Archive for June, 2009

So you want a foreclosure?

Monday, June 29th, 2009

Buying a foreclosure is for the pros with a big checkbook. In Marin a “real” foreclosure is literally sold on the steps of the courthouse on Fifth Avenue in San Rafael. The buyers have several denominations of Cashers Checks that add up to the maximum they will pay. They bid against each other and the bank that holds the loan on the house and is foreclosing on it. The bank has the upper hand because they don’t have to write a check unless the bidding goes over the loan amount.

You will be bidding on a house you likely have not seen on the inside. No bank will lend you money until you buy the home. This is a cash transaction that does not come with title insurance.

When you hear someone say they bought a foreclosure that usually means they purchased a home that has already been foreclosed on by the lender. They are known as REO’s, which stands for Real Estate Owned (by the bank). When buying an REO the paperwork sucks. Banks expect buyers to start their inspection and financing timelines without so much as a signed offer acceptance from the bank. In many cases the acceptance of the offer is conveyed to the buyer verbally. As you know, in real estate verbal does not cut it, the law requires everything in writing. But as long as you are getting a good deal are you really going to fight with the bank that selling the house?

Homes are also sold in pre-foreclosure status which may mean the seller had a notice of default (they are late in mortgage payments) or it is a short sale. In a short sale the seller gets the bank to agree to sell the home for less than the amount owed.

Warren Carreiro

Marin Real Estate Is Hot Again!

Wednesday, June 24th, 2009

The Marin County real estate market is hot again. We are seeing multiple offers on many homes and condos. It looks like the deep price reductions along with first time home buyer tax credits and historically low interest rates have buyers bidding in droves.

One measure of how “hot” a real estate market is what percentage of homes on the market are in escrow. A common formula is:

Buyer’s Market: less than 25% of home in escrow

Neutral Market: 25 to 40% of homes in escrow

Seller’s Market: more than 40% of homes in escrow

The hot price range in Marin is anything $600,000 or less. That is where we have 52% of available listings in escrow. The next price jump from $600,000 to $800,000 is also doing well at 33%

As we move up the price range the picture changes. From $800,000 to one million the figure is 22%, a buyer’s market. Homes at one to one and one half million are 17% and over 1.5 million just 9% are in escrow.

Those numbers include condominiums and homes combined. When we lump all price ranges together Marin has 28% in escrow which is higher than we have seen for well over a year. I don’t know how this will play out with the “talked about” last wave of foreclosures but Marin has not been hit nearly as hard as other counties anyway.

My view is if you are looking for a high end home the prices are dropping but if you are in the lower price range waiting to buy will just cost you more money.

Warren Carreiro

Novato Housing Market is Hot

Monday, June 1st, 2009

Monday, June 01, 2009

The Novato housing market is on fire, the inventory can’t keep up with buyers. At least that is the case for single family homes priced between $400,000 and $500,000. For those that don’t know that is the lower end in Marin County.

A majority of those homes are receiving multiple offers. When agents outside the area visit Marin they tell us our market is booming. The newspapers give a different impression, one that says real estate is still in a slump, and it is for most of the country and many areas of Marin.

What is it about Novato that is drawing all the buyers? Well for one, Novato got hit on prices much more than most other towns. Just a year or two the $400,000 homes were selling for close to $700,000. Novato has a history of pricing volatility both up and down. One January just a few years ago prices increased 10%. Then late last year it seemed you could not price your home low enough to attract buyers.

Today there are 26 single family homes priced between four and five hundred thousand and 20 of those homes are in escrow. That is 77% in escrow which is defined as a strong sellers market. The buyers of those homes are typically investors or first time homeowners.

While Novato may be enjoying its hay day the high priced homes in Marin are taking price reductions daily. There just are not that many buyers willing to spend a couple of million for a home.

Warren Carreiro, Broker