Out of the Ashes…

LENDER’S VIEWPOINT
by CA Broker, Owner

Out of the Ashes…
I have empirical evidence of the real estate market recovery. Statistics I monitor that have seen a dramatic turn recently. It has me more excited about the recovery than housing sales.
My Past Borrowers are buying houses, and they are using Hard Money to do it. And it’s logical that they would.

Picture this, my office did over 400 loans annually up to 2005 when the market tanked. The average Borrower up until 2005 borrowed 80% of the value of their home. A lot of them got a “free” home equity line of credit to boot as the lenders were giving those out like it was Halloween candy!

Then values were slashed in half in Sonoma County where I live. The median priced home in August 2005 was $619,000 and it dumped all the way down to a median of $305,000 last year. In outlying counties, the drop was as much as 66%.

So anyone who borrowed to 80% of the value of their home and then saw a 50% decline in value, has been foreclosed upon, did a short sale or is hanging in there hoping that values might recover to their former glory.
It was a deal killer for my business because in the pre-debacle days, the biggest quantity of loans in my company came from Past Borrowers, that is past clients. In second place were Referrals from Past Borrowers. That source of business virtually went away from 2005 until only very recently.

Over 50% of the loans written in my office this month are Past Borrowers. That’s way up from 0%. Now that’s a recovery!

And it’s because of Hard Money. Every one of those Past Borrowers has either a foreclosure or a short sale – or both in their recent credit history. Many have a recent bankruptcy. Not even their favorite bank will loan to them. Hard Money will. With a good down payment or equity in the property and an ability to make the monthly payments, I can do that loan.

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of experience in real estate and lending.  His phone number is (707) 523-2099.  Email is Broker@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.  DRE license #01464899. NMLS #360993. 

The Winning Bid

It looks like the various predictions that 2012 will be the best year in Real Estate since 2006, are coming true.

The statistics bear this out for sure, but a more telling phenomena is the dreaded bidding war.  That is a listing that receives multiple offers.  These happen with frequency in a market with not emough homes and too many eager Buyers.  It also happens on really desirable properties.  Of course this is great for the Seller of that property and the values for that area, but only 1 Buyer will take home the prize.  The losing bidders will have to go find another one.  I have personally seen a Buyer from my office recently compete with 34 other offers on a property.

He had the Winning Bid.

What set his offer apart, as far as we can tell, is the fact that he was purchasing with Hard Money.

The listing agent knew that the Hard Money Pre-Approval for that Buyer meant that the lender was ready to go with this loan.  He knew that the property would not likely be a problem to the lender, as Hard Money will do really ugly properties, and this one was not that bad.  He also knew that it would be fast as the contract offered a close of escrow in 21 days or less.

So the Buyer made the offer using Hard Money with a 21 days or less close of escrow and all contingencies removed in 10 days instead of the default of 17 days. This was an offer the listing agent could really get behind and it was the Winning Bid – out of 34 others!

So if you are feeling beat up after making offer after offer to no avail, get to your local Hard Money Lender, get Pre-Approved and go write a Winning Bid!

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of experience in real estate and lending.  His phone number is (707) 523-2099.  Email is Broker@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.  DRE license #01464899. NMLS #360993. 

LENDER’S VIEWPOINT
By; Broker Owner

Sure Advice for Real Estate Success

As Rick Laws mentions in his 2^nd quarter real estate report, the Bay Area experienced over 30% increase in homes sold compared with last year.  A 30% increase!

The big question is: “How does a Buying Agent get their Buyers to write the offer that gets accepted?”.  The answer is: “ They make the strongest offer.”  But what does this mean?

Below are some very successful points of advice that, when followed as much as possible, will definitely contribute to a successful accepted offer:

1. Higher initial deposit.
2. Shorten close date.
3. Remove as many contingencies where possible. (For example, an investor or flipper who will remodel the home and resell or rent it, might go for removing inspection contingencies.)
4. Stronger loan; Shorter loan contingency removal date; No loan contingency at all.  (This can be accomplished by getting a hard money loan for example.)

Why should a Realtor or Buyer for that matter consider following the above points of advice to increase the likelihood of getting an accepted offer?  How about for these 4 main reasons to own a home:

1.  Tax Savings.
2. Pride of Ownership.
3. Appreciation.
4. Accumulation of Wealth.  (For renters, if rents go up in the next 30 years at the same rate they did over the prior 30 years then someone renting today for $1,600 will be paying $4,496 in 30 years.   30 Year Fixed rate mortgages stay the same and one can pay down their home and increase their equity, ie. accumulation of wealth.)

In today’s real estate market, houses are just increasing in value so Buyers are making smart decisions for their future financially.

Hard Money can definitely help make an offer “strong”.  I work with Buyers who have damaged credit including a bankruptcy, foreclosure or short sale in the immediate past.  With a good down payment and an ability to show you can pay for the loan, you can get a loan and be a homeowner today.  So call me!

Owner- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of experience in real estate and lending.  His phone number is (707) 523-2099.  Email is Broker@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.  DRE license #01464899. NMLS #360993.