It has been a good Christmas Season. I just got back from two days away visiting family in the Sierra foothills. Cold, but no snow. Warm inside with great-grandparents, grandparents (me included), parents and children all gathered for the holiday fun and joy. Lots of good food and love in several helpings. I got my share of both.

Back to work now. I am looking forward to a busy week before the New Year rolls in. This used to be considered a dead time in real estate. Not anymore. With the local market being dominated by lender controlled short sales and REOs and buyers hungering for good properties or, at least, well-priced properties the market in Fremont, Newark, Livermore, Pleasanton, Union City, Hayward, San Leandro, San Lorenzo and all of Alameda County is fast moving, vibrant, and challenging for buyers. Buyers who are properly approved for necessary financing, well coached by their Realtor and perseverant will get the home that meets their needs.

My long-time friend, Don Signer, has set up a web page and started a blog. The first entry makes me sad. Don is the owner of Signer Buick-Cadillac in Newark, Ca. The only Buick-Cadillac sales point ever in the Fremont, Newark, and Union City area. I was manager of a bank in Fremont when I first met Don. I think it was 1982 or 83. Don, with a partner, was opening up a new Buick dealership in Fremont. It was a time when foreign-made cars sold strongly and American-made cars did not. (Some things never change.) Don was frequently required to answer questions about the wisdom of opening a Buick dealership. He had been raised in a family that sold G.M. cars. He believed in the brand. He stayed true to his beliefs. His business succeeded. He bought out his partner. He moved to a new, larger location for his dealership. He also added Cadillac to the Buick line of cars. 

Don succeeded. He made a living. He became part of the Fremont community. He became active in the Chamber of Commerce. He has been president of his Rotary Club. His roots are planted in our community. Fast-forward to the present. We all know that G.M. has had its share of problems. G.M.’s problems have caused problems with many other business and individuals across our nation. G.M. decided that Signer Buick-Cadillac could no longer be a G.M. dealer. 

Whether it’s loss of a house due to foreclosure, loss of a job due to a business trying to cut expenses, or the total loss of a business, itself, our economy has been unkind to many in the last few years. The City of Newark, Ca. will suffer the loss of sales tax that was generated by Signer Buick-Cadillac. The employees who have lost their jobs will no longer have the salary that was paid by the dealership to spend in Fremont, Newark and Union City.

Check out Don’s site at www.DonSigner.com.

So…how does this relate to real estate in Fremont, Newark, Union City or any other nearby towns…Pleasanton…Livermore…San Ramon…Danville…Milpitas…and others? Don is a homeowner. Many of his employees are homeowners. It is naive to think that, among all those who are directly affected by the closing of Signer Buick-Cadillac that no one will have personal financial difficulties due to their job loss. Maybe someone will sell their house that they can no longer afford. Maybe someone else will be subject to a short sale, or worse, a foreclosure.

My best wishes go out to Don and to all of his employees.

Procrastinate:  to defer action; to delay: to procrastinate until an opportunity is lost.

Procrastinator or smart buyer? Smart buyers don’t procrastinate. They wait for the market to hit bottom. They wait for prices to get as low as they are going to go. Then they buy their house and ride the tide of increasing value as years roll by.

Is there anything wrong with that plan? Well, there is the obvious fact that you will not, cannot know when prices have hit bottom. No one rings a bell at the bottom of the market. Home prices may have already hit bottom. Hindsight will tell us. By that time, it will be too late. Then again, maybe prices will go down even more from the surprisingly low levels of today. Do you feel lucky?

But is price the only factor you must take into account when buying a house?

Interest rates have risen lately. The increase in the cost of financing can negate a price reduction. So now, you can gamble that prices continue to go down and you can gamble that interest rates go back to the lowest levels in many years…and stay there until you are ready to buy. How lucky do you feel?

You can also gamble that the attractive income tax credits that are currently available will still be there when you are ready to buy. What tax credits? Federal tax credit of up to $8,000. California tax credit of up to $10,000. Applications for more than the $100,000,000 that was allocated have already been received for the State credit, so good luck with that one. Even if they are not all approved, do you think you have a chance at getting a slice of that pie? If you procrastinated on making the purchase of a brand new home from a builder because you expected the prices for newly built homes to go even lower…well, you may have lost that gamble. Keep waiting and Nov. 30^th will pass and you will miss the chance for the federal credit.

Procrastination…gamble…there are those words again.

If you are planning to buy in Dublin, Fremont, San Ramon, Newark, Pleasanton, Livermore, Newark, Union City or most places in the Bay Area, don’t procrastinate. Real estate values may have bottomed out.

The California Association of REALTORS®, through its Housing Affordability Fund, is offering a new Mortgage Protection Plan. What is the Mortgage Protection Plan? The Plan offers a combination of involuntary unemployment, accidental disability and accidental death protection for qualified first-time home buyers.

Through the program, first-time home buyers who lose their jobs or become accidentally disabled may be eligible to receive up to $1,500 per month for up to six months to help make their mortgage payments. A qualified co-buyer can also participate in this program for a reduced monthly benefit of up to $750 per month for up to six months in the event of a job loss or disability. In addition, the program offers a one-time $10,000 accidental death benefit.

Cost??? Nothing, nada, zip, zilch! This is an insurance program. If the home buyer is granted an insurance policy, the insurance premium is prepaid for one year by the CAR Housing Affordability Fund. The CAR ‘s Housing Affordability Fund is dedicating $1 million toward it Mortgage protection Program, and estimates that as many as 3,000 families will benefit from the program.

An applicant must:

·        Be a first-time buyer who hasn’t owned a home in the last three years;

·        Open and close escrow between 4/2/09 and 12/31/09;

·        Purchase a primary residence in California;

·        Be represented by a California REALTOR®; and

·        Be a W-2 employee (i.e. not self-employed) but cannot be a sole proprietor, partner of controlling stockholder in the business in which you are employed, or a dependent of a sole proprietor, partner of a controlling stockholder in the business in which you are employed.

There are no income or home price caps under this program.

Home buyers must apply through a California REALTOR®. The REALTOR® will submit the completed application to CARHAF of the home buyer’s behalf. The application can be downloaded at www.carhaf.org.

For a program Q & A click this link.

So…if you are looking for a Fremont home, or you are doing your real estate shopping in any of the areas around Fremont—Livermore, Pleasanton, San Ramon, Newark, Union City, Danville—the Mortgage Protection Plan will help ease your mind.

If you answered the above questions by saying “A long sale” you are wrong. A short sale IS a long sale! (Of course, we are talking about real estate, not stocks and bonds.) When I say long, I mean as in a long time…months, in fact.

Some time back, I told my wife that I was writing an offer for a client on a short sale. “Great”, she said. “That means that you will get paid more quickly!” Wrong! She thought short sale meant quick sale. In fact, I wrote a blog about that experience.

After three months, the listing agent told me that the lender would accept my buyer’s offer. Problem was that the market had been declining, and was showing no signs of halting its decline, and my buyer was not willing to honor a three-month-old price. The lender would not accept my buyer’s revised offer. Bad move by the lender. The property stayed on the market for another three months and finally sold for the amount of my buyer’s revised offer.

That was then and this is now…and nothing has really changed in the real estate short sale world. Our local paper, The Argus, carried an article today about short sales. It is a good primer for someone to whom short sales are a new concept.

My experience with short sales is that each is different. New rules are being written and new procedures are being created to deal with the economic realities of sellers who cannot sell their houses in a normal manner because the value of the property is less than what is owed against it. The capability and experience of the agents representing either the seller or buyer greatly influences the outcome of the transaction. The patience of the buyer, who will not know if their offer is accepted for weeks or months, often runs out. Buyers often find alternative properties before the receive acceptance of their short sale offer.

Short sale…part of the new world of real estate.

Mortgage rates have been low for a while. They remain low. Unusually low. Attractively low. You don’t really expect them to stay this low forever…do you?

A recent article in The Business Journel, covering the Triad Area of Greensboro and Winston/Salem , North Carolina stated that ” Freddie Mac says the average 30-year fixed-rate mortgage fell to 4.78 percent this week from 4.85 percent last week. It is the lowest 30-year rate since Freddie Mac started its weekly survey in 1971.” Wow!

I used to be a bank manager. Back in 1968, when I started my banking career, we offered rates higher than what are available today. These are historically low rates, but they will not last. Last Friday, Jack Koskinen, interim chief executive of Freddie Mac, said that home loan rates are near the bottom and any further decrease will be small. Mr. Koskinen commented on mortgage rates after he attended the meeting between President Obama and the CEO’s of the financial services companies no Capitol Hill.

So, if mortgage rates are near the bottom, what will happen next? Do you think the will simply stay low? Or do you think rate might move up? If you are planning to make that long awaited plunge into the Fremont, Ca. real estate market and buy your first home, this may be the best time to do it. If Pleasanton real estate is on your mind, this is a great time to get serious about that larger home that you have always wanted. If you are hoping for a Newark, Ca. home that is just across the Dumbarton Bridge from your Silicon Valley job this could be the opportunity that you are awaiting.

For real estate opportunities in Livermore, Hayward, Dublin, Milpitas, San Leandro, San Lorenzo, Danville or San Ramon…really, anywhere…you may regret your procrastination if you do not act before rates move up.

Maybe you have already heard this news. In fact, I would be surprised if you have not. I think it is still worth repeating because it is so significant for so many potential buyers. In fact, this can make the difference between potential buyers and actual buyers.

The federal government is offering to help you buy a house! What? Yes…a credit on your federal income tax, up to $8,000, for buying a house!

 Of course, there is a hitch…o.k. several hitches.

The first is that you need to be a first time home buyer. Who is that? Someone who has never owned a home (duh!) or, for the purpose of the credit, someone who has not owned a home in the last 3 years. Listen up, you astute people who sold at the top of the market and have been renting ever since. Now is the time to become an owner again. For married couples, neither can have owned in the last 3 years.

There is a limit of $8,000 or 10% of the purchase price of the house. Of course, in the San Francisco Bay Area where I live and work, the maximum credit is pretty much a sure thing!

Do you have to repay it like the previous $7,500 “credit” that was offered last year? NO! No repayment is required as long as you keep the house for at least 3 years.

Don’t dawdle. This opportunity runs out in a few months. You must CLOSE ESCROW by Nov. 30, 2009.

 There are also income limitations. If you earn over $75,000 annually ($150,000 for married filing jointly) the credit phases out until it disappears completely at the $95K ($170K joint) income level.

Of course…CHECK WITH A TAX PROFESSIONAL  for the accuracy of this post and additional details. There are more details. Not everyone will qualify.

For those who do qualify, this is one more reason to buy a home. Low interest rates, reduced prices, good inventory levels, the ability for a buyer to negotiate, a federal tax credit…what are you waiting for?

If you would like to take advantage of the wonderful opportunity for buyers in todays market…in Fremont, Hayward, Livermore, Danville, Newark, Dublin, Hayward, San Leandro, Union City, San Lorenzo or anywhere in the Bay Area, call me.

My local newspaper reprinted Martin Luther King, Jr’s famous “I Have A Dream” speech today. Here is the on-line version from my paper in which the YouTube video of King delivering the speech is included. Is is slightly less than 18 minutes long.  http://tinyurl.com/9cryep
What a wonderful way to revisit an event that helped to transform our nation…and how wonderful it is to be alive to see history being made - then and now.

My real estate sales team has a listing that is a condo complex in San Leandro, Ca. There are 14 units, of which 5 have been sold.

Lenders have long had a guideline that any given condo complex must be more than 50% owner-occupied in order to achieve the acceptable risk level for making a loan for a property in that complex. The theory is that homeowners will maintain their properties for their own self interest - to protect their investment - while non-owner occupants (renters) will not. The non-owner occupants have no vested interest in maintaining the property. While they live in the property, they want it to be - well - livable. But when they move out, there is no residual value for them. They are gone and the property is left behind. If it has declined in quality or value during their occupancy…oh, well…not their problem. An owner wants to see property value increase. A tenant doesn’t care because the tenant does not share in the increase.

Why is that important to a lender? The property is collateral for the loan. A property that is well maintained and properly cared for is likely to increase in value. A property that is neglected or abused is more likely to suffer in value. Lenders do not want their collateral to decline in value. It increases the risk for their loan.

That is a long explanation to get to my point. Lenders are reluctant to make a loan to a buyer who wants to buy in the complex that we are selling because it is below 50% owner occupied. Do you see the problem? No loan because the complex has only 36% owner occupancy. But owner occupancy cannot increase unless we can get loans for buyers who are interested in living in the complex?

Fannie Mae and Freddie Mac are reportedly considering changes in their policies so that they would consider builder owned units to be owner occupied for the sake of the important ratio described above. The industry needs that change. We need that change!

Are you a real estate investor? How many properties do you own? Do you have a mortgage on these properties? Well…if you have 4 or more mortgages, then you better be ready to write a check for the full amount of your next purchase. Yes…it does not matter if your credit is good and you can afford another loan…current mortgage lending parameters exclude anyone having 4 or more mortgages from additional mortgage loans. The lenders are afraid of putting too many eggs in one basket. Yea…the same lenders who would have given you a 100%, stated income loan a few years ago will not lend to a well qualified investor now if that investor already has 4 or more mortgages. That is the ridiculous straits in which we find ourselves now because of the excesses of recent years. Loans are hard to get. Even people who can and would repay the loans are having a hard time borrowing money. We know that most investors need to borrow to fund their real estate purchases. So, if loans are not available, purchases stall and the ripple effects of our economic crises continue to spread.

Fannie Mae and Freddie Mac are supposedly condsidering lifting, or in some way modifying, the 4 loan maximum rule. A change cannot come too soon!