to serve on the Intero Foundation Committee. 

The committee is made up of 16 Intero REALTORS®  that make a commitment to approve grant requests to qualified organizations that are diversified in size and mission, but all work to positively impact the growth and well being of children by enhancing their education, personal development and emotional well being.

I am proud and humbled to serve on the Intero Foundation Committee. 

As the Foundation representative of the San Mateo office of Intero,I personally had the honor, on behalf of the Intero Family, to present grants to three organizations in the amount of $33,000. And in the past couple of weeks the Foundation announced our most recent list of beneficiaries, which received $100,000 divided amongst them.

These organizations work to make our children – and our communities -- stronger: DreamPower Horsemanship, RapeTrauma Services, FamilyConnections, MyNew Red Shoes, Jacob’sHeart, BillWilson Center (SSJFY), SmallSteps Foundation, CommunitySolutions, and the Learning& Loving Education Center .

Since its inception, the Intero Foundation has donated $1,367,365to local non profit organizations that serve children. To give you an idea of all the non-profits The Foundation has been able to contribute to since its founding see the long list following this post or view by visiting Intero Foundation Information.

Each member if the Intero Family is proud to support these organizations.

So why does this matter to you? Well, there is an obvious connection:In the words of Interos President and CEO, Gino Blefari, “We are helping to make the place you call home (or are hoping to call home) better. And that matters. “ Gino goes on to say, “we are also expressing something about ourselves that might interest you: That we are a big organization, butnot toobig to remember that we are part of something still larger; that we take seriously our role as an organization rooted in a place; that we believe we must give in order to receive.”

If you share these beliefs, if it matters to you what your real estate company does in the wider world, then we have created something for all of us.

If you have an interest in Bay Area Homes you will find what you are looking for at www.AboutBayAreaHomes.com.  Check out Quick Links, which is visible when the home page opens, for information about home search, bank owned and short sales, home loans, market activity reports, home seller ideas, staging and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text oremail me for a prompt response.

A Brighter Today Foundation, Alum Rock CounselingCenter,Assistance League of San Jose, Assistance League of Saratoga, BarrettElementary School, Barrett HomeSchool & Community Club, Bay Area Alliancefor Youth Family Svcs, Bay Area Crisis Nursery, Bill Wilson Center (SSJFY),Buena Vista Auxiliary, Buenas Vidas Youth Ranch, Burnett Elementary School,Burton Elementary School, CampHope, CampTaylor, Carlmont Motivational Center,Children's Hospital Branches, Community School of Arts, Community Solutions,Concord Youth Center, Cross Cultural Community Service Center, CupertinoCommunity Services, Dan Herbert CampHope, Diablo Valley Assistance League,Discovery Counseling Center, Discovery Counseling Center SCIP Program, DownsSyndrome Connection, Estrella Family Services, Family Connections, FamilyGiving Tree, Franklin McKinley Education Foundation, Friends Together, FutureFamilies, Future Vision Mentoring, Generations in Jazz, Hellyer Elementary,Housing Industry Foundation, Interfaith Council of Contra Costa County, JWHouse, Learning for Life, Let Them Hear Foundation, Lincoln High School, LosPaseos Elementary School, Montalvo Arts Center, NAMI Contra Costa, NationalAlliance of the Mentally Ill, One Step Closer, Open Heart Kitchen, Organizationof Special Needs Families, PACE, Partners for New Generations, Project Help,Quilt Museum, Rape Trauma Center, Rebekah Children's Services, Role ModelProgram, San Francisco 49ers Academy, San Jose Education Foundation, SchmahlScience Workshop, Shelter Inc. of Contra Costa County, Silicon Valley EducationFund, Silvar-Charitable Foundation Trust, Small Steps, Social Advocates forYouth, Special Olympics, St. Rose Hospital Foundation, St. Joseph FamilyCenter, Starting Point Arts, Super Stars Literacy Program, The Salvation Army,The Wellness Community, The Wish Book, Upward Bound Youth, US Relief forUnicef, Via Services, Westwind Riding Institute.

Compete information available at www.AboutBayAreaHomes.com.

Mortgage information is available at our Home Loan Center.

View the latest Real Estate Market Activity reports at www.BayAreaMarketMetrics.com.

Search for all bay area homes for sale at www.AllBayAreaHomesForSale.com. Or for short sales and bank owned properties only,  search www.AllBayAreaBankOwned.com.

For sellers, we provide market analysis, home preparation and marketing services second to none.  Visit  ForSellers Only or just call me at 650325 7877 or email Russ@BayAreaTeam.com and we’ll design a plan specific too your needs.

Home Preparation and Staging information is at www.PicturePerfectHomeStaging.com.

To receive a PDF copy of my book, click Let's Make a Deal, the Insiders Guide to Buying and Selling Real Estate. For a signed hard copy,  just send me an email.

We invite you to view our growing collection of short videos, slide shows and links at www.OurTeamPiks.com.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients inSan Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties.Licensed as a Real Estate Broker by the California Department of Real Estate,01264240.

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Iwas discussing a refinance with a client the other day and she mentioned seeingan ad on a major website for a 30 year fixed rate loan with a rate of4.375%.  I told her that rate was way below the market rate of between4.75% and 5% and asked her about fees and points.  She told me there wasno mention of fees or points, and as you can see here that’s true, well sort ofanyway.  TheAPR or Annual Percentage Rate is displayed and that is the key to understandinghow to compare loans.

 Disclosingwhat is called the Annual Percentage Rate or APR was intended to give theconsumer a way to compare mortgage loan rates and costs between lenders and hasbeen required since the inception of Truth In Lending laws since 1968. Additional disclosure requirements were added in 1974 with the passage ofRESPA.

Disclosurerules were amended again with the recent implementation of the MortgageDisclosure Improvement Act of 2009. 

 Thetruth is, that only comparing the rate and APR is not perfect and should not berelied on solely when considering a mortgage loan.

 Now,back to my story.  Using an APRCalculator (which is available under Quick Links on our website, www.Bayareateam.com) I plugged in the numbers and found that in order to get theAPR disclosed in the ad, some $29,000 in additional fees are being added to theloan.  Also, in the small print the advertised rate is only good for loansup to $250,000. 

Thisis a case of where the APR is giving the right message, but my client wasshocked to learn that some $29,000 in fees and or points where being added toachieve this low rate.  Keep in mind there is no mention of points, justthe rate and the APR, which is all that is required by the law.

1. Remember, APR is supposed to HELP consumers, not confuse them. Clearly this lender is charging hefty fees or a combination of fees and points. This brings us to our next point ...
2. Points are tax deductible costs - most other fees are not. Charging high fees in lieu of points is not in the consumers best interest.
3. It’s common to see rates quoted with NO POINTS to make them look better to    consumers. However you have to know the total costs in fees and points to get the true picture.
4. APR is "pliable" - Certain fees are calculated into the APR calculation, others are not. Do not assume lenders don’t become “creative” with the "names" of fees to artificially lower their APR's.  I have a list of over 100 items that can be included in the APR calculation, however, the common names for fees that make up the APR include  processing, appraisal, underwriting, funding, mortgage insurance, admin fee, document preparation and of course points, to name a few. 
5. A good faith estimate must be given within three days of the application.  Be aware with the passage of the Mortgage Disclosure Improvement Act of 2009, lenders cannot charge  an application fee until after you have been provided a Good Faith Estimate.

Personally, the only fee my clientspay before the loan closes is the appraisal fee and that’s not until  theloan is approved and we are ready to lock the rate. To me, application fees arejust another deceptive way to lure a consumer in and tie them to the lender.

Numbers can be trickyand they can be used in downright deceiving ways at times.

That is why it isvital that you sit down and think your borrowing decisions through. You wouldbe well served by talking to an expert you can trust.  You can do theAnnual Percentage Rate calculation yourself on our website.  Look underQuick Links for the APR Calculator, which is visible when you open thepage.  Compare loans in different ways.

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Hereit is the first of October and the September Market Activity Results for theBay Area are posted to our website, www.BayAreaMarketMetrics.com. When we made the decision to provide market activity reports one of ourrequirements was that the data be available immediately at the end of themonth.  Our commitment to you is to havethe reports on our website by the second business day after month end.

Whileon the topic of market reports, The National Association of REALTORS® reportedthat Pending Home Sales were up for the seventh straight month.  NAR maintains what is called the Pending HomeSales Index and it stood at 103.8 up from 97.6. This is the highest readingsince July 2007. A reading of 100 is equal to the sales activity level in 2001.

At the regional level, pending home saleswere up in all four areas of the country, in both monthly and annualcomparisons.

The West saw the strongest growth, with pending home salesup 16 percent from the previous month and 22.3 percent from a year ago, to an indexreading of 130.5.

All of this iswelcome news because the rise in pending home sales shows buyers have returnedto the market and signing contracts, but sales are taking longer to close andthere is more than the usual amount of fallout because of long delays relatedto short sales and issues regarding complex new appraisal rules and recentlychanged disclosure requirements.  Iimagine many first-time buyers are rushing to beat the deadline for the $8,000first-time home-buyers tax credit, which expires at the end of November.

From what we see inthe market everyday is a housing recovery that is strong at some price pointsand weak in others.  In other words, it’slikely we’ll encounter some bumps and detours along the road to recovery.

A recap ofSeptember’s market activity reveals that the median price has flattened thepast couple of months except in Alameda and Contra Costa counties where the mediancontinues show strength.  Also, thenumber of closed sales has fallen, however the number under contract showscontinued strength.  This is likely dueto the factors already mentioned, i.e., delays with short sales, complex newappraisal and disclosure rules.

In all cases, thedays on market and supply of homes for sale are at the lowest point in pastyear.  Take a look at the comparisons inthe easy to read graph format at www.BayAreaMarketMetrics.com.  You may be surprised at what you see.  Reports can be customized to cities or neighborhoods,home size and price range.  For a custom report,just send me an email, russ@bayareateam.com.

Keep in mind,the market is very competitive under $900,000.  As a buyer or seller you want to be armed with information, have reasonableexpectations, and be represented by a knowledgeable and experienced agent.  An agent who welcomesyou as a client, values your business AND, an agent who is well qualified tohelp you navigate successfully through the process.

Tobe successful in this market a buyer needs to be represented by thevery best agent, an agent that welcomes you as a client, values yourbusiness AND, an agent that is well qualified to help you navigatesuccessfully through the process.

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And the competition is fierce.

 You’ve probably heard it from family, friends and co-workers, "You should buy a short sale or foreclosure. There are some great deals out there!" Or, your friend tells you, "I paid way below market!" And to some extent, these statements have merit.

Unfortunately from a practically point, many of these "deals" may not be available to you.

Remember, what we are talking about here are short sales (sales in which the seller's proceeds will be less than the outstanding mortgage debt) and foreclosures or bank owned (sales in which the lender is now the owner and seller). In other words, banks are in the position of having the final word. And this is where it gets interesting and complex.

Enter the age old market principles of supply and demand.  The terms, short sale and bank owned sales typically conjure images of a clearance sale, and for good reason. These homes usually carry attractive (often, overly-attractive) price tags. Banks have to consider the costs of holding an unsold, non-income producing inventory or, in the case of the short sale, increasing this inventory through yet another foreclosure. That’s how they justify their low pricing strategies. In reality, they’ve come to realize that buyer activity increases when homes are priced “as a good deal”.  This has created a market where distress homes are receiving multiple offers.  Of course many times this results in a selling price over the asking price.

The result; competition can be intense for lender-controlled homes; and (another old adage here) prices which appear too good to be true usually are.

So here we have buyers with no experience as homeowners looking at homes that in most cases have not been maintained or upgraded, involved in a bidding process for homes that will be sold in “as-is” condition. 

Did I mention that many times experienced investors are involved in the bidding process as well.  What an investor has that the typical buyer doesn’t is, a) experience, b) a different mindset, an investor only cares about investment potential and c) cash.

In a market where the sellers are, well real people, the primarily concern is about money and moving.  On the other hand, banks as sellers are more focused on speed. This is because, for lenders, time is money.

More and more we are seeing restrictions attached to distress sale offerings. For example, when a bank is the seller many times they require a pre approval through their own retail lending channel.  They may offer a small discount on fees if a buyer uses their retail outlet.  A buyer must be pre approved before successfully making an offer on any property today, however, to have your offer considered by a bank seller you will probably need to get pre- approved more than once. 

And, regardless of how it “usually” works where you live, a successful buyer will need to use the banks selected title company as well. 

Most banks stipulate that their listings be sold “As-Is” with "No inspections or home warranty’s provided".

And it’s becoming more common is to see "cash only" in the listing.  This is especially prevalent with condos, either because the owner  to tenant occupancy ratio doesn’t meet lenders requirements or when the HOA is in any kind of litigation or if the property is in poor condition.  

And buyer beware on this one; I know of several bank owned listings where the buyer can’t have access to the property because there is a tenant that is being evicted.  When this is the case the bank won’t even warrant that the property will be delivered vacant.  That means the buyer will inherit the tenant that is being evicted.

What does this mean for buyers?

It's not all bad news, of course. After a couple of years of declining home values in most areas of the country, prices have become very attractive, and not just for distress sales. Further, not all distress sales will be off-limits to the traditional buyer needing to finance the purchase.

Keep in mind, with attractive pricing comes competition. It helps to remember that a home purchase is a process, not an event, and that you won't necessarily win them all. Armed with information, reasonable expectations, and knowledgeable and experienced representation, however, you will dramatically increase your chances of getting that "deal."

To be successful in this market a buyer needs to be represented by the very best agent, an agent that welcomes you as a client, values your business AND, an agent that is well qualified to help you navigate successfully through the process.

If you are in the San Francisco Bay Area, my team and I have successfully represented buyer and seller clients in San Mateo, San Francisco, Santa Clara, Alameda, Contra Costa and Santa Cruz counties for the past 10 years.

Buyers, search for all bay area homes for sale at www.AllBayAreaHomesForSale.com.  Or for short sales and bank owned properties only, search www.BayAreaBankOwned.com.

For sellers, we provide market analysis, home preparation and marketing services second to none.  Just call or email me and we’ll design a plan specific too your needs.

For a complimentary copy of my book, Let's Make a Deal, the Insiders Guide to Buying and Selling Real Estate. Just visit our website, www.BayAreaTeam.com, scroll down and look for the section Read All About It, click on the link and you will have your PDF version.  For a signed hard copy, just send me an email

We invite you to view our growing collection of short videos, slideshows and links at www.OurTeamPiks.com.

See video here or read text below.

If you are still trying to decide whether to buy your first home, the convergence of affordable prices, motivated sellers, low rates and tax credits almost seem as rare as a celestial alignment of the sun, moon and stars and it just may be signaling that the time is right for you. In my life experience I have rarely seen such a blending of opportunity for home buyers. Here are just a few indications of how the market may be properly aligned for you right now:

1.The lowest interest rates in 50 years

You’ve heard it before and its well worth repeating. Interest rates are near all-time lows, hovering in the low to mid-5 percent range. In the late70’s there were cars lined up at gas stations and interest rates were in the 9’s and heading to 10 percent. During the 1980s downturn they jumped as high as 21 percent. In the early 1990s they reached 12percent.

If you're waiting for prices to fall even more you may want to think again. The government is running huge deficits and selling Treasury bills is how the debt is covered.

While these sales have gone well so far, investors may begin to feel skittish about purchasing government securities. It will only be a matter of time before the fed will have to increase the interest rates in order to convince investors to continue to purchase Treasury Bills. With Fed rate increases comes increases of home mortgage rates as well.

2. What if prices fall further?

A concern for most first-time buyers is: "Will prices drop even further?" Let’s put this in perspective, an interest-rate increase of one percent on a $500,000 loan will cost you approximately $110,000more in interest over the life of the loan.

A two-percent interest-rate increase, which some experts believe is possible in the next two years or so, will increase the interest cost approximately $230,000 over the life of a 30-year loan.

If you believe prices will go down, the question is by how much. It would take another 25 to 50 percent drop in values to run the risk of waiting.

While anything is possible, there is every indication that we are at or near the bottom. In some bay area markets the median price has increased over the past several months.

And it’s not just the bay area….sales are up, inventory is down and median prices are increasing in a wide variety of places.

Many of the hardest-hit areas are experiencing a comeback in sales --mostly driven by depressed prices and an abundance of distressed properties.The recovery is still in the early stages, however, there are concrete signs that the market is bottoming or may be starting to improve.

Excess inventory must be sold off prior to the market stabilizing in terms of price.

Once the excess inventory disappears, there will be more competition for a limited amount of supply. We see that happening locally now. This is how the next upturn in the market will begin. Multiple offers on first-time-buyer properties are a very positive sign for market improvement.

3. It's cheaper for me to rent!

Asa renter, your rent payments are paying off your landlord's mortgage,not your own. As a home owner, even if your house doesn't increase in value, each month you make a payment. By paying down the balance you accumulate wealth.

This is the equivalent of putting money in the bank each month. In contrast,renters lose additional wealth as their rental payments increase overtime.

Subject to tax law, homeowners receive a tax advantage by being able to deduct mortgage loan interest and property taxes. This is not available to renters.

A homeowner with a fixed-rate loan has locked in his or her mortgage amount for the next 30 years. If there is inflation, the homeowner pays off the loan with inflated dollars. Rents, in contrast, rise to keep pace with inflation. Who do you want to be in control of your housing expense, you or your landlord?

The longer you put off the decision to buy a home you may be leaving money on the table in two different ways. First, if interest rates increase,you will end up paying more over the term of their loan. Second, by waiting to take action, you will accumulate less wealth and experience less appreciation.

Plus, the longer you wait to start paying down a mortgage, the later the date will be that you retire that debt.

There's one other key issue to consider when it comes to getting off the fence and buying that first home -- the $8,000 tax credit. As of now the tax credit is set to expire on November 30, 2009.

While there is always the possibility that it may be extended, by delaying action, you miss possible buying opportunities plus the cost of higher prices and rates. All of that will add up to way more than $8000.00.

4. Timing

You must have heard the expression "buy low and sell high," right? It might even be your mantra.

As with any investment, it is ideal to purchase when prices are low rather than at their peak. However, if you are waiting to purchase a home because you believe that there will be better opportunities in the future you may be your opportunity of home ownership at risk. The time to "buy low" is right now.

Already there is a realization that prices may already be at their lowest point, and there is no question that buyers have jumped in and started buying. With dropping inventory the best deals will be the first target.

If you are a buyer or a seller, be sure you are represented by the very best agent, an agent that welcomes you as a client and values your business.

An agent that is qualified to help you navigate successfully through the process.

For sellers, we provide home preparation and marketing services second to none. Just call or email me and we’ll design a plan specific too your needs.

If you want to find that perfect home you can search for all bay area homes for sale at www.alllbayareahomesforsale.com.Or, if you are just interested in short sales and bank owned, search www.bayareabankowned.com.

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Be informed about real estate with your complimentary copy of my book, Let’s Make a Deal, the Insiders Guide to Buying and Selling Real Estate. Send me an email and I'll forward a link to you for the pdf version.

Visit www.ourteampiks.com to view our growing selection of slide shows, videos (some funny, some motivational, some thought provoking) and story's that make there way to us from people all over the world. We would like to share them with you!

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