The San Francisco East Bay Real Estate Market Roller Coaster Ride!!!

15 Mar

stock-photo-amusement-park-roller-coaster-415941

Today, I woke up hoping to hear that my dear client was finally getting into contract after a “rough ride.” This frustrated buyer had a long wait in contract with a prior short sale, where the seller changed his mind and decided to allow a foreclosure so he could milk the free rent to the bitter end.  We have tried to buy in a neighborhood where several unscrupulous realtors have double ended contractsbelow market on shortsale properties squeezing out competition that would have bid the properties to market which has also been frustrating.

So, in identifying this house, we were hopeful that an aggressive bid on an underpriced home would yield success! With an offer cut-off  of 5pm yesterday, we submittted with time to spare.  So, bidding appropriately in excess of 25% above list price, we made allowances for repairs needed.  At 6:30pm, I texting the listing agent to determine the number of offers.  She just came up for air long enough to respond at 9:15 this morning to text back – 86 offers.  OMG!  What a ride this market is giving us!

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Shortsheeting Inventory-Starved California Real Estate Market

28 Feb

Self Serving Business Practices

“Out here in the field” I fight for my clients trying to get them into contract battling the all cash offers and bidding wars.  Some real estate brokerages are developing a reputation for controlling the market unfairly.  Such an example appeared today on MLS in the form of a Pleasant Hill listing sold short and under market.  There was never an open house.  And yet, the lender will be presented with a package for short sale approval requesting less than 100% principal pay-off in an inventory starved market.  This is just plain wrong!  Don’t you think the laws should be revised to require a minimum of 2 weekends of exposure or 10 days marketing for a property to be approved as a short sale when there is no inventory in a local market?

There should be rules for the bailout money to protect our native interests.  If  Congress  required  a minimum of  10 days exposure to the market on short sales & foreclosures, it would lessen the amount they underwrite in bail-outs and counter these self-serving practices.  The lender should require a spreadsheet detailing the terms of the top 10 offers be presented with a short sale package and MLS printouts documenting that the property has been offered to the market for at least 10 days.  Further, if they also require that these properties be offered exclusively to owner-occupants for the first 30 or 45 days on the market, it will grow the local economies more with the higher investment in the areas surrounding these homes. Owner-occupants tend to maintain their properties better.  It will drive more economy through more loans being funded by through the local banks.  And it will put Joe American who needs to obtain a loan to buy in a better position to compete in the California marketplace.  Today’s real estate market is  presently dominated  by foreign all cash investors, who will be everyone’s landlord if we do not at least try to to do something about having our bail-out money benefit local residents.

The agents that double end properties selling properties underpriced without really offering them full market exposure are:

1.  not serving their client in achieving the highest possible price,

2.  fleecing the banks out of a fair market value

3.  sullying the reputations of fellow realtors who would never do business in this unfair manner.

4. making it difficult for appraisers trying to sort through disparate values between normal comps and those undersold through self-serving practices

If a 10 day minimum marketing time was required to be documented, the listing agent (and brokerage) would have to open the property to competition giving everyone a fair shot at bidding or overbidding as is prevalent in today’s market.  (I, for one, have a very qualified buyer who would have paid more than $399,900 for a Pleasant Hill property with a 1700 sq. ft.  footprint, even if it was a fixer.)  Please “Like” this proposal and ask your Congressional Representative to back these changes covered in the ” Congressional Commitment to Home Ownership” already submitted to Diana Feinstein and Representative Garamendi.

Shortsheeting Inventory-Starved California Real Estate Market

28 Feb

Self Serving Business Practices

“Out here in the field” I fight for my clients trying to get them into contract battling the all cash offers and bidding wars.  Some real estate brokerages are developing a reputation for controlling the market unfairly.  Such an example appeared today on MLS in the form of a Pleasant Hill listing sold short and under market.  There was never an open house.  And yet, the lender will be presented with a package for short sale approval requesting less than 100% principal pay-off in an inventory starved market.  This is just plain wrong!  Don’t you think the laws should be revised to require a minimum of 2 weekends of exposure or 10 days marketing for a property to be approved as a short sale when there is no inventory in a local market?

There should be rules for the bailout money to protect our native interests.  If  Congress  required  a minimum of  10 days exposure to the market on short sales & foreclosures, it would lessen the amount they underwrite in bail-outs and counter these self-serving practices.  The lender should require a spreadsheet detailing the terms of the top 10 offers be presented with a short sale package and MLS printouts documenting that the property has been offered to the market for at least 10 days.  Further, if they also require that these properties be offered exclusively to owner-occupants for the first 30 or 45 days on the market, it will grow the local economies more with the higher investment in the areas surrounding these homes. Owner-occupants tend to maintain their properties better.  It will drive more economy through more loans being funded by through the local banks.  And it will put Joe American who needs to obtain a loan to buy in a better position to compete in the California marketplace.  Today’s real estate market is  presently dominated  by foreign all cash investors, who will be everyone’s landlord if we do not at least try to to do something about having our bail-out money benefit local residents.

The agents that double end properties selling properties underpriced without really offering them full market exposure are:

1.  not serving their client in achieving the highest possible price,

2.  fleecing the banks out of a fair market value

3.  sullying the reputations of fellow realtors who would never do business in this unfair manner.

4. making it difficult for appraisers trying to sort through disparate values between normal comps and those undersold through self-serving practices

If a 10 day minimum marketing time was required to be documented, the listing agent (and brokerage) would have to open the property to competition giving everyone a fair shot at bidding or overbidding as is prevalent in today’s market.  (I, for one, have a very qualified buyer who would have paid more than $399,900 for a Pleasant Hill property with a 1700 sq. ft.  footprint, even if it was a fixer.)  Please “Like” this proposal and ask your Congressional Representative to back these changes covered in the ” Congressional Commitment to Home Ownership” already submitted to Diana Feinstein and Representative Garamendi.

19 Feb

Howell Family Jewels

stock-photo-federal-income-tax-form-with-colorful-yellow-house-mortgage-interest-deduction-2634169With so many clients trying to compete in our low inventory real estate market against all cash offers, some of my clients have been exploring how to liquidate assets to achieve that leverage too. For like-minded individuals, BEWARE of the revised Home Mortgage Deduction rules Congress invoked recently. If you plan on putting a loan on after the fact, keep the 90 day rule in mind. It is critical that people using this cash purchase strategy put a new mortgage in place within 90 calendar days of the close of escrow. Otherwise, they may have an unpleasant surprise with the I.R.S. ruling a tardy loan placement having non-deductible interest. There are other tricky rules about deductibility if you place an equity loan to reimburse yourself for home improvements made. So, be sure to consult your accountant to achieve the right strategy for your situation or read the I.R.S. Publication 962…

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Extreme Seller’s Market Pendulum Swing in Northern CA Real Estate

3 Apr

           k6895408 Foto search Pictures Photograph Royalty Free

The insanity of today’s real estate market was never more evident

than in an email I received last week from a fellow realtor. It read, ‘if you saw the newly listed property $209,000 on Shakespeare in Concord, CA be glad if have not written up your contract yet because it already has a whopping 45 offers!’  OMG!  If it is not tough enough for the first time homebuyer to get a break while competing against the investor 100% cash offer, now people are competing like pirhana for properties!  Overbidding is the rule in Contra Costa, Alameda & San Francisco Counties now. This really makes it even harder for the first time homebuyer with 3.5% down payment FHA transactions.  They need to save up even more money to be able to absorb some of the extra loan that any shortfall in appraisal would force in order to remain in contract.  With appraisals coming in ever more conservatively, the listing agent is less inclined to “take a chance” with a low down payment contract.    Since “Cash is King,” listing agents are encouraging their sellers to accept the all cash offers (once again) over the first time home buyers and owner occupied contracts.  So once again, the rich get richer and the poor get poorer!

How can we, as citizens, get Congress can do something about this?  

If this inequity bothers you like it bothers me, let’s demand them to do something about it!  I am starting a Request for a Congressional Initiative to give a $20,000 Forgiveness of the Gross Capital Gain sellers are being hit with if they are requesting a Short Sale.  This will make it financially beneficial to incent the seller to accept owner-occupied financed contracts.  Heck the I.R.S. is settling lot of these tax claims for less right than full price right now, anyway.  It should not be hard to get this initiative passed through Congress.  Why not have it help the first time Homebuyer over the filthy rich investor whose cash is pushing the owner occupant out of contention.   Call your Senator and Member of the House of Representatives today and insist that they start working for the little guy again, instead of for the rich!  We can do this!  This proposal was penned by Hollie Felts-Howell, a Realtor with Better Homes & Gardens Mason McDuffie’s Orinda branch.  Contact Hollie via email at hollie.howell@bhghome.com or go to her websites www.focusedonresultsrealty.com and www.hollieshomes.com for more unsolicited opinions.

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Political Termilology on Oil “Subsidies”

29 Mar

With the average consumer reeling over increased gas prices at the pump& attempting to “hold on” through the economic recession which we are weathering, it is hard to hear of the Big Oil Companies earning billions in excess profits over last year and not get angry.  So, with President Obama calling for an elimination of Big Oil Subisides today, I was immediately incensed.  But, then I looked into it and learned that these so-called subsidies are a mislabeling of an Accounting Standard Business Operating Expense Deduction.  That made me unhappy with the Headlines.  Why do we not call people on it when they mis-use the English language for Political Benefit?

The “so-called Oil Subsidies” represent about $4 Billion dollars in total profit retained by the Big 3 Oil Companies, which represent a couple of accounting deduction treatments.  The biggest is the Domestic Manufacturer’s deduction on  on profits which allows all other U.S. industries to be forgiven 9% of their profits from taxation and already penalizes oil companies by lowering their threshold down to 6%.  The next “so-called subsidy”  is a deduction for expenses on called Intangible Drilling Costs which allow the oil industry to expense for Oil Exploration Drilling & Reserves.  This is a very real cost of doing business and is key in encouraging more local oil exploration and reducing our dependency on Middle East oil reserves.  And, the final “so-called subsidy”  is a deduction called Depletion, which is normal for any resouce-based industry whether it is silver, gold or other mining and forestry commodities. All of these ” so-called subsidies” are Operating Expenses which are mis-named.

While the drive is “On” to Shrink the size of the Federal Government (having nearly doubled since the 80’s) where is the smartest way to cut back without risking our National Security?  How do we achieve the “right Balance?”  To start with, our Military Budget has doubled in size and expenditure while US. influence is seen as meddling. I think we need to figure out ending the wars and halve our Military Spending and all of the sudden our image Worldwide will improve in addition to our deficit.  The fervor of terrorist organizations will have to lessen as we give them less material to feed off of in current events.  Will the threat go away, “No.”  But the drain on our budget will go away.  And since when has the threat of lowering everybody’s budget not improved efficiencies?

While helping out our neighbor, Brazil with loans for Exploration on behalf of their national Oil Company Petronacionale may seem unnecessary, this kind of relationship addresses 2 international concerns:

(1) providing more local oil reserves thereby reducing our dependency on Middle Eastern Oil

(2) keeping positive relationships with our allies, particularly in our hemisphere

 What is clearly evident from such strategies is that our government is better at giving away money in the form of loans & guarantees than it is in putting strings on the generosity.  Firstly, shortly after teh promise of this funding, the Brazilian President Rousseff ran off to China to cement contracts for the oil production due to come the  Tupi underwater fields.  And, of course, we cannot forget the bank bail-outs, a complete lack of requirements to use bail-out monies has probably doubled the size of the bail-out if not more by encouraging Banks to foreclose and force shortsales over subsidizing their activities to keep people in their homes and perform loan modifications to simply reduce the interest rates of people paying through hardship.

This makes it easy to fail to appreciate our government subsidizing the Brazilian national Oil Company Petrobas except to encourage alternative sources in the TransAmericas .

Gas Boycott

28 Mar

So didn’t it make your blood curdle to hear that all of the recent gas hikes are being driven by speculators taking excess profits at our expense?  Don’t you just love that the greedy people in our country just never get enough (out of us when we are struggling out of a recession) while they make us into turnips at the gas pump?  The stranglehold is largely our own making. We have not been smart enough to develop alternative energy strategies enough to “cut-off PG&E and their SmartMeter rape the consumer strategy and we have not figured out how to make electric and hydrogen energy alternatives economically feasible transportation alternatives to the gas pump.  So, how do we combat this evil gremlin that is driving our already ridiculously high gas prices higher?  TAX the HELL out of them!  We have witnessed Congress impose excess profits taxes in the past, but we never seem to have the guts to do this with a Republican Congress!  Let’s show them we mean business by having the excess tax dollars go to financing alternative energy development plans already in our budgets.  Play “FIRE with FIRE” and show them that if they keep on gouging us, we will keep on shrinking our usage until we don’t need their greed driven products anymore!

There is an email going around suggesting everyone boycott certain oil companies.  I am for us boycotting those who are the greediest if we can “prove” who it really is, but can we prove it?.  I am for us exposing companies excess profiteering, but the email suggesting a boycott of the “BAD BOY” oil companies they targeted does not take into effect that:

– the little oil producers they endorse cannot handle the demand on supply if it were shifted to them from the Big Oil companies

– the “oil”igopolies will simply shift their supplies and sell to each other, further driving up prices to answer that tactic

– the best answer we can provide to combat their greed is to disincent excess profits and tear down their opportunity to take advantage of us in the future!