Bailout for the Underwater Home Owner?

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In an effort to help the home owners who have continued to make their payments even though the home is currently worth less than what is owed, the federal government has launched its plan to allow FHA loan refinances for this group.

Many have felt that this segment of the market is being unfairly asked to burden the load while others get bailed out or just jump ship by walking away from their home.  While this does not solve the value imbalance (time will do that), it does allow the home owner to take advantage of the very low interest rates currently available.

These folks have been forced to pay the higher interest rates because they were denied the opportunity to refinance.  We have seen some as high as 12% on the adjustable roll-over loans.  Today’s rates are in the 4% range.  On a $350,000 loan (remember, these folks are still paying on the high purchase price) that makes a monthly payment drop from $3600 (P&I only) to $1670, a difference of nearly $2,000 per month!

In principal, we think this is a great idea.  If the banks can get this rolling many of the real estate related ills of our current economy will be lessened. 

  1. Conscientious homeowners will not be removed from the fruits of their labors.
  2. Investors will continue to receive their money.
  3. Banks will be saved the expense of foreclosure.
  4. Less foreclosures will be hitting the market.
  5. Real estate prices can stabilize as confidence begins to raise.
  6. The rest of the economy will follow as that confidence raises.

Of course, the questions remain as to whether:

  1. The government can manage this program successfully.
  2. The banks will administer and work with the program.
  3. Will those affected get the news and apply for the program?

To get another take on this issue you can click HERE to read an article in The San Francisco Chronicle.  And for more local news don’t forget the Discussions and News tab at Yuba Sutter Home Buys, or the Hot News icon at Yuba Sutter Homes and Loans.

Is the News Media Crying Wolf Again?

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We think they are!  Or at the very least exaggerating the negatives and minimizing or omitting the positives.  If you have followed the recent news trends it would seem that real estate has become the brunt of sensationalism again.

 Are negative things happening?  You bet; bad things happen everywhere and virtually all the time!  Does that mean the whole thing is going down the drain?  Even Chicken Little would have to scoff at that.  There are also many (we think more) good things happening.

Home prices are very low.  You can purchase a home ready to move into for less than you can have one built.  I’m sure we’ve all heard that buying a new home means you don’t have to worry about buying someone else’s problems, but a comprehensive home warranty solves that problem.  And the cost?  Zero, Zip, Nada, not one cent if you purchase your home through Yuba Sutter Homes and Loans.

Interest rates are at record lows.  Looking at the boards this morning I am seeing rates as low as 4% or below.  These are honest rates, not buy-downs or tricks with numbers games.  That means you can get into a $150,000 home with 20% down for a monthly payment of only $572.90 (PI only) per month!  That is LESS than you can rent a similar home for!  AND that is before figuring in your tax savings of purchasing over renting!  Want to look at other scenarios yourself?  Click on over to the financial calculators at http://YubaSutterHomesandLoans.com.

Inventory is good right now.  You can find just about any type or price home you can imagine.  They are there, waiting for you.  Some may require a little research, but hey, isn’t that what your Realtor® is for (or part of our duties)?  To see the huge selection for sale click HERE.  Call [530 315-2808] or email us to get you on your way now.

Are these just our views?  NO!  In fact, the Sacramento Bee just published an article with similar findings, and more.  Click HERE to read that article. 

For additional information check out these sources:  Yuba Sutter Homes and Loans; Yuba Sutter Home Buys; Homes in Yuba Sutter; Yuba Sutter Real Estate; the Discussions and News ; and of course keep coming back here to the Yuba Sutter Grapevine.

Avoid Five Mistakes Home Buyers Make

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While glancing through my sources of real estate news this morning I came across an article mentioned by the California Association of Realtors®.  It was published by the Wall Street Journal.  While it is based on national trends, I see the same patterns happening right here.

Remember, to help you avoid these and other potential problems contact your Realtor® when thinking about real estate.  If you are not already working with an agent may we suggest Yuba Sutter Homes and Loans.   At Yuba Sutter Homes and Loans you receive excellent value; things like FREE Home Warranty, free moving truck, free storage, free home security systems, and more!  And all with guaranteed performance, great savings, and excellent service!  Contact us for more information.  Email us with your questions on how you can get these great benefits and more.  For faster service, call 530 315-2808.

 According to the article (and my own observations) the most common pitfalls for buyers in today’s marker are:

  1. Trying to save money by not using a Realtor®
  2. Guessing what you can afford
  3. Letting emotion over-rule logic
  4. Forgetting about the neighborhood in your evaluation
  5. Making inappropriate offers because it is a “buyer’s market”

To get more information on avoiding these, or just to see what others are doing contact us.  To read the full article as published by the Wall Street Journal click HERE.

California Assembly Rejects Foreclosure/Modification Bill

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SB1275, a bill that would have required banks to hold off on foreclosure proceedings while they were negotiating loan modifications with a home owner was rejected this week by the Assembly.  This bill would have also required the banks to actually look at a loan modification before they could foreclose.  Needless to say, the banks have fought hard against this bill.

There are arguments for and against this bill.  Was it the cure-all?  Of course not.  Would it have helped?  Many think so.  So what do we do now?  I will try to keep you posted here.  Remember to write (or email or phone) your representatives.  This is the biggest single thing we can each do!  To read the full article published today by the San Francisco Chronicle click HERE.

To receive a free list of foreclosed homes in the Yuba Sutter area email us, or call 530 315-2808.  To see all homes currently for sale in the area visit Yuba Sutter Homes and Loans.  To read about local real estate news plus tips and techniques to maintain your home subscribe to our FREE monthly news letter Yuba-Sutter Real Estate.  You can also visit the discussions & news tab at Yuba Sutter Home Buys.

Realtors® Fighting to Extend the Anti-deficiency Laws

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Last year California signed into law protection for homeowners who lost their homes through foreclosure.  Is essence, the law prohibited lenders from suing displaced homeowners for the loss suffered in market value if the loan was purchase money.  This law closely resembled the federal law still in effect. 

In fairness to all homeowners in this time of economic crisis, Realtors® believe that this protection should extent to loans that were refinanced (often at the lenders urgings).  Often this money is used to improve the value of the home, or to make the home more in tune with living requirements.  This protection does NOT cover money pocketed by the homeowner!

There is currently a bill before the legislation to do just this; SB 1178.  Lenders are pushing hard to keep it from being signed.  The California Association of Realtors®, the National Association of Realtors® and your local Association of Realtors® are fighting to have this protection not only extended but made permanent.

I would like to ask your help also.  Contact the capitol to urge the signing of this bill.  The main talking points are:

  •  SB 1178 is fair. SB 1178 preserves the legitimate understanding between the homeowner and the lender when the property was originally purchased.
  • SB 1178 only applies to the amount originally financed, not any “cash out” that an owner may have borrowed above and beyond the initial loan.
  • SB 1178 is does not re-write existing contracts. The bill does apply to new suits brought on existing loans, even if the loans were made prior to the passage of the bill. 

For more information contact us or your Realtor®.  You can find much more information on line also; just Google (or Yahoo or Bing) SB 1178.  Remember, your Realtors® are fighting for you, and we can always use your help!

Follow this and other real estate news at Yuba Sutter Homes and Loans (click the <hot news> icon), Yuba Sutter Home Buys(click the <news & discussions> tab), or contact us directly by email or via phone at 530 315-2808.  Don’t forget to add this site as an RSS feed via the links below.

Getting Your Home Ready for Fall

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It may not feel like it today, but summer is beginning to wind down.  Cooler weather is coming and it’s time to do some of the annual home maintenance, before it gets too cold or wet. Preparing your home for the fall season, and cleaning up the yard, can prevent the unsightly mess you could be left with when spring comes along.

Clean out the rain gutters – Now is the time to get rid of anything left from last year, plus the dirt that accumulated over the summer.  Cleaning rain gutters isn’t that difficult of a task, it’s just a tedious one. An easy way to get rid of the junk is to use a high pressure hose.  Once you have gotten rid of all the debris, give your gutters a good shot to be sure the downspouts are all full open.  Tomorrow, after they dry, is the perfect time to apply that touch-up paint.  Not only will it look better, it can stop the rust and prolong your gutter’s life.

Take care of your pots and planters – If you’re like most homeowners, you have some planters or potted plants sitting around the yard. Before it gets too cold, be sure to empty the dirt out of any pots or planters and put them in a place where they won’t freeze. If you don’t empty or store your planters, there’s a good chance they will either crack or fall apart.  If you live where it doesn’t freeze but does rain a lot care might be called for to protect your plants from drowning.  Will they get too much water?  Will they drain properly?

Prepare for raking the leaves– Keeping your yard free of leaves is an important task for homeowners. If you have numerous trees in your yard and piles of leaves that you don’t take care of, you might find that your grass is dead once spring arrives. Leaves can smother your lawn and replacing a lawn can cost a lot of money, so it’s a good rule of thumb to get rid of the leaves in the fall.  Make sure your yard is free of obstacles and you have a plan for disposing of the leaves.  Some will compost them, other have them hauled off.  There are even companies that but them!

Weed and feed the lawn – The best time to weed and feed the lawn is in the fall. If you add weed killer in the fall, the weeds will store the poison in their roots during the winter season, and will prevent a breakout in the spring. By feeding your lawn with fertilizer in the fall, you are promoting healthy root growth, and this will help your lawn grow greener and faster in the spring.

Give your tools a tune-up– Once you have finished your fall maintenance chores, make sure you clean your tools and store them in a dry place so they will be in working order once spring arrives. Be sure to store metal shovels with the head upwards, as this will help detour rusting when it dries. Sheers need to be oiled up, wheel barrels should be left upside down and don’t forget to spray off the underside of the lawnmower.  Yes, I know, in the valley we use our lawn mower all year.  But this is a good time for that annual maintenance, while you are tending to the other items.

I am sure you have other tips.  Want to share them?  Want to see them in print?  Leave a comment below, email us, or go directly to our web site at Yuba Sutter Homes and Loans.

Why buy real estate?

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My faithful followers have read my comments about real estate as an investment.  Some newer readers might think this is just because I am in the business of assisting people with their real estate needs.  Even as the market corrected itself I have maintained that real estate is a good investment.

No, I am not crazy (no more than the next guy anyway) nor am I trying to fool anybody.  This morning Paul Klein, CEO of Point2 Technologies published his ideas on that very topic.  Rather than paraphrase his letter I am going to quote the entire thing for you here.  Let me know what you think.  Email me or click the links below.

Real Estate Investment Objectives:

Income (Cash Flow) – Real estate investments structured with enough down payment, will generate a positive cash flow. As time passes, in most markets, even a highly leveraged, negative cash flow property can turn into a positive cash flow investment.

Leverage – Through the use of borrowed money (OPM – Other People’s Money), combined with a small amount of money of your own, you can control real property. The best leverage most of us can obtain in the stock market is 50%. In real estate, it is not unusual to obtain 80%, 90%, and even 100% leverage. With leverage usually comes risk, and with risk comes
potential for investment reward.

Appreciation – It depends on the market. Real estate is a growth asset and often the largest part of the return is the equity gained through appreciation. 

Tax Benefits – Investors are allowed to write-off (within income limitations) all operating expenses, interest on loans secured by the property, property taxes, and the “non cash expenditure of depreciation.  Gain from the sale is treated as capital gain and investors have the option of exchanging which, if done in accordance with the tax laws, can result in no recognized gain, thus no immediate cash tax consequence.

Equity Build-up – This results from the periodic pay down of the principal amount of the loan. Even if there was no appreciation over the life of the loan, the property owner would end up with a free and clear property which generates rental income.

Said another way, real estate is the IDEAL investment (Income, Depreciation, Equity Build-up, Appreciation, Leverage).

To see some of these opportunities for yourself go to Yuba Sutter Homes and Loans.  Look around; many potential investments are there.  New or uncertain?  Give me a call or email for assistance (after all, this is my profession and my passion).

Don’t forget or news and discussion format at Yuba Sutter Home Buys.

Tips for a Quick Sale in Today’s Market

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Set your price carefully
Price it too high and buyers may not even look at it, too low and you’re cheating yourself. A Realtor® may give you a free market analysis if you ask. This gives you an idea of how your home compares with similar, recently sold homes in your area. The analysis should also include how much you might expect to earn after closing.  To get yours click HERE.

Don’t do major remodeling
Don’t get carried away preparing your home for sale. Pricey remodeling (items such as a new roof) may be big hits with buyers, but rarely is the cost covered by the buying price. When possible, stick with the simpler (and less expensive) options rather than major remodeling.

Make a good first impression
Curb appeal is important. Keep your lawn and other landscaping neatly trimmed, weeded and watered. Check the exterior of your home for signs of wear and damage, such as peeling paint, foundation cracks or loose shingles.  Evaluate and fix what is needed (but do NOT try to cover up defects).  Clean the outside of the house, including windows. Often suggested is  giving the front door a fresh coat of paint for that warm, welcome feeling. Adding a few flowers in the spring and summer, or keeping the walks cleared of leaves and snow in the fall and winter can be inviting to potential buyers.

Clean!
The obvious seller’s commandment: thou shalt clean. Remove all clutter and personal effects from every room, including closets. Have a garage sale with all the stuff you don’t want to move to your next home!  Paint walls and trim if necessary.  A neutral color palette might appeal to a wider range of potential buyers. Clean all windows, light fixtures and ceiling fans. Bathrooms should always be squeaky clean. Inspect and make any necessary repairs to the plumbing, heating, cooling and electrical systems. Highlight the bath and kitchen by selecting some attractive new towels, curtains or cabinetry knobs.  Decorating these two rooms alone can sell your house!

And keep it clean
Maintain the new and improved interior and exterior of your home in spottless condition until you successfully sell. It’s hard, but it’s necessary. A professional cleaning service may be able to help maintain the new clean look with occasional visits.

Light it up
When showing your house, provide plenty of light and make your home a warm, welcoming place. Open the curtains to let in the sunshine. In the event of an evening showing, make sure you have ample lighting available in all areas. Fresh cut flowers make a nice addition, and a pleasantly scented house is very inviting.  Like to bake?  How about fresh chocolate chip cookies?  Or for something simple and quicker, warm water (on the stove?) with vanilla.  In the winter cinnamon or citrus smells are inviting also.

Go away
Many agents (read potential buyers) would prefer that the seller not be present during a showing to avoid limiting the buyers’ conversation or making them uncomfortable.  Make sure any pets are also gone, or at least well detained and that the selling agent knows about them.

For more, or to get help, visit Yuba Sutter Homes and Loans on line.  Or email us any time.  If you prefer, we are also available by phone at 530 315-2808

Are You Changing the Way You Save?

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According to recent surveys and studies, many Americans are.  For instance, the 401k seems to be loosing out as the most prominent.  As the economic downturn caused many company to reduce or discontinue matching funds in company 401k plans, employees have stopped contributing to them.

According to experts this is cause for alarm.  If the money that was being put into 401k plans is now being spent instead of saved it could spell trouble.  Studies indicate that people are creatures of habit.  Once we get used to having that extra spending money from each check it will be very difficult to go back to saving.  While the employers may go back to contributing matching funds that new spending habit will have to be broken.  To read the full article click HERE.

Does a 401k make sense for you?  Is real estate a better opportunity?  We think many can gain signicantly by investing in real estate.  A look at the self-made millionairs of this country will show that EVERY ONE OF THEM have heavy investments in real estate.  Is this right for you?  Only you and your financial advisor can answer that question.

Does this sound interesting to you?  Contact us for information.  Check out our web sites at Yuba Sutter Homes and Loans, Yuba Sutter Home Buys, and Homes in Yuba Sutter.  Or you can call me personally @ 530 315-2808.

Want to keep up with current real estate happenings?  Just add this column to your RSS feeds (see the link below).  Check out the LOCAL real estate news at Yuba Sutter Real Estate News & Discussions.

Reducing Home Buying Costs

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OK, you know that buying that For Sale by Owner house could be problematic.  You really want (dare we say need?) the security of having a Realtor® on your side to protect your interests.  Do you just start shopping for the cheapest agent you can find?

As a rule, like other things in life, getting the best value is often not the “cheapest”.  A cheap transaction may end up costing in the end just as having no representation will.  What to do?

There are things you can do to reduce your closing costs for example.  While most quality Realtors® will charge about the same fees (actually a figure that is included in the cost of real estate), what you get can vary greatly.

Of course protection of your rights is paramount.  Helping you get a great price also ranks up there.  What about help with your loan?  What about resources for outside help: a contractor, handyman, plumber or electrician, legal help if needed…the list goes on.  And there are those before and after expenses and chores.

Do you need to rent a storage unit?  It’s FREE at Yuba Sutter Homes and Loans.  Will you be doing the move yourself?  Does that require a truck rental?  Again, FREE at Yuba Sutter Homes and Loans.  Who’s going to cook that first night while everything is still in boxes?  Just ask us!  And the home warranty to protect your new home?  FREE  How about a home security system?  Yes, also FREE.

At Yuba Sutter Homes and Loans we have loan officers on staff.  Even a refinance has closing costs, and we can help you with those too.  And there are things you can do to help us help you (even more savings!).  To read more on this click HERE.

Sound interesting? email us today.  Or call us at 530 315-2808.  Find out how YOU can have all this.