Where 'Zombie' Foreclosures Still Lurk

A "zombie" foreclosure is a property in which the homeowner walks away from the property without paying the mortgage and the property eventually gets foreclosed. I haven't seen one of these here in the Silicon Valley in quite some time, but I thought this article interesting enough posts for your reading enjoyment.



The share of "zombie" foreclosures are falling, but these owner-abandoned properties still lurk and are contributing to neighborhood blight in pockets across the country.

About 24 percent of all active foreclosures – or 127,021 – nationwide have been vacated by home owners prior to the foreclosure being completed. These so-called zombie properties will likely wind up as short sales, foreclosure auction sales, or bank-owned sales in the future, according to RealtyTrac's second quarter Zombie Foreclosure Report.

Still, zombie foreclosures fell 10 percent nationwide in the second quarter compared to a year ago.

"A growing number of states and cities have enacted public policy measures to combat the problem of zombie foreclosures, and we are seeing the results of those efforts in the overall decrease nationwide as well as in several hard-hit markets such as Chicago, Miami and Cleveland," says Daren Blomquist, vice president at RealtyTrac. However, "as banks push through long-deferred foreclosures that are more likely to be owner-vacated this year, we are seeing a somewhat surprising increase in zombie foreclosures in markets with overall low foreclosure rates such as Los Angeles, Houston and Boston."

The average estimated market value of an owner-vacated foreclosure is 22 percent below the average estimated market value of an owner-occupied foreclosure. "These zombies are contributing to blight in neighborhoods across the country," Blomquist says.

The highest rates of zombie foreclosures among 183 metros analyzed were in:

1.) Atlantic City, N.J.: one in 130 housing units
2.) Trenton, N.J.: one in 166 housing units
3.) Tampa, Fla.: one in 218 housing units
4.) Binghamton, N.Y.: one in every 260 housing units
5.) Ocala, Fla.: one in every 262 housing units

Some markets have seen large increases of zombie foreclosures in the past year, according to RealtyTrac's report. Notably, the following markets have seen the largest spikes in zombie foreclosures from a year ago: New York (up 38 percent), Los Angeles (up 39 percent), Houston (38 percent), Philadelphia (up 19 percent), and Boston (up 14 percent).


Source: RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/06/11/where-zombie-foreclosures-still-lurk?om_rid=AAFmZk&om_mid=_BVeejGB9CnYC8V&om_ntype=RMODaily

For Sellers, Emotions Trump More Money

I know it is a competitive market. It is in fact it's still a hot seller's market with many home seeing multiple offers. Realtors and anyone looking to buy a home here in the Silicon Valley knows this. On some of my more recent listings I have seen all cash offers. And quite often these cash buyers are investors, and it is this situation that makes it hard for the married couple, first time home buyer, with 20% down loan who are looking for a home for themselves to raise their kids.

Having said that, there is something to be said for making that connection to the seller's emotion, and a new study conducted by Coldwell Banker seems to prove that. According to the study more sellers are willing to judge and accept an offer based on other factors than just more money as opposed to years past. 

In fact I closed a deal with a first time home buyer client of mine who wrote a personal letter addressed to the sellers telling them how much she loved the home, the neighborhood, and complemented the sellers on their sense of style in decorating the home and how well they maintained it. Even though my buyer client's offer was not the highest (but still pretty good compared to other offers), the sellers liked the fact that my buyer was being so open and honest about her desire for the home and accepted her offer. 

Sometimes even showing up to an open house, if the seller is there, can make a difference. If you can make that face to face contact with the seller and letting them to get to know you and your situation, often times they will remember you when the offers come in. I've seen some buyers who did this and ended up successfully getting the house. Go figure.

So against the investors with too much cash burning a hole in their wallet, there is hope people.



Home sellers today are twice as likely to choose an offer based on emotion rather than money alone compared to the years prior to the recession, according to a new survey of more than 1,500 home sellers released by Coldwell Banker Real Estate LLC, which analyzed real estate trends in the past decade.

Read more: 3 Mistakes Sellers Often Make
Since 2014, more than one in four sellers nationally sold their home in less than two weeks. But despite the higher prevalence of multiple bids and offers above asking price, sellers judge an offer based more on emotions than the extra money, the study found.

"There is a notable difference in seller psychology today compared to 10 years ago," says Budge Huskey, president and chief executive officer for Coldwell Banker Real Estate LLC. "The national housing market has changed significantly over the past decade, and seller sentiments have evolved. Home sellers often want to feel emotionally connected to the buyer. These findings should give solace to buyers in highly competitive markets who may present a compelling story as to why they should be the next owners of the home."

Before the recession, about 20 percent of sellers accepted an offer based on emotion rather than money alone. However, from 2006 to now, the number has climbed to 36 percent.

"While housing has clearly steadied, we have all wondered how the recession might impact home sellers, and we now have additional insight," Huskey said. "During this recovery, sellers are more aware that their home, which played such a critical role in their lives, will have the same emotional impact on the next occupants. Today, they have more information than ever and want to more actively participate in the sale of their home."

During the recession and its aftermath, more sellers accepted the first offer they received – a notable difference from today. Now, only 46 percent of home sellers accept the first offer they receive – which marks a 22 percent decrease, the survey found.

Source: RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/06/11/for-sellers-emotions-trump-more-money?om_rid=AAFmZk&om_mid=_BVeejGB9CnYC8V&om_ntype=RMODaily

Century 21 Finds World’s Worst Garage Band

Century 21, the company I work for as a Realtor has a new marketing campaign in which they feature a really, really crappy garage bad making all kinds of terrible noise as a reason to move. I've seen all kinds of marketing pitches and ad campaigns in this business, but this is a new one for me.



To coincide with summer concert season, Century 21 has launched a social media campaign to sniff out the worst garage bands globally who are terrorizing neighborhoods with their awful music.  The idea for the campaign is that if someone lives near one of the world's worst garage bands, Century 21 can help you move.

Century 21 selected four finalists, from South Florida to the United Kingdom (who they say wanted to be on the list too), and has unveiled videos of each of the bands this week on social media channels. Each short video showcases the band's "special talents," Century 21 notes. Also, each of the videos end with the message: "If you live within earshot, we'll help you move immediately."

To view the worst of the worst, use the hashtag #WorldsWorstGarageBand on social media. Century 21 is having the public vote for a winner. Voting is open through July 29.

Source: RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/06/11/century-21-finds-world-s-worst-garage-band?om_rid=AAFmZk&om_mid=_BVeejGB9CnYC8V&om_ntype=RMODaily

Local Realtors giving back

We Realtors do give back to the community in anyway we can. The Silicon Valley Association of Realtors, SILVAR, (the organization I am a part of) grants scholarships to a number of graduating high school students for college. This year 18 kids were awarded scholarships by SILVAR. Congratulations to all of you and good luck on your future careers!


The Silicon Valley REALTORS® Charitable Foundation, the charitable arm of the Silicon Valley Association of REALTORS® (SILVAR), presented scholarship awards to 18 graduating seniors from public high schools in Silicon Valley at the end of the 2014-2015 school year. Each student received a $1,000 scholarship.

Now on its 16th year, the REALTOR® scholarship program recognizes students who have exemplified outstanding achievements in academics, extracurricular/employment activities and community involvement. The selection committee included representatives from the local business community, area high schools, area colleges and SILVAR.

Students who received scholarships from the Charitable Foundation, the schools from which they graduated, and the colleges and universities they plan to attend are: Greg Pommier, Cupertino High School (UC Berkeley); Brianna Clarice Clark, Fremont High School (Tuskegee University); Daniel Rothenberg, Gunn High School (San Francisco State University); Arisa Ananda Faron, Homestead High School (Cal Poly - San Luis Obispo); Aleksandra Vojvodic, Leigh High School (UCLA); Jhosseline Guardado, Los Altos High School (UC Davis); Laurel Michelle Finkle, Los Gatos High School (UCLA); Jessica Zheng, Lynbrook High School (Princeton University); Caroline Kelly, Menlo-Atherton High School (University of Michigan); James Mullen, Monta Vista High School (UCLA); Marisa Noelle Gong, Mountain View High School (Washington University in St. Louis); Promise Lee, Palo Alto High School (UC Davis); Kevin Wei, Prospect High School (UC San Diego); Vicente Lozano Lovelace, Santa Clara High School (UC Santa Cruz); Yun Seo (Jennifer) Kim, Saratoga High School (New York University); Tuyen Nguyen, Westmont High School (UC Santa Cruz); Rachanon Wajanakunakorn, Wilcox High School (Cal Poly - San Luis Obispo); and Rachel Bontempi, Woodside High School (UC San Diego).

The following SILVAR members who presented the scholarships to the recipients at their respective senior award ceremonies were Chris Alston (Keller Williams), Fe Manzano (Century 21 M&M and Associates), Jimmy Kang (PNC Mortgage), Nina Daruwalla (Coldwell Banker), Cassie Maas (Alain Pinel Realtors), Dani Fletcher (Sereno Group), Suzanne Yost (Alain Pinel Realtors), Mark Burns (Referral Realty), Mary Tan (Coldwell Banker), Robert Reid (Keller Williams), Sue Bose (Referral Realty), David Tonna (Alain Pinel Realtors), Russell Morris (Coldwell Banker) and Theresa Loya (Coldwell Banker).

The scholarship awards presented by the Charitable Foundation are made possible by donations from REALTOR® and affiliate members of SILVAR. Since its creation, the scholarship program has provided $288,000 in scholarships to high school seniors in Silicon Valley.

Why Renters May Be Losing Out

Here in Santa Clara County/Silicon Valley, rent is at an all time high. Many of my first time home buyer clients came from apartments, so I am well aware of the desire by many apartment dwellers to own something of their own. Like the article from RealtorMagazine Online points out, I know two of the biggest problems renters face is qualifying for a mortgage and the down payment.

My advice to any renters out there looking to buy, keep working to clean up your credit and keep saving that money for a down payment. You'll get there soon enough.

Why Renters May Be Losing Out

Americans are better off buying than renting in the majority of places across the U.S., but the number of renters continues to be at record highs.

Realtor.com® finds that it's cheaper to buy rather than rent in 80 percent of the counties in the U.S. That's because renters continue to face sharp price increases. A record number of renting households are leading to fewer apartment vacancies, which in turn is continuing to push rents upward, notes Jonathan Smoke, realtor.com®'s chief economist, in recent commentary at realtor.com®.

But many renters – with home ownership aspirations – are struggling to break into the housing market. Indeed, 81 percent of renters indicate they would prefer to own a home if they could afford to do so, according to the Federal Reserve's Survey of Household Economics and Decisionmaking. Fifty percent of renters reported that they lack the funds for a down payment and 31 percent of renters say they could not qualify for a mortgage.

Other reasons given for renting included 27 percent of renters saying it was cheaper for their household; 25 percent who thought renting was more convenient; and only 12 percent said they rented because they preferred it over owning.

The amount of income renters may have influenced their responses for why they choose to rent. For example, for renters earning less than $40,000 year, their top responses on why they rent were because they were unable to save for a down payment (52%) or qualify for a mortgage (35%). On the other hand, for renters who earn more than $100,000 a year, their top responses for renting were because they believed renting was more convenient (39%) or they preferred renting to owning (17%). Twenty-nine percent in the $100,000 and up earner group said they plan on moving in the near term.

Source: RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/06/11/for-sellers-emotions-trump-more-money?om_rid=AAFmZk&om_mid=_BVeejGB9CnYC8V&om_ntype=RMODaily

The 5-Step Plan for Buying a Vacation Home

Do you dream of owning a vacation home, but find the idea of buying one too intimidating? It’s actually easier than you may think. Here’s a guide to help you analyze your options.

1. Match housing choices to your lifestyle

Many people assume they must own a primary residence before owning a vacation home, but this isn’t a rule you must follow. What’s really important is matching your housing choices to your lifestyle.

You may live in a city and want lots of space that you can’t afford there. You could rent a modest condo in the city, and buy a large vacation home outside the metro area.

Or you may live in a large country house and want to enjoy city life as much as you can. In that case, you could own your country home and also buy a vacation condo in the city.

Either way, the financing and tax implications are almost the same.

2. Determine how you’ll use your vacation home

From a financing and tax standpoint, you need to consider how you intend to own and use your property. You have three options:

• Primary residence. You can buy for as little as 3 percent down (if your loan doesn’t exceed $417,000), mortgage rates are the lowest they can be, and you get significant homeowner tax benefits.
• Second home. You can use your second home any time you want, but lenders won’t let you rent the home. Buy for as little as 20 percent down, and qualify for the loan using your full primary residence cost plus your full second home cost. Mortgage rates and tax benefits are the same as primary residences.
• Investment property. You can rent the home, plus use it when it’s not rented. Rates are .25 percent to .375 percent higher than second home rates, and your down payment usually starts at 30 percent. You qualify for the loan using your full primary residence cost plus your full investment home cost, but you can use rental income to help qualify. Tax treatment is less beneficial, but the extra income can help with affordability.

3. Understand the total cost of owning a vacation home

You can determine what you can afford in seconds. Then you’ll find a lender to formally analyze the cash available for down payment, closing costs, and reserves. You’ll also calculate the total monthly cost on your existing home (whether you rent or own), plus the total monthly cost on the vacation home.

You also need to plan for personal budget items that lenders don’t use in their qualifying calculations:

• Gas, electric, cable TV, and internet
• Furniture and housewares
• Travel costs to your vacation home
• Total cost of property maintenance items like cleaning, landscaping, and pool/spa upkeep

4. Review monthly and transactional cost line items

Suppose you live in San Francisco and want to purchase a home in the wine country of Sonoma County, CA for $600,000. Here’s how much it would cost as a primary residence, second home and investment property.

5. Make an offer using a local realtor and lender

Many vacation properties are in specialized local markets, so it’s best to find local real estate agents and lenders.

Your real estate agent will clarify local transaction fees, taxes and commissions, as well as advise on local zoning and property rental rules. For example, the town of Sonoma doesn’t allow short-term rentals for vacation homes, but other towns in Sonoma County do allow this.

In destination areas, real estate agent commissions can be higher and can also be seller- or buyer-paid, depending on the area. Only a local expert can advise properly. And, of course, they will structure your offer for you, and negotiate on all facets of the deal that are a priority to you.

Likewise, local lenders will be comfortable with appraisals and lending in rural areas. Appraisals are more difficult in less populated areas because comparable sales can be old and hard to find.

If you follow these steps, your closing will be a snap, and you’ll be relaxing in your vacation home before you know it.


Source: Zillow Blog, Zillow Team
http://www.zillow.com/blog/5-steps-buying-vacation-home-177608/

Inspecting the Inspectors

This article is written more for Realtors, but I think it is valuable for homeowners in general who need to higher a property inspector for whatever reason. In my business as a Realtor, I've worked some really great inspectors who will take their time and really, really inspect the property and write and a clear, thorough and comprehensive report, and I've worked with other inspectors that just breezed through the inspection and wrote a crappy report that left my clients with more questions than answers. So the bottom line people, make sure you higher a good inspector.



Mold and rot eating away at supporting beams, problems with the electrical system, plumbing issues... It’s the stuff of nightmares, but for many home owners, it’s a reality. Sometimes, undetected damage can be dangerous. Did you hear the one about the buyer who fell through the floor on move-in day when the rotting surface collapsed?

Fortunately, a thorough home inspection can help to uncover hidden damage and shine some light on potentially costly future repairs. But home inspections aren’t just completed to keep the buyer safe — they can help to protect the real estate professional too. Informed buyers are more likely to be satisfied with their purchase and, as a result, they’ll be far less likely to come back to haunt you after the sale closes. If you’re like most agents, much of your business is based on referrals. A satisfied client who feels dealt with honestly and fairly will be far more likely to send others to you, even if in the end they decided not to go through with the sale.

Smart real estate agents know the importance of maintaining a list of qualified home inspectors to give to clients who ask. Having some “pre-inspected inspectors” on hand is an excellent way to help ensure that your clients will be happy with their purchase.

But how do you compile this list? Make sure the inspectors that you recommend are professional and qualified, will do a thorough job, and won’t be afraid to crawl under the house to make sure the floor isn’t about to cave in! Here are nine questions that can help you to thoroughly evaluate a home inspector.

1. Are You Licensed?
A handful of states don’t have any licensing requirements at all, so it’s worth checking to see if your state requires licensing. If there are no licensing requirements, you’ll want to spend some more time looking closely at other qualifications, including training and experience.

2. Which Professional Associations Do You Belong To?
Affiliation with a national or state association of home inspectors isn’t a guarantee of professionalism, but it’s certainly a good sign. These associations often require that members keep up-to-date with training and certification. Reputable groups to look for include the National Association of Home Inspectors (NAHI), the American Society of Home Inspectors (ASHI), and the International Association of Certified Home Inspectors (InterNACHI).

3. What Are Your Credentials?
Read up on the home inspector’s qualifications, and find out where they received their training. There are a number of professional organizations that provide credentials, including ASHI and NAHI. Watch out for those who claim a “company certification,” or any type of “in-house accreditation system” that’s not subject to overriding industry standards.

4. How Much Experience Do You Have?
The NAHI and ASHI require a minimum of 250 inspections. It’s important to note though, that many industry professionals say that finding someone who has performed at least 1,000 inspections and has three to five years of full-time experience is important. When browsing the home inspector’s website, watch out for wording designed to make it look like they have more experience than they actually do. Remember, “industry experience” doesn’t necessarily mean experience actually inspecting homes.

5. Are You Insured?
Even the best inspectors can make mistakes. It’s important to ask for proof of insurance for both errors and omissions and general liability. Always avoid inspectors who aren’t insured, and watch out for inspectors who severely limit their liability coverage. Some inspectors will only reimburse the customer for the cost of the inspection.

6. What’s Your Policy?
Ask about their policy involving problems that should have been picked up on in the inspection. Does the inspector stand by the report? Do they offer any guarantees? Some home inspectors offer optional 90-day warranties that will help cover repairs or replacement costs. Be sure to check into such offers, paying special attention to the fine print and exclusions.

7. What Are Your Customers Saying?
Head online to see what their past clients are saying. Many home inspectors have client reviews on websites such as Angie’s List, Yelp, and Google Plus. You can also check the Better Business Bureau to see if there are any complaints made against the inspector.

8. Are You Able to Provide a Sample Inspection Report?
This will help you to gauge how thorough their inspections will be. Most reputable home inspectors will be more than happy to provide you with one if they don’t already have one proudly displayed on their website. A home inspection report should look something like this.

9. How Long Will Your Inspection Take?
Often, you can evaluate the diligence of an inspection by how long it takes. According to ASHI, a home inspection can take two to four hours or longer, depending upon the size of the home. Specific guidelines governing what must be examined during home inspections exist in only around half the states in this country. Watch out for inspectors who offer “specials” for one-hour inspections—anything less than two hours may be an indicator of a less-than-thorough job.

Also, it’s a good idea to maintain a full list of recommended inspectors, rather than just one or two. This approach drastically reduces your risk of liability and provides your clients with the opportunity to choose their own inspector. Real estate law professionals recommend avoiding verbal referrals whenever possible, instead providing clients with a written list of three to five service providers.

By taking the time to compile a list of inspectors, you’ll be doing your clients a tremendous service and providing them with a valuable resource. You’ll also be establishing yourself as someone who can connect clients with professional help throughout the real estate transaction.


Source: RealtorMag, Brenton Hayden
http://realtormag.realtor.org/law-and-ethics/feature/article/2015/05/inspecting-inspectors?om_rid=AAFmZk&om_mid=_BVdcaTB9CahVMK&om_ntype=RMODaily