Short Sale Advice from Nic Petrossi, Orange County Realtor

There are 5 things you can do when you realize you can no longer make your mortgage payments:

1. Nothing
2. Deed in Lieu (Hand the Title, and keys, back to bank)
3. Short Sale
4. Bankruptcy
5. Loan Modification

All of these options will adversely affect your credit.  However, some options ARE better than others.

For example, the on the severity scale of how bad your credit will take a hit, on a scale of 1 to 10, an outright foreclosure or bankruptcy is like an 11.  The Deed in Lieu is probably the dumbest thing to do because the bank will let you stay in the home rent free for a while anyhow while you work this all out.

A Loan Modification is the best route to take, but you have to know what you’re doing.  There are only a handful of legitimate Loan Modification companies out there that know how to handle this for you (for a fee) but are well worth the money.  Making your monthly payment smaller could allow you to keep your home and sometimes the bank will reduce the AMOUNT owed (principal balance). 

A short sale is the best route to take, usually, if you…A) Can’t get a loan modification, B) The loan modification doesn’t help anyhow because you can’t afford even the new amount, C) The home you’re living in is your principal residence (i.e. it’s not an investment property), and D) you can work out discharge of indebtedness with the IRS.

We get the term “short sale” from the fact that the bank is taking less from the proceeds from the sale of your home than the current loan amount owed.  Ergo, the bank comes up “short.”  In other words, the bank takes the hit in the pocket and you take the hit to your credit.  When you short sale, the amount “forgiven” you by then bank for the difference owed and the final purchase price is actually considered a “gift” by the government, and the government will tax your income accordingly. 

Example:   You bought your home in 2006 for $750,000.  The home is now worth $600,000 and you’ve lost your job.  Your wife (or husband) can’t handle the payments with their income alone.  You try to call the bank and work out a loan modification but the bank says “no” even though the person on the phone is not authorized to tell you “no.”  So you call an expert who can negotiate with the bank for you.  THAT doesn’t even work so now you must short sale your home.  You find a real estate agent who lists the home you once bought at $750,000 for $575,000.  The agent tells you that you need to get together a “packet.”  The packet consists of two years taxes, 2 months bank statements, a hardship letter to the bank explaining why you can’t make your payments, and any other documentation of income.  The agent gets several offers and eventually (after several weeks) submits the highest and best offer (we’ll say $600,000 for the sake of this discussion) to the bank with the “packet.”  The packet with the offer reaches the bank’s loss mitigation department where it sits on a desk with several other offers and packets on several different properties.  If there are 2 or more lenders on your home, the packet and offer have to be sent to those banks as well.  When there is a Second on the property, it gets sticky because the First Lien Holder always wants to screw the Second Lien Holder and the Second wants to get something out of the deal.  The negotiations between the 1st, 2nd (and sometimes) 3rd Lien Holders will often delay this process even longer.  Let’s say the bank settles on the $600,000…and you owe $700,000 since you originally put down $50,000 when you bought the place.  Now, you are taxed on that $100,000 as if you made that money since it is considered a gift by the IRS.

The good news is that there was a bill passed by Congress to relieve you of that “gift” taxation as long as you live in the property as primary residence and can prove insolvency (that your bills are more than your income).  You would then apply for this using IRS form 982 called “Reduction of Tax Attributes Due to Discharge of Indebtedness.”  You apply when you file your income taxes.  The word on the streets is that the IRS is so back-logged that they are not going after people for the difference on their home’s short sale, but I wouldn’t trust in that information but consult a CPA or lawyer to see how you’ll be affected.

Need help selling or buying a home in Orange County? 

Contact me, Nic Petrossi with Prudential at (714) 272-3646 or email me at npetrossi@yahoo.com

Click here to check out my website —–>    CLICK HERE

Yorba Linda Real Estate Agents Top 5 Reasons You Need a Realtor for Yorba Linda Homes

Re-blogged by 0 agents

Why Even Use a Realtor? Top 5 Reasons from a Yorba Linda Placentia Realtor (edit/delete)

A Placentia Yorba Linda Real Estate Agent’s Top 5 Reasons to Use a Realtor:

I was noticing from talking to my clients that people don’t like to sit around when they’re ready to buy a home….they are actively looking online themselves.

The problems with this is that you have people looking on Zillow.com and Realtor.com and Redfin.com and finding homes that are often already off the market, in escrow, or sold.  Also, these websites do not let the consumer exclude or include features or special conditions (e.g. “short sales”).  So, I will often get emails from my clients with MLS #’s saying they would like to see these homes.  Don’t get me wrong, Zillow.com and Realtor.com can be good sources of information.  However, when it comes to finding homes that are currently on the market, these websites are not always the most up-to-date and reliable.  The price of the home may be different now, or, as mentioned, the home is already sold.

So, reasons to use a Realtor to help you find a home?

#1   They have access to the world’s most powerful home-searching tool — the MLS.  “Oh, but Nic, I’m searching the MLS through a Realtor’s website or through Redfin or Zillow,” one may say.  Yes, but the MLS on these sites does not allow you to eliminate certain features or add certain features that can streamline your search and save you hours or even days of looking, spinning your wheels and wasting time. 

#2   Private Remarks.   Real estate agents are privy to what are called “Agent Private Remarks” when they pull up a property profile off the MLS.  Real estate agents will give out insider info on a property or sometimes sensitive information that the public is not aware of which could be extremely valuable.  For example, the private remarks could read that the home is not available to show until June 1st, which would save someone from driving to the property and spinning their wheels when the home really isn’t even able to be shown.

#3   Market Knowledge.  This is one of the main reasons people hire a professional.  They want someone who knows the market, who knows the area, who knows what homes are really selling for in a given area.  This kind of knowledge is invaluable when it comes to putting an offer on a home.  The agent can run “comps,” or comparables of all recent sold homes in the neighborhood area to find what a home should REALLY sell for. 

#4   Negotiations.  Buying and selling a home is not a cut-and-dry venture.  The price of a home is rarely fixed and it is up to the skilled communicator and negotiator to hammer out a deal for their client.  Most people would rather have a professional handle this on their behalf.

#5   Peace of Mind.  What would you pay for peace of mind knowing that your Realtor has the situation under control.  Your Realtor is handling the paperwork, checking the deadlines, protecting you from potential legal pitfalls or problems with the property.  If you have someone strong and reliable in your court, you can rest your head at night knowing that it’s all going to work out.

 

Contact Nic Petrossi for a market evaluation of your home’s value and to put your home on the market.

Nic Petrossi specializes in Yorba Linda Homes, Placentia Homes, Brea Homes, Fullerton Homes, Anaheim Hills Homes and all of Northeast Orange County.

(714) 272-3646  Cell

Click here for Nic’s website ——>   WEBSITE

NIC PETROSSI (714) 272-3646 Brea Realtor Placentia Realtor Fullerton Realtor Yorba Linda Realtor

Ladies and Gentlemen,

The Market is changing.  Dramatically.

There are dozens of Brea real estate agents, Yorba Linda real estate agents, Placentia real estate agents, Fullerton real estate agents, Anaheim Hills real estate agents from large firms (e.g. Prudential, C-21, Seven Gables, REMAX) who are saying it is EXTREMELY difficult to get their buyers into a property.

What does this suggest???

The market is shifting right in front of our eyes.  I’m coming out now to say — WE’VE HIT THE BOTTOM…at least in the under $500K price range for homes in excellent condition. When it comes to the $300K price range in Northeast Orange County, fuggetaboutit.  What would you say if I told you there are properties with 10, 20, 30 offers on them going for $100K over asking price?  That’s right, if it sounds too good to be true, it is.  A fellow agent in my office made an offer with a client on a home listed at $289,000.  His client’s offer?  $320,00.  He went up to $331,000.  The assistant for the listing agent of this Bank Owned property in Anaheim called to tell him the bad news:

   “Aaron, we have an offer for $370,000.”

             Fuggetaboutit

It’s time to stop listening to what your friends and family are saying or what you’re hearing on TV or reading in the paper…if you want a nice home for a nice price this year, you need to get your “ducks in a row.”  You need to get pre-qualified, you (and your real estate agent) need to be constantly watching for the properties to pop on the market.  This is beginning to look a lot like 2002 again except the banks aren’t going to let it get away from them again and have it crash down on their heads.  The safeguard will be VERIFY, VERIFY, VERIFY.  Verify income, verify downpayment, verify DTI.

Call Nic Petrossi, Prudential for any questions, dialogue, to start the process of finding that right home for you.  Need to sell your home?  I do that too.   (714) 272-3646  cell  (714) 257-3606 office 

npetrossi@yahoo.com

Click here for website:       CLICK HERE!

Nic Petrossi, Anaheim Hills Realtor – Complete List of Bank Owned | REO | Foreclosures as of Nov. 4, 2008

The following is a complete list of all bank owned (REO, foreclosures) of Anaheim Hills homes as of Nov. 4, 2008.  It is interesting to note that the percentage of these REO properties to regular sale properties in Anaheim Hills is a very small percentage.  The number of bank owned homes vs. regular sale homes in Anaheim Hills is 9 to 192 or 1 out of 20, That is, less than 5% of Anaheim Hills homes on the market are bank owned (REO) properties.  This is a good sign for the real estate market in Anaheim Hills and bodes well for the future direction of the market.

To contact me, your favorite Anaheim Hills Realtor, visit my website —-> CLICK HERE  to search Anaheim Hills homes, homes in general, or to set up a time to view these or any Orange County homes.

 

Tue, Nov 4, 2008 10:44 PM

RES	MLS #	Status	P	V	H	T	Q	Type	A/D	Address	City	Area	Zip	TGNO	Trct/M	Bd	B t/f	Sty	Gar	SqFt	Yr Blt	Price	DOM
1	P657119	A	2		H	T	Q	CONDO	A	5424 Snow Wood B	AH	77	92807	740d7	OTHR/0	3	2/1	2	1	1,068	1973	$214,900	44	*
2	P652980	A	1		H	T	Q	SFR	A	5626 E VISTA DEL VALLE	AH	77	92807	770E3	OTHR/0	2	2/1	1	2	1,116	1973	$390,000	74
3	P662560	A	1		H	T	Q	SFR	D	350 N Lakedale Dr	AH	77	92807	770B2	OTHR/-	4	2/2	1	3 A	1,903	1978	$399,900	7
4	P661953	A	8		H	T	Q	CONDO	A	511 S San Vicente Ln	AH	77	92807	770G3	FIRZ/-	3	3/2	2	2 A	2,225	1997	$519,900	12
5	P650691	A	7		H	T	Q	SFR	D	242 N Camino Arroyo	AH	77	92807	770F1	OTHR/0	4	2/2	2	2	2,200	1974	$539,900	89	v
6	P637820	A	1		H	T	Q	CONDO	D	1230 S Wildview Ter	AH	77	92808	771D2	CAMB/*	4	3/3	2	2	2,400	1999	$549,900	135	*
7	R808588	A	12		H	T	Q	SFR	D	4120 E Summer Creek Ln	AH	77	92807	770A3	OTHR/0	4	4/4	2	3 A	3,200	2003	$649,900	37
8	P663053	A	7		H	T	Q	SFR	D	416 S Rolling Hills Pl	AH	77	92807	770D3	OTHR/-	5	3/2	2	3 A	3,033	1972	$679,900	4
9	S541761	A	9		H	T	Q	SFR	D	124 S Martin Rd	AH	77	92808	770H1	OTHR/0	5	4/3	2	4	4,728	1990	$1,650,000	100	*

NIC PETROSSI, Orange County Homes Specialist — Where are We Headed?

According to the Orange County Register (who uses Data Quick for their home sales data), we are 56% better off than this time a year ago.  (If we didn’t count new home sales we’d be looking at more like 77%).  Here is how things will go down for the end of 2008 and the beginning of 2009:

End of 2008

   Typically the Holiday season is slow for real estate.  People are thinking of a head count for Thanksgiving and when to pull out the Christmas decorations from the boxes in the garage.  However, this year will be different.  There is a force in the real estate market called “pent up demand.”  This is when there are buyes who were “fence sitting” waiting for the market to hit bottom who are now coming out of the woodwork to buy a home.  This influx of buyers will mean increased demand and decreased supply.  Expect November and December of 2008 to be better than the November and December of 2006 or 2007. 

 

Beginning of 2009

   Although we will still see foreclosures and short sales popping up all over Orange County, we won’t see AS MANY as we have at the end of 2007 and beginning of 2008.  Orange County is faring much better than the Inland Empire (IE) where it seems like 2 out of 3 homes for sale are short sales or bank owned REO’s.  The balance between buyer and seller will be almost restored as we head into summer of 2009.  We won’t see as many “low ball” offers and the pendulum will swing back in favor of sellers.

 

Contact me through my website (phone # on website) if you’re looking to buy or sell a home in North Orange County ———->  NIC’S WEBSITE.

Boo!…Are You Scared Yet? Thoughts from a Placentia Realtor

Well here we are, it’s almost Halloween and it’s amazing how time flies!

We have seen so much happen in the last 4 years…the housing BUBBLE DEFLATION (the “bubble” is looking more like a deflated jumper on the lawn of a 7 year old birthday party).  We have seen banks scramble as they take back thousands of placentia homes, yorba linda homes and orange county homes back on their books.  We have seen BLACK MONDAY when the stock market plunged with almost unprecedented decreases.  (Scary, but felt almost the same way when I was watched the World Trade Center go down).  It has been a very volatile last few years.  Presently only home owners in North Orange County who bought homes 2003 or sooner have homes worth more than when they were purchased.  It has taken 3 years for homes to go back down to 2004 values.  Now, most buyers who have been sitting on the fence are eyeing the bank owned repos feeling that the best deals are in the foreclosure market.  We’re seeing bank owned foreclosures with attracting multiple offers and agents in our Prudential Brea office are complaining that in some areas they cannot win the bidding war to get their client a home! 

When you have multiple offers, you’re usually near the bottom of a downward trend.  It has taken a long time, but sellers are finally becoming more realistic about the true worth of their home.  Those that are unrealistic or just “testing the waters” of the market are taking their homes off the market when they sit for months and months with no serious offers.  Less people put their homes on the market in September / October / November / December so what we’re seeing is a decrease in inventory for re-sale homes and an increase in the number of buyers entering the market who are hoping to time the “bottom” perfectly (like trying to buy when stocks are at their absolute lowest). 

So, when is a good time to sell?  Answer:  Whenever you HAVE TO.  I’m finding that sellers who HAVE to sell are selling their homes because they’re lowering their prices to attract offers.  Sellers who WANT to sell will not sell their homes unless they’re willing to compete with the HAVE TO sellers and join the elite group who are pricing their homes under market, ahead of the bell curve.  These are the sellers that will look back and be glad they did what they had to do.  Those that played around with trying to get top dollar will be looking back saying, “Gosh darn, I should have been more aggressive.”

To Spend or Not to Spend — Tips for New Realtors (and experienced Realtors?) from a Placentia Realtor / Yorba Linda Realtor

When I started my career real estate as a Placentia Realtor, Yorba Linda Realtor, Brea Realtor, I wanted to do EVERYTHING in terms of marketing.

I wanted to do the postcards, the newsletters, my wife is a runner so we had a booth at the 5K and 10K races.  I did the internet advertising for a Schools website that promised me leads.  What this added up to was more money, more money, more money.  This was dangerous since a HUGE chunk of the money from the few deals I had were going to marketing ideas that DIDN’T WORK and yielded nothing for me in terms of business.

So, what do I do now?  What do you really need?  What REALLY works?

Although there is  no cookie-cutter recipe to this business, I found that…

A)  You have to have a website.  Click here for an example.  Besides for the obvious features (your name, face, contact info), your website should have something people want or need.  They can get a mortgage calculator on a million different websites.  What does YOUR website have that others don’t?  Wht is unique about your site that will bring people back and make them regular visitors?  Make sure that they can search the MLS (search for homes).  But that is a given.  My website will have a link that will allow prospective buyers to view boundary maps of different schools to see WHERE they need to buy if they want their children to go to ABC Elementary.  City Information with restaurant locations / movie locations is also a good idea. 

B)  Notepads.  “Notepads?,” you say…yes notepads.  Why?  Well, they’re relatively inexpensive, (I think I pay $200 for 1000 shipped to my office).  They have shelf-life, meaning they last longer than the trip to the garbage can.  AND, people like em.  They use em.  My uncle saw a random stranger in a grocery store using my notepad to check off their grocery list.  Make sure you don’t get cute with your notepads and use some fancy design, sunset, beach scene, mountain scene, so they can’t see what they’re writing down.  Think simple for your design.  Name, contact info huge at the top, that’s all you need.

  The newsletters and postcards are still good, don’t get me wrong, but they just don’t yield much in the way of business.  Focus on getting your website up higher in Google / Yahoo! natural search results.  Talk to a very good web designer on how to do that with key words.  85% of people are using the Internet to find homes.  DON’T SKRIMP on your website…pay extra to make it eye-catching, unique, well-thought out.  People get an impression of your abilities and character from your website…it’s where they get to know you anonymously before they decide on actually calling someone.

I hope this helps…maybe even some of you experienced agents pulled something out of this you can use.  Good luck!!!

“Simple is as Simple Does” — Forrest Gump

With so many homes on the market and so few qualified buyers…

WHAT sells homes?

This is Fall, 2008…buyers are looking for a deal, and rightly so.  Depending on the areas/cities they’re looking in, they could have potentially hundreds of homes to choose from in their price range.  Also, they’re starting to ask the question, “How many days on the market?” clueing in to (and capitalizing on) the desperation of some sellers.  For example, homes in placentia and homes in yorba linda have an average days on market is over 90.  So, they’re after deals.

Deals are often REOs……

And if you don’t have an REO to sell, then WHAT will sell the home???

Simple is as simple does.

The answer is PRICE. 

The upgraded kitchen with granite, the walnut hardwood floors, the crown molding and 6″ baseboards don’t seem to be deciding factors as much as they did 3, 4 years ago.  Buyers want (no expect) those things today.  The bottom line is — HOW MUCH?

Frustratingly, sellers are (can you believe it?) STILL unrealistic about the value/worth of their home.  They STILL are comparing their homes to last year’s prices or active homes on the market around them (that AREN’T selling and may not EVER sell!!!).

So, what are our tools to use to convince our sellers of the reality that price and price alone is impeding the sale of their home? 

1. Comps…NOT active properties, but properties in escrow and sold properties in the last couple months.
2. Showing them homes that are out there like theirs (but be careful in your selection, this can backfire and the owner will say, “My home’s nicer than this! AND, I’m priced LOWER!”  Show them homes that are realistically priced or priced under market).
3. For Prudential agents, OSA (Online Seller Advantage) that shows how many “hits” they’re getting on their home out in cyberspace.  2,200 people have seen their home online?  Then 2,200 people agree with you that the home is overpriced because NOT ONE has put an offer on their home.

It’s not rocket science, it’s not complicated, homes that are priced to sell WILL SELL right now when agent and owner can get on the same page about where the home really should be in the market.

What’s Going on with Real Estate in Placentia, Yorba Linda, Brea & Orange County CA, March 2008

(The following was a response to a potential buyer who expressed his opinion that the market is going to come way down in the next 6 months to 1 year) 

 I think prices will continue to come down, but not to the extent that most of the public thinks.  Think about this — if the prices come down too much, 75% of all homes bought 2004 and later will be worth less than purchased.  This won’t happen.  We’re seeing the results of “pent-up demand” here at the Brea office…tons of buyers who have taken the “wait and see” stance for the last couple years are now starting to enter the market.  I’ve been tracking the number of homes going into escrow in a sample of cities (Anaheim Hills, Brea, Fullerton, Placentia, Orange, Yorba Linda) for the last 2 years.  Yesterday 16 homes went into escrow as backup or pending status.  March, 2008 is by far the best month we’ve seen since the downturn started around February of 2006.  The government’s 6th interest rate cut will eventuate in lower long-term lending rates.  Part of the Economic Stimulus Package was to raise conforming loan limits to $729,500 in Orange County.  The local economy is still bustling with strong employment in Orange County now that the subprime loan companies are buried and gone.  I’m seeing sellers holding out so that the average List Price to Sold Price ratio is 95%…$25,000 to $30,000 whereas 6 months ago the LP/SP was more like 92% (about $40,000).  When you say 20%, you’re talking $70K on a $350,000 purchase.  That’s not going to happen right now.  I sincerely and honestly think the market will drop only about 10% to 12% more…BUT, even if you get $25,000 to $30,000 off a property this spring or summer, the interest rate is creeping below 6%, which means you can get into an awesome payment with a 5 yr. interest only (all interest is an income write-off), or a 30year fixed (not that you need it) for under 6% w/ no points (this I heard through a colleague).

So, I’m sure your lender can find you a product that gives you a comfortable payment…if you bought today, you would have a fantastic interest rate.  You’d see your home go down in value some, but unless you’re trying to flip the property, you’ll stay in it long enough to see a marked appreciation in 3 to 5 years.  If you try to time the “bottom” of this downturn, you may see the best possible interest rate slip you by and that only the mortgage calculator knows if it’s worth it to wait.  1% difference in your borrower’s rate is a serious difference in your monthly payment.

Best Time to Buy??? March, 2008

The Feds just cut the prime rate today by .75%  The trend has been for the long term mortgage rates to rise when cuts like this come to slow down…a loan officer associate of mine just did a loan for a gentleman for 5.75% with NO points on a 30 year fixed. 

 Here are 3 Reasons it IS a good time to buy a home today:

 1)  Interest rates are creeping below 6% for a 30 year fixed.  A percentage point in difference on your loan interest rate can translate into hundreds of dollars difference on your monthly payment.  Locking into a phenomenal interest rate is critical for keeping your payments down.

2) Inventory is still high and…there are so many opportunities out there.  Not only are bank owned properties selling all over the place in Orange County, but even the regular sales can be had at a great price.  What is a great price?  Anything that is below today’s current market value.  (Consult a real estate professional for the most accurate current market value).  Banks and sellers are often willing to “wheel and deal” with concessions to buyers and aggressive price tags.

3)  The raised conforming loan limit.  In Orange County, the magic number is over $729,000 for a loan with the conforming rate.  That means, you can get a loan over $417,000 and under $730,000 which was once considered a jumbo loan (with a “jumbo” rate) for the lower conforming rate.  Lending requirements are much stricter these days, so anticipate putting down at least 10% on your new purchase.  (20% is obviously a much better idea since you avoid PMI).

Nic Petrossi, Prudential CA Realty in Brea

npetrossi@yahoo.com