According to the National Association of Realtors we are skipping along the bottom of the recovery for the next couple of years until we begin to see some consistancy in the job market.

DSNews, one of the many news organizations for the Default Servicing Industry, quoted Zillow’s chief economist Dr. Stan Humphries as stating “There is a consensus among the nation’s top housing experts that we have not yet reached a bottom and are instead working through a prolonged bottoming process.” Apparently this is expected to cease by the end of 2013 when we will begin to see the typical increase in appreciation which is around 3%.

Another interesting statistic is that 38% of all transactions in 2011 were All Cash sales. This is a good sign of receovery because where the equity increases we see more stability in those neighborhoods where these purchases are made. All in all good news to start the new year.

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Stumbling upon great information and sharing is what networking is all about and in real estate can prove quite valuable so I thought I’d share this gem of information for those of you who are considering a purchase.

Greg Rand writes a real estate blog for investors in addition to his radio show and I’ve found that not only does he push the envelope in terms of challenging people to re-think their opinion regarding real estate in America he does so with positive enthusiam. Check out his article on researching investment properties http://www.ownamerica.com/reading-the-real-estate-tea-leaves/ and see if you don’t agree that now is the time to buy in the Sacramento valley.

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Everyone wonders what the best strategy is when paying down a principle residence and I’ve posted 4 tips to help you determine what works best for you and your family. Just remember that best time of the month to make an extra payment is to include it with your regular payment and pay before your grace period, the extra payment will be applied to the current balance.

Q: Will I save money if I make my regular monthly payment early?

A: No, paying early merely allows the firm servicing your loan to earn interest on your money until the payment due date. This is not the case, however, if you have a simple interest mortgage (SIM). Because it accrues interest daily, the earlier you pay a SIM, the more interest you save. You will know if your mortgage is simple interest because the note will say that interest accrues daily. Also, the monthly payment on a SIM varies month to month, so if your payment is always the same, you do not have a SIM.

Q: Isn’t it better to make extra payments in the early years of a mortgage when the regular payment goes largely to interest than in later years when most of it goes to principal?

A: No, the return on investment (ROI) is not affected by where the mortgage is in its life cycle. While the allocation of scheduled payments between principal and interest changes over the life of the mortgage, extra payments go entirely to principal, no matter what stage of its life cycle the mortgage is in.

Q: Is a biweekly payment mortgage a painless way to pay it off sooner?

A: Making half the monthly payment every two weeks is not painless, because it requires an extra monthly payment every year, and the lender will charge you for the privilege. An alternative approach that is equally effective, and which is entirely within your control, is to increase your scheduled monthly payment by 1/12 of the payment.

Q: If I make a large extra payment, will my future scheduled payments be lower?

A: On a fixed-rate mortgage, the scheduled payment is not affected by the extra payment. You just pay down the balance faster. On an adjustable-rate mortgage, the scheduled payment remains the same until the next rate adjustment. At that point, the payment is recalculated based on the reduced balance, the new rate and the original term. So unless it is offset by a rate increase, the payment will drop.

The city park and recreation dept. is holding it’s annual summer camp for kids at the zoo starting August 8-12, from 10 a.m. – 3p.m. Children ages 7-10 can learn all about animals in a safe, fun setting.  Activities offered are: games, songs, crafts, and close encounters with a variety of amazing Zoo animals. They will learn which animals are predators and those who are prey. Educating campers about complex animal societies and how they, like we, work together as a team in their natural environment. It’s a great opportunity for children to close out their summer while learning things not taught in the classroom.

Camp is for ages 7-10; fee is $289 for Folsom residents / $330 for non-residents.

Please call Folsom Parks & Recreation at (916) 355-7285 or access our online registration system at

http://webtrac.folsom.ca.us

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If a man’s home is his castle then when your castle is being remodeled, it can feel like your kingdom is under siege. It’s frustrating when you come home with groceries and find your kitchen counters gone; the contractor calls and says he won’t show up for another week and this is the 3^rd delay; the painter says the designer colors are no longer available but you could pay extra for custom matches. Pitching a fit or firing the entire crew is not the best solution.

Home remodeling taxes your emotions so here are some tips to help handle the psychological stress. When you remodel your home, you can feel you’ve lost your sanctuary, the one place you can totally relax, decompress, be yourself. I encourage you to take breaks by physically leaving the house during the remodel phase. Call some friends for a long coffee break, work out or take a yoga class, this is the time to explore those areas you’ve left undiscovered. Now would be the time for a mini-vacation or a weekend get away.

When you feel you’ve lost control of your domicile with workers coming and going, it’s hard to enjoy your daily routine. This is where you might question the wisdom of what you’ve done. When you realize the project will take three times as long and cost twice as much your best defense is taking positive, decisive actions. This is where some pre-planning will make all the difference.

Before you first sit down with your contractor be certain to do your due diligence and check out his credentials, call his references and above all confirm his license is valid and up to date. Tell your contractor you reserve the right to question or challenge any decision made. Add contingencies to your contract, such as: the contractor gets less pay if the job goes overtime, more if it takes less time. It’s standard in the industry to pay a portion after each phase is completed so be sure to understand his or her process and what the expectations are at each point.

You can also benefit by setting goals to accomplish one task at a time. Break every phase of the project into small, manageable “to do” lists. This will help you to psychologically gear up for the next stretch and give a sense of accomplishment which puts is little wind in the sails to get you through the next segment to be done. It also prevents you from jumping the gun and clearing out the dining room prematurely and then getting angry when it sits empty for two weeks until they get to that phase of construction.

It’s easy to fantasize about the picture-perfect home, the magazine ideal, but the reality is always more costly and sometimes impractical. A gourmet kitchen with top-of-the-line appliances looks fantastic but if your home is in an average neighborhood be sure you’re not over-improving because if you should need or want to move you’ll never recover those costs. Stay flexible and consider lots of options and have a “plan B” in place at every turn…it will keep you sane.

Moving is one of the four major stresses people face, so making the decision to add to that stress by selling a home via short sale doesn’t sound appealing. The expectations of each bank, the protocols each has in place along with an inexperienced staff make for a very long process and is not for the faint of heart. Sellers who are prepared and can provide their agents with all the necessary documentation will save precious time (which is not on their side) in these transactions. Even in the best of circumstances banks manage to delay, so being prepared to deliver the paper is the first step to keeping your sanity during the sale.

The latest improvement that Bof A, the bank with the most “assets” (REO’s) has made, is requiring all short sales to be uploaded to an electronic processing system. The upside is that they can now track their work- force and see who has dropped the ball. The downside is that they can manufacture a forced delay in processing. Recently I uploaded the initial authorization to communicate with them on a short sale which allows them up to 4 days to process the request. That doesn’t seem like a long time except that they will not accept any other paperwork on the sale until this document has been received. So if I am able to upload the entire package after signing the listing agreement with my client I am forced to sit on the paperwork until they process the authorization. Eventually this should improve processing time but we still have a way to go until we get everyone on board.

Processing a short sale has different phases with each phase bringing the loan package closer to a negotiator who has the authority to make a final decision. Once of my recent short sales was delayed due to the banks request that the HUD 1 be revised to delete the word lender and be replaced by the bank’s name. That little request (which always manages to be submitted on a Friday) cost an additional 2 weeks to get processed. Another transaction was sidetracked due to the opener not identifying the paperwork property. The opener is the person who uploads all the paperwork to the system. If they don’t notate the file accurately then documents don’t get checked off. My negotiator was not aware all the documents were in place because the opener didn’t separate the documents correctly which cost another two weeks.

The final frustration in selling a short sale involves buyers who are unwilling to stay the course. Listing agents are advising sellers to require buyers put money in escrow to hold the house for them until a short sale has been approved by the bank. At that time the usual inspection period begins and the buyers are allowed to request repairs just like a typical real estate sale. Banks are now  requiring agents to inform them of buyers walking away from the offer.  They, like the sellers, are frustrated with fickle buyers who make multiple offers with no consequence for walking away. Serious buyers are well prepared and not afraid to show sellers the money so be ready to go the distance with both banks and buyers and you’ll survive and live to talk about it to your grandchildren.

Beth Mergens is a broker associate with Remax Gold in Folsom, CA. She can be reached at 916-947-3993 or email her at Beth@FolsomLakeHomes.com

Some interesting news is starting to surface regarding the housing market in Folsom Ca and surrounding areas. It’s well accepted that we are now bumping along the bottom of the market looking for a floor and it appears that we might have found it! According to a snapshot of statistics from the local MLS it appears prices are starting to go up! Oops! Wasn’t there supposed to be someone at the bottom ringing a bell or something?

As you can see  this chart of  home sales from Sept. 2005 to Sept. 2010 shows that the bottom of the market was somewhere around Janurary 2010!  That doesn’t mean that you’ve completely missed the bottom. If you are waiting for an approval on a short sale then you’re probably one of the lucky few who got your offer in at the right time.

Overall, Folsom has held onto the higher priced status in comparison to other communities but it still dropped significantly along with most of California. Tom Sullivan, who has since moved his show to the big apple, was right on the money when he said our values increased to 40% which means that we had to come down at least 37% to achieve a normal market. According to current statistics Folsom is down 37% from Sept. 2005! So are we there yet?

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Located in a gated community in Fair Oaks this custom is everything a busy professional with an active family could ask for. You can easily relax and call this home given the large family room with built in cabinetry, gourmet kitchen overlooking a spacious yard and open floor plan.

Located on a cul-de-sac with lots of outdoor space for young children yet designed with entertaining in mind. There is a play structure already set up under the old oak tree and did I mention this has a four car garage? The master suite is elegant with a luxurious bath area and huge walk in closet. There is a downstairs bedroom for guests or office while upstairs you will find the remainder of bedrooms with a larger bedroom that could easily double for a game room.

This property is located in a gated community for added privacy and yet is close to freeway access. For more information email Beth@FolsomLakeHomes.com  or call to schedule an appointment to tour.

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You’ve heard the expression “timing is everything” well, truer words were never spoken when it comes to selling your home. The number one reason homes don’t sell is due to overpricing. I often hear sellers say: We can always come down later- right?  Well…there might not be a chance to do that if you overprice to begin with. Historically when your house goes on the market the greatest potential for buyer traffic is in the first 2 weeks. By pricing it high with the intention of dropping the price later you are completely bypassing your best candidates for purchase.

 The standard purchase contract requires that agents have an obligation to do what is best for their clients. Clearly, showing overpriced listings does not fall into that criterion. With inventory high, agents will undoubtedly choose the homes prices within their buyer’s price range that meet the current Fair market Value. If your home doesn’t fall into that category it’s obvioulsy not going to be shown.

Your neighbors will love you because you help them sell their home. It’s simply the benefit of competition. When a home is overpriced, it not only sits on the market but acts as a selling point for homes that are at market. Buyers are looking for value so if they think I can get the same house for Less…down the block…then that’s where they will shop.

Some real estate agents use this desire against the seller. I know agents who will agree to list your home too high in order to get your listing…plain and simple. The issue becomes very clear once an offer has been presented…from the lenders point of view. Today’s lenders are extraordinarily cautious now and base their loans on accurate appraisals. Appraisers must base their price on comparable properties that have sold. If your home is not able to appraise then it’s usually the seller who has to reduce their price…why risk losing your buyer?

 The first two questions that buyers ask are: What’s the price and how long has it been on the market?  The reality is that overpriced homes will simply sit on the market. Unfortunately, extended time on the market forces the question in a buyer’s mind of  possible bigger problems looming with the walls of the property. That’s a risky way to sell a home because it will create an atmosphere of distrust.

Statistically homes that start their listing life overpriced almost always sell for less than market.  With fewer buyers to choose from , zero leverage because of time on the market, too high an asking price and carrying costs to maintain the property, most sellers find themselves getting the least from their investment rather than the most. It doesn’t make sense to follow the ball down the hill…you want to be in front and use the marketing time wisely.

As a real estate professional committed to happy clients who are eager to get the most from their investment, sharing this must know information with potential sellers in on the top of my to-do list. If you are considering selling your home please contact me for your free market analysis. I can be reached at Beth@FolsomLakeHomes.com

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