Wednesday, November 3, 2010
Good Grief - there's so much about real estate in the news these days, it's hard to keep up. Lots of inventory to pick from, historically low interest rates, foreclosures, short sales, hanky-panky at the banks during foreclosure proceedings, and on and on and on.
So, why, you say, would Amy need to talk about something so boring as title insurance. Who even knows, really, what it is or does? I think I signed something the last time we closed on a loan, but there was a pile of papers 4" thick. Who knows what all was in those documents?
But these days my friends, you need to know. (you really needed to know every time you signed, but hey - we all trusted. And now look look at the pickle we're in!)
In Oregon, our sellers customarily provide the new buyer with a Warranty Deed. The long and the short of it is that this is the most common form of Deed. This deed conveys title, and covenants that the Seller has the right to sell and has good title free from encumbrances except as stated. Title insurance, that is purchased at the time of closing, is just that - an insurance that's there as a safety net for the buyer in case there is some sort of mistake and the title is transferred with an encumbrance discovered after closing. It's a great system.
So - what's the big deal? The big deal is that many of you are contemplating a purchase of some of this great priced foreclosure property. The price is right, the interest is good, and lets face it, not all of them are trashed. Sounds like an opportunity.....and it is. There's just one small catch.........
That small catch has to do with the lenders selling the foreclosed property. Many of them use their own Addendum to the real estate sales contract. Contained in those addendum's is language often expressing that the seller is conveying the title to the buyer by means of a Special or Limited Warranty Deed, Quit Claim Deed or Bargain and Sale Deed. So??????
Each of those deeds has their own limitations on how much the "seller/lender" is representing with respect to how clear the title is. As an example; the Special Warranty Deed promises that the Seller/Lender will defend the title to the property back to the acts of the Seller only! That means the Lender says "I know this title is clear for as long as I've held it since the foreclosure." WOW - there could have been a lot going on prior to that short period of time!
Does this mean you should be afraid to buy a foreclosed property? Not at all. But it does mean you need to take precautions.
Deal with a reputable Realtor who reads and understands the possible impact of the addendum's you might receive from a Lender/Seller. Insist on a reputable title company or escrow attorney to handle the search of title. Be sure that there is title insurance in place. If it's not paid for by the seller, then you as the buyer should buy it for yourself. And seek the advice of an attorney if there's any confusion on this issue, or any other issue in a real estate transaction.
Hope that gives you an idea about why title insurance certainly is not boring. In this crazy new real estate world we're in - we've all got to be better informed and more vigilant about protecting our interests as we proceed through any transaction.
Call/email/or Facebook me if you have questions. Now go make lemonaide out of all those lemons!
P.S.: Thanks Ted :)
Friday, October 22, 2010
We've been working daily in our office, over the last two years, to try and understand what keeps happening in the real estate/mortgage market. It seems as if weekly there's some new crisis, issue or program that we have to unpack and try and understand for the benefit of our clients.
The most recent bomb came in the form of assertions that there were "robo-signers" signing literally hundreds of foreclosure documents without benefit of review. Oh that that was the real problem. Having a little inside information on what the real issue was, I watched with interest as the BIG mainstream media outlets played this story.
And then to my delight, my local news publisher asked if he and I and Shel Perrigan, a Loan Examiner, could sit down and discuss what was going on in the mortgage market now. Could we ever!
The results of that meeting led our publisher, Lydon Zaitz to do an OpEd piece that actually captures exactly what the problem is. I've included the link so you can read his very direct and clear piece on the foreclosure mess.
As this story has been breaking, I keep hearing over and over, "well they didn't make their payments anyway, so who's really concerned about a robo-signer, or whether they fully reviewed the documents or not." Hmmmmmm.......
Once you really know the in's and out's of what has been happening, there's reason to be concerned. Each of us are just one administrative mistake away from a potential foreclosure (although admittedly that is not the bulk of the problem). But more than that, why have any rules? Why have any contracts (which is what a mortgage is), if any violation by one party means the other party can violate terms of the contract at will.
This is a serious issue. So far, Oregon's Attorney General has taken a "wait and see" position. I hope after reading Lydon's OpEd you might be compelled to contact your State Representative or the Attorney General's office and see what they might do now to protect the rights of Oregonians.
Beyond that, we will get through these times. I'm reminded of the stock we all come from everytime I look at the Pioneer on top of our Capital. We're tougher than all this! Now here's the piece:
Tuesday, October 19, 2010
Short sales provide better solution for families and communities
HAFA is a government-sponsored initiative overseen by the U.S. Treasury Department and administered by Fannie Mae. It assists all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu of foreclosure.
“This is the first government program that gives incentives for short sales and lays down the process for short sales,” Charfen said. “More importantly, HAFA has brought more attention to short sales and that means banks, REALTORS® and the government are paying attention to short sales.”
REALTORS® should see the benefits of HAFA. “Many times REALTORS® spent time educating the consumer with little or no support. With the government stepping forward on this issue, it puts short sales in the forefront,” he said. “We’re already seeing banks that have added staff to process short sales and they’re stepping up the process so it doesn’t take as long.
“Short sales are so much more beneficial than a foreclosure. Previously we saw seven out of 10 properties in foreclosure were never listed,” Charfen added. “With a short sale, it offers a dignified solution to a family in financial crisis. You see less deterioration in the homes, less property values falling and it helps the overall community. With every foreclosure in a community, we can see property values for surrounding properties decline as much as nine percent.”
“HAFA has been a long time in coming,” he continued. “It’s been a huge collaborative effort with the government and many other organizations. There is no silver bullet to solving the foreclosure crisis and there’s no question that we’re going to continue to see increases in defaults. HAFA offers the real estate market a chance to move forward and stop the decline in property values.”-Originally published on PAR's Just Listed
Wednesday, August 25, 2010
Let me just say this, "Who Knew?" And the answer is, we did.
I'm just going to tell you I need to blow off some steam after listening to all the news reports yesterday. These same "reporters" were telling everyone in April, May and June that sales had made record increases over the previous year. As they were speaking then, I was yelling at my TV, "the 1st Time Home Buyer Credit stupid!" But did anyone listen. No! Especially not sellers.
Sellers heard the news and assumed the market was back. And for a moment, for some, it was. Unfortunately when most of us have visions of the market being back, it's at pre-2007 crash levels. The reality was, reporting those increases "over the previous year" referred to a market that was already way down in 2009.
So where are we today? While 27.2% sounds awful, it is simply a reflection of the 1st Time Home Buyer Credit ending. It's a reflection of a real estate market that is trying to normalize after being tampered with - again. It's a reflection of a real estate market that is often quieter in July because of families finishing up sports programs and taking vacations. And it's a reflection of a real estate market that is going to continue to decline a bit, until we clear out the distressed property inventory and improve the job picture.
And where does this leave you my friend? If you're a buyer, buy! You have 4% interest rates, home values that have nearly rolled back to pre-2000 pricing and inventory abounds. We even found that buyers buying now may do better on pricing than the value of the $8,000 tax credit. So what are you waiting for???? There is one caveat to buying, though. Buy with plans to be content in your home for about 12 - 15 years. No more musical houses!
If you're a seller, sell quickly. This market is projected to continue it's decline through 2012. Time is your enemy. To my Boomer friends, consider moving up your retirement plans. This is going to be a long slow recovery. Losing another chunk of your housing value, and then trying to down size in 5 - 10 years might not be the best plan. Call for my insights. My honey and I have been having long discussions over this very topic. Do you really want to vacuum the 2400sqft house when you're 65 and 70? How 'bout the weed-picking on the 1/4 ac lot? Think about it!
Think about it, you say. Let's be honest, these are confusing times. Most of us have never lived through an economic period like this. So when you hear this kind of news, CALL and get some good interpretation, and most of all, context for it. Your situation may call for action, or it may call for you to sit still. Either way, we're here as your Housing Counselors.
Lastly, don't be afraid. This housing market will correct itself when the job market improves. So lets put all our efforts and emotion into banging the drum on the legislative steps about JOBS. That's the key to cleaning up this mess.
Now - lets go have a glass of cyber-wine and take a deep breath!
Monday, August 23, 2010
WOW - it must have been summer, because time certainly got away from this amateur blogger!
That being said, what is going on in the real estate market now?? Everyday a person picks up a paper, listens to a news report or surfs the internet and finds nothing but confusion. Let me just say, it's not as confusing as it might seem. Most of the stories you hear or read carry little or no context, and certainly don't come from a local perspective.
Here's an example from just the past couple of months. Beginning in April 2010, reports were that sales were up. May, sales were up and, suprise, June sales were really up. Well no duh - it was the rush to close sales for the First Time Home Buyer Credit. Now, reports are that sales are down. Again I say, "Duh." First Time Home Buyer Credit is over!
So what should a buyer do? The burning question on everyone's mind is, "Should I buy now?" And let me respond ever so clearly, "YES!"
Well that sounds just crazy, doesn't it? And I have to be honest. I was having a hard time knowing whether to advise buyers to buy now or wait. That was, until I heard from an economist, that this is exactly the time you should be buying. Sound Crazy? Read further.
Only about once every generation (about every 35 years) does the gas literally go out of real estate values. Now I'm not talking a little 6 month downturn. I'm talking about an all out crash. In my most recent memory, this type of event has occurred during the Great Depression, In the late 70's/early 80's (remember 18% interest only - I do), and then now.
That gas going out is when your Aunt Tilly bought her home in San Diego for $9,000 and can now sell it for $350,000. That gas going out is when my Honey and I bought our first house in 1982 for $40,000 and it's now worth $200,000.
So what do you think this gas-out will bring? Combine these prices with a 4.5% interest rate and you've hit the jackpot baby!
But there's one little catch and this is where great Realtor's can help you with your buying decisions. That catch is the same one I've talked about before - changing your paradigm about what your house is. This home is a place for peaceful enjoyment, privacy and a place to build memories...for a VERY long time (read 15 - 20 years). It is no longer your ATM or the family's 3rd income earner. Contentment needs to reign supreme in your home.
Hope that helps. And now lets bring on the Fall!
Thursday, June 24, 2010
Wednesday, May 12, 2010
Wednesday, February 24, 2010
Thursday, February 18, 2010
Foreclosure on your home is an extremely serious issue. Unfortunately, many people do not realize the extent or the severity of this financial nightmare until it is too late. Foreclosure on your home will result in the loss of your rights as the homeowner and also presents many legal challenges.
The foreclosure process on the home begins when a homeowner has neglected to make their required monthly mortgage payments. A homeowner , in most cases, will be delinquent on their mortgage payment anywhere from 90 to 120 days. In today's economic climate, many homeowners are finding it difficult to make their mortgage payment and as a result are facing foreclosure.
Once the homeowner moves beyond 90 or 120 days without curing the delinquency, the mortgage lender will initiate action to legally foreclose on the home. The homeowner will be served with a foreclosure complaint by the court. Once you have been served with the foreclosure complaint your next steps are vital in trying to save your home from foreclosure.
Service of the complaint is often the point at which many homeowners choose to ignore their mortgage lender and the foreclosure action. In most cases, homeowners are unaware that once served with a foreclosure complaint they must respond in order to preserve their legal rights and to enable them to take steps to try to save their home from foreclosure or take the steps to sell it.
In most states, the homeowner has a specified period of time by law to respond to the foreclosure complaint of the mortgage lender. It is highly recommended that you seek legal counsel to understand your legal rights as the homeowner and to explore your alternatives in resolving the foreclosure action.
Lenders, even during the foreclosure process, can work with the homeowner to help them save their home. Your lender will require you to submit information to possibly help you modify your mortgage loan. A loan modification may help you to cure your delinquent payments and may even lower your payments or rate over the life of your loan. There are also government programs that you may qualify for if you are experiencing financial hardship and facing foreclosure.
If you are unable to modify your mortgage loan or qualify for assistance then you have other options to help you avoid foreclosure. You may be faced with the fact that you will need to sell your home. In this case a short sale may be an option. Check with a real estate professional who has received advanced education and certification, like the Certified Distressed Property Expert designation, for your options.
If you ignore the foreclosure of your property or are ignorant of the law and your rights you will lose your home. It is crucial to understand the serious nature of foreclosure and take action to save your home and your legal rights.
Tuesday, February 16, 2010
Wednesday, February 3, 2010
If you're like me, it doesn't look like we can escape the projects in our house anymore by moving every couple of years! I'm so disappointed. It sure was a great strategy that worked for over a decade!
But now the smart money is on buying a house for the right reasons; shelter, quiet enjoyment, a place to build family and memories....and after a LONG time - maybe some equity. Wow, how things have changed.
So that LONG time we'll all be spending in our houses, means we need to get better at taking care of them, keeping them updated and making sure they're repaired before things get out of hand.
A good strategy starts with a good Home Inspector. You're probably familiar with the home inspection process, if you've bought a house in the last few years. But did you know it's really important to have your home inspected regularly while you live in it? Ideally you'd have it looked over every year, but for sure have your favorite inspector out at least every 3 -5 years. He'll help identify those things that are starting to cause problems; like moss on the roof, leaking gutters and bushy plants that can easily lead to bigger (read "more expensive") projects if left untouched.
With the inspectors report in hand, you now have your "honey do" list. And that list most likely will include those projects that are perfect for the DIY'er and those that are , well, NOT!
Great home projects are things like pulling back barkdust from your siding (6" of foundation is what the inspector wants to see). Just that little job will keep the critters from snacking on your siding. Purchase vent wells from your favorite home improvement store to keep that barkdust away from the vents and out from under the house.
How 'bout those gutters. Have you cleaned them? Are they draining into a drain pipe or right down the foundation? It's that gutter water that's helping water run into your crawl space - creating unwanted moisture. Find some splash blocks to draw the water away from the foundation while you're at the store as well.
How about that slight shade of green on the roof? The dreaded beginnings of moss. QUICK - get it while you can. That little bugger will be working it's way under the shingles of your roof as quick as it can!
Furnace filters are another often forgotten home maintenance item that leads to BIG dollar costs if ignored. HVAC technicians tell us the filters should be changed every month....and those that aren't are costing you efficiency and money, as well as wear and tear on that very expensive piece of equipment that goes out at the least opportune times! So change that filter!
Lastly, the bushes. Keep those lovelies 6 - 12" off your siding. Rose bushes, rhododendrons, azaelas and any other "woody" bush provides a nice little bridge for those darling carpenter ants and wood boring beetles we all know and love in the Northwest.
So there it is. The short list that starts with a Home Inspector. Give us a call if you need a referral, and then strap on the carpenters belt!
See you on the other side!
Wednesday, January 20, 2010
Thursday, January 14, 2010
But before we look forward, lets take a quick review of real estate in the Willamette Valley for 2009.
One bit of good news is that sales basically stabilized from 2008 to 2009. There were 5954 sales in 2008 and 5869 in 2009. That represents a drop of only -1.43%....really very small, all things considered.
Inventory also seems to be stabilizing, although it had a larger % change at -8.64%. There were 6760 listings in 2008 and 6176 in 2009....a slight float down.
But our average sales price has continued to move in the wrong direction. If you were selling in 2008, the average homes was sold at $240,780. In 2009 that price moved to $214,219. OUCH! Them there's some real hurtin' dollars at an approximate overall drop of 10%!
That's very reflective of what happens, though, when there's a First Time Homebuyer Tax Credit. Hey, guess what? The First Time Homebuyers came out and bought! So that may be more reflective of a market that has 50% of the sales attributed to those buyers.
Hardest hit for price drops were Keizer (12%), Northeast Salem (10%), Southeast Salem (12%), and South Salem (10%).
On the upside....Interest is phenomenal. Whether you're buying or refinancing, there couldn't be a better time, as interest rates hover around the 5% mark (+/-). And it is expected to stay low at least for the better part of 2010.
First Time Homebuyers got a little bonus time toward qualifying for the $8000 First Time Homebuyer Tax Credit. But they must have their homes under contract by April 30, 2010 and closed by June 30, 2010.
Move-up Buyers also got a little $6500 bonus. Main critieria is that you have lived in your primary residence for 5 years and are moving up. What a deal!
As always, please call us if you need a referral to a Mortgage Professional.
Well that's it.....2009 in review. Thank Heaven.
As I look back, I'm reminded that what's important, bottom-line, is our family, our friends, our health, and knowing that Annie was right....."The Sun Will Come Out Tomorrow!"
See you soon!
Tuesday, January 5, 2010
The McLeod Group is looking forward to a great 2010. The “Experts” tell us the recession ended in the Fall of 2009…..and that is great news. As a leading indicator, we’re looking forward to what that actually means in the real estate market.
Right now there are several positive signs.
First, we have the benefit of the First Time Homebuyer Tax Credit. The credit has been extended to homes put under contract as of April 30, 2010. As we reviewed our statistics for December, we noticed the greatest activity is still in the under $225k categories.
Second, interest is amazingly low. I know for some of you, a 5ish interest rate almost seems normal. But for those of us with a few more years of wear and tear – 5ish is LOW! We can give credit to the Fed’s for helping out by buying Mortgage Backed Securities. We’re expecting to see those rates last into the summer.
Now for a few challenges……
The job market is still dicey. Here in Salem the concern is over the effects of Measures 66 and 67 – whichever way the vote goes.
We’re also keeping an eye on the “shadow inventory” of distressed properties held by the banks. Distressed properties are those homes that are behind in payments at least two months, but on whom the banks have not yet filed a foreclosure notice. Word on the street is that the number is about 15 MILLION nationwide…..and that the banks may begin releasing them to the market in the early summer. That could have a dramatic effect on home values this year.
So what does this all mean for you and I?
Most of us have lost any memory of past real estate markets. But looking back can help us put this market back into some perspective.
We’ve entered a time that forces us to see our houses first as a home. They are no longer the ATM machine we were used to. So finding value in the benefits of homeownership will come from things other than a continuous cash flow – like privacy, quiet enjoyment and building memories with our family.
We’ve also entered a time when our homes will once again appreciate at more normal percentages; 3 – 4% is a more likely reality….once we hit bottom.
We are seeing an increase in lenders expecting sellers to provide a home that is pest free, dry rot free and safe. Selling “As Is” has no meaning to a lender. Pragmatically, if we want their money, we have to dance to their tune.
Lastly, change has become the norm in the real estate market. Nearly weekly there are new requirements, new advisories, new rules. Keeping an open mind and a willingness to be flexible will make the navigation of this real estate market that much less stressful.
Please stay tuned for additional posts as our team makes an effort to keep you up on the new changes in the real estate market.
If you have any questions, don’t hesitate to call or email us. We’re here for any real estate question you may have.
Wishing you and yours a very Happy New Year!