BANK OWNED (FORECLOSURE) HOME SALES DATA FOR FOLSOM, CA–DEC 2011
BANK OWNED (FORECLOSURE) HOME SALES DATA FOR FOLSOM, CA – DECEMBER 2011
This is the latest monthly report of a four-year study of bank owned (REO) home sales in Folsom, CA. This report covers December 2011.
There were 16 REO homes sold in Folsom this month, up from 12 the previous month.
The average days-on-market increased from 49 the previous month to 67 in December. Two of the homes had been on the market for over 200 days and two others had been on the market for over 100 days. Obviously, some of the old inventory was cleared out. However, 38% of the homes that sold were on the market for two weeks or less, proving once again that well priced homes in good condition sell quickly.
The 16 REO homes that sold represent 23% of all homes sold in Folsom this month. The very low bank owned home inventory is one reason for this statistic.
The available inventory of bank owned homes in Folsom dropped to a 7-month supply, the lowest inventory level of bank owned homes in the past 15 months. The inventory for bank owned homes in Folsom peaked at a 2.8-month supply in January and has steadily declined since. The available inventory for ALL homes available decreased to a 1.6-month supply, down from a 2-month supply the previous month. Pundits tell us that a 6-month supply is neutral market, so Folsom remains a strong seller’s market for both bank owned homes and all other homes on the market.
The average cost-per-square-foot for bank owned homes was $ 141 in December, unchanged from November. The average cost-per-square-foot for ALL homes sold in Folsom in December was $ 157, up one dollar from the previous month. It has been moving within a narrow range for the past year.
The overall sales price for REO homes was 96.50% of the final asking price and 89.38% of the original asking price. Both of these numbers are lower than usual. The 89.38% number is a reflection of the banks ability to judge the true market value of their “toxic assets.” They did not do well on those homes sold in December. In addition, only 32% of the buyers paid the asking price, or more, for their bank owned homes in December. That too is lower than usual.
Based on the cost-per-square-foot statistic, bank owned homebuyers paid 10% less for their home than did buyers of non-bank owned homes in December. When we apply that to a 2500 square foot home, it represents a savings of $ 40,000: a considerable savings.
If you have any questions about purchasing a home in Folsom, a Folsom REO, or an REO anywhere in the area, feel free to give us a call (916) 337-0658.
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Short Sale 101 – Part 3
Short Sale 101, Part 3
In the earlier posts in this series, we discussed the primary requirements a distressed homeowner must meet in order to obtain a short sale approval. It might be helpful, at this juncture, to go into some detail with respect to the documentation that will be required if the bank before they will consider approving a short sale. Borrowers contemplating a short sale should be aware of these document requirements.
As we indicated earlier, everything must be supported by documents that will be used to verify the borrower’s claims. Therefore, one should take care that all of the information provided matches.
The first document that any bank will require is a written request for approval of a short sale. The bank has to know what you want to accomplish. Second, is the borrower’s hardship letter, explaining in some detail the nature of the financial hardship that prevents that borrower from continuing to make their monthly payments.
The third document required will be the borrower’s authorization allowing the bank to speak to the borrowers Realtor©. Without that signed authorization, the bank may not discuss your situation with your Realtor© or anyone else.
Almost every bank will require copies of the borrower’s tax returns as filed for the past two years. The bank will require every single page and every single schedule filed with the IRS. They will match the data provided in the tax return with other documentation you will have to submit. All W-2s and/or 1099s filed with the IRS must be included for the tax years involved.
The bank will also require documentation verifying all income streams, paycheck stubs, commission checks, documents reflecting bonus payments, tips or any other documentation pertaining to the borrower’s income. If the borrower’s income comes from a business that they own, they will require copies of the books for that business.
The bank will require documentation reflecting all of the borrower’s liquid assets, checking accounts, savings accounts, money market funds, Christmas savings account funds and documents pertaining to stock, bond, mutual fund or other investment accounts.
They will also require documentation pertaining to non-liquid assets such as any other real estate owned, vehicles owned or leased or other major assets owned.
If, as frequently happens, the bank is slow in processing your short sale request, it may be necessary for you to provide more current documentation on your income or your assets. They always want the most up-to-date information. In addition, the processors will not forward your file to a decision-maker unless all of the data is current. There is a no tolerance policy involved here. Space borrowers who are not diligent record keepers may find it necessary to contact their banks, investment companies to obtain the required documentation on that company’s letterhead. This process could take some time. It may be prudent to collect the documents in advance so that you do not delay the process of submitting your short sale package.
We reiterate that it is very important to select the right Realtor© to handle your short sale. A short sale package may exceed 110 pages of documentation when submitted to the bank. If it is inaccurate are incomplete, the bank will reject it. Most distressed homeowners have not made their monthly mortgage payment for some time. Therefore, the foreclosure process has begun and time is of the essence. Delays on the part of the borrower only hinder their chances of success.
If you have any questions about the information covered in this post, or any of the previous posts in this series, feel free to give us a call at 916-337-0658. We will be happy to clarify any of the points made.
Stay tuned for more information on the subject.
FANNIE MAE & FREDDIE MAC ANNOUNCE EVICTION MORATORIUM
FANNIE MAE & FREDDIE MAC ANNOUNCE EVICTION MORATORIUM
The two huge government sponsored entities that own or control most of the mortgages in this country have announced a holiday eviction moratorium through January 2, 2012.
The goal is to provide distressed homeowners who are about to be evicted a few days grace period. Unfortunately, it is only a very short reprieve. January 2nd will be here very soon. Let us hope that this will help some of these families at a very difficult time. Perhaps the extra few days will allow some to find better alternative placed to live as they struggle to get their lives back on track.
OWNING A HOME CHEAPER THAN RENTING
OWNING A HOME CHEAPER THAN RENTING
A recent Wall Street Journal article indicates that owning a home in certain markets is cheaper than renting. The Journal’s third-quarter survey covers the 28 largest metropolitan areas. The Sacramento metropolitan area is one of those market areas where homeowners fare better than do renters.
The article explains that lower housing costs combined with rock bottom mortgage
interest rates make home ownership less expensive than they have been in the past 15 years. Included in their calculations are the cost of real estate taxes and insurance. (Naturally, the taxes and mortgage interest are tax deductable.)
The article goes on explain that a major reason more renters are not taking advantage of the situation is the difficulty in qualifying for a loan. Lenders are far more cautious than they have ever been when considering a borrower’s qualifications. Credit issues considered minor in years past can be deal breakers.
Select this link to read the article:
There is considerable detail included.
Those who wish to purchase a home but are not presently qualified would be well advised to start planning on how to improve their financial picture in order to qualify for financing in the future. Consulting a loan-originating professional may be the best course of action. Once the skeletons in the financial closet are identified, plans can be made to remove them. The process may only take a few weeks or it may take several years.
A few steps to take immediately are to:
- Pay all of your bills ON TIME. Pay more than the minimum payment when possible.
- Avoid adding credit accounts
- Pay down outstanding account balances when ever possible
- ALWAYS pay your mortgage payment or rent ON TIME
- Pay the few dollars it costs to get a credit report and check that report for errors. Unfortunately, errors are common and can result in denial of a mortgage loan application.
- Try not to use more than 50% of your credit line on any account. Less is better.
- Do not close an account when you have paid off the balance. Charge a small amount on that account ever month or two.
- Maintain at least three credit accounts in good standing at all times
- Pay your taxes on time.
There are agencies that can help debtors. Some offer their services free of charge or for a nominal fee.
The bottom line is that those who prepare are more likely to achieve their goal of home ownership, and the cost of the associated financing will be far lower.
BANK OWNED (REO) HOME SALES DATA FOR EL DORADO HILLS, CA – NOVEMBER 2011
BANK OWNED (REO) HOME SALES DATA FOR EL DORADO HILLS, CA – NOVEMBER 2011
This is the latest monthly report of a four-year study of bank owned home sales in El Dorado Hills, CA. This report covers November 2011.
There were seven bank owned homes sold in El Dorado Hills in November, down from 10 the previous month. A low inventory is the primary reason.
The average days-on-market decreased from 56 in October to 29 in November. None of the homes had been on the market for over 100 days. Twenty-nine percent of the homes that sold were on the market for two weeks or less.
The seven bank owned homes that sold represent only 16% of ALL homes sold in El Dorado Hills this month. This is a much smaller segment than normal, largely due to the low available inventory.
The available inventory of bank owned homes in El Dorado Hills decreased from a 1.7-month supply the previous month to a 1.5-month supply in November. That inventory level has not been over a 2-month supply since March of this year. The available inventory for ALL homes available dropped from a 4.2-month supply the previous month to a 2.9-month supply in November. Pundits advise that a 6-month supply is a neutral market, so we are still looking at a seller’s market for ALL homes in El Dorado Hills.
The average cost-per-square-foot for Bank Owned homes was $ 126 in November, down one dollar from the previous month. The average cost-per-square-foot for ALL homes sold in El Dorado Hills in November increased to $ 153, up from $ 146 the previous month.
The overall sales price for bank owned homes was 101% of the final asking price and 97.1% of the original asking price. Yet 86% of the buyers paid the full asking price or more for their bank owned homes in November. Apparently, these homes were well priced and buyers decided to take advantage of those prices along with excellent mortgage interest rates.
Bank owned homebuyers paid 83% of the cost-per-square-foot for their REO home when compared with the cost-per-square-foot for ALL homes sold in November. That is a $ 23 pre-square-foot savings. When applied to a 2500 square foot home that represents a savings of $ 57,500, a considerable sum.
If you have any questions about purchasing any home in El Dorado Hills, an El Dorado Hills Bank Owned Home, or a Bank Owned Home anywhere in the area, feel free to give us a call (916) 337-0658.
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