One of the oldest inspections performed on homes for sale is the termite inspection or pest control inspection. Many sellers agree to pay for this. It is not required by lenders. However, if there is any mention of a termite inspection on the contract, the lender wants to see it and wants any issues cleared before lending money on the property. Therin lies a problem that can kill the transaction.

In California there are 2 types of pest control problems: Section 1 which is evident infestation and Section 2 which are conditions likely to lead to infestation or infection. In other words Section 2 is preventative maintenance. The seller may agree to fix Section 1 items but not Section 2 which according to the contract may be paid for by the buyer if requested by buyer. But the current trend is that the the lender won’t lend — unless someone pays for any Section 2 repairs. If the seller won’t pay or can’t pay the buyer is asked to do preventative maintenace on a home he doesn’t own or cancel the transaction.

Or the buyer can just pay for the inspection himself, outside of escrow, as he does with a home inspection. This would be for informational purposes only. It would be foolish to then share the information with a lender who would force someone into paying for any Section 2 items, even when there is no active infestation currently. Professional Realtors® are familiar with this dilemma.

The prospective renter said, ” We saw it advertised on Craigslist for rent. It even had the pictures in the ad. We drove out to see it before sending them the deposit money. Your name was on the sign, so we called.”

My Realtor® friend searched on Craiglist and sure enough found a rental ad for her listing. It had the same pictures she took for the listing — probably from her ad. This type of fraud is very common and not just in the Antelope Valley. Individuals take information from homes for sale on Craigslist and place their rental ad using this information. They ask for renters to send them a deposit check for more information and keys. NEVER DO THIS! You’ll never hear back.

What can you do to avoid this type of fraud?

Rent from a property management company or a Realtor® and check out their office and business. If you meet someone on the property, get some verifiable ID from the person you speak with. Do not give them money if you can’t verify who they are.

You can also go to the local county recorder office to see who is on title for the property. Some Realtors can give you this information as a courtesy service. Legitimate landlords shouldn’t mind you checking them out. After all, they can’t rent you anything if you’ve already given all your deposit money to a fraudster first.

Finding the right home can take a long time; sometimes much longer than the escrow or closing process. Nowadays, to minimize the time, you first find out from your lender how much home you can buy. Don’t waste time looking at homes out of your price range. But let’s say you are doing things the correct way. You have been pre-qualified by a lender. You’ve been diligently shopping with your Realtor® in your price range. Everything looks good. You make an offer. What can you expect? It depends.

I usually tell people, ” Plan on closing no sooner than 60 days from the offer date, if your offer is accepted.” This is UNLESS IT IS A SHORT SALE. Allow a week or so to negotiate the offer and any counteroffers. If you’re getting an FHA or VA loan, typically we used to allow for a 45 day escrow. With recent appraisal issues and changed requirements in the last year, I suggest ask for 48 to 50 days, if the seller will agree to this. There might even be some lender required repairs needed.

A conventional loan used to be written up for closing 30 days after acceptance, but many needed extensions and it wasn’t always the buyers fault. In my opinion they should now be at least 35 days if seller will agree. So, in this case, our original 60 days would become 42 from the offer date. If you make an all cash offer and no lender is needed, it’s possible to make the offer, negotiate its acceptance, and close all within 30 days.

So, the way the buyer finances the purchase, will determine the time needed. And with some transactions, things go very smoothly and these estimated time frames are beaten considerably and you’ll get the keys sooner. All markets are different; this is typical in the Antelope Valley. But if a short sale is involved — all bets are off.

First, new construction is not mentioned, so we’re left to assume that this chart represents just resale homes.  Also, their numbers currently being  so few, we don’t know if  HUD homes are included in REOs or not.

Next, there is a group of homes that I call investor  homes.  Corporations buy them, sometimes at a trustee sale, fix them up, and ” flip ” them to a buyer for a profit. The chart doesn’t indicate whether they are included in the REO or traditional sale section;  it could be interpreted either way.  Our local Multiple Listing Service has no simple way of labeling these either.

Finally, we see short sales at 14%.  My personal statistical checks have them at 17% to 19% month after month. It appears that I’m giving  more credit for short sales than the chart.  But the other side of the picture is that currently about 35% of the active listings are short sales.  A similar percentage each month get accepted offers from the short sale sellers. But it’s a disgrace that at the end of the month only 17% of the closed sales are short sales.

Despite the noted shortcomings, this chart is reasonable way to size the current real estate market in the Antelope Valley.  If there is a way to breakdown these numbers any further, I will do so in a future post.

Many times homeowners who are facing foreclosure do not know that they have choices. In order to help these homeownres make the right decisions Fannie Mae has come up with a new interactive video called WaysHome™. This video is designed to educate and encourage homeowners facing foreclosure to understand their options before taking any actions.

As I watched, I played the part of a homeowner who is struggling to make payments and avoid foreclosure. There are several real-life situations covered. The video stopped at a decision point where there were several choices to choose from. After making my choice the video continued and then explained the positive outcome or negative consequenses of the choice I had made. I continued for about 15 minutes to the end with a very positive solution to the situation. I believe the video is much easier to understand for homeowners than just reading about their options or having them explained to them by someone who hasn’t experienced a similar situation. I would also hope that some at-risk homeowners might find solace in following the characters in the video who are living a similar plight as their own.

The only possible concern I could find with the video was when the main characters had a meeting with a HUD counselor. Nobody should ever, and I’ll repeat ever, go through foreclosure without speaking with a HUD approved counselor. They’re the best and it costs nothing. However, I have been told that, because of so many cases now-a-days, it may be difficult to get a quick appointment, depending on where one lives. But the same people report to me that it is very easy to speak with a HUD approved counselor by phone. If anyone has any personal experiences with this, please comment.

I only had time to explore one path as interactive videos can have several endings, but what I saw was very encouraging to recommend to distressed homeowners. I can’t wait to watch again and take a different scenerio. You can see the video at www.KnowYourOptions.com/ways-home

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However, recent reports to the city council indicate that identity thieves use dumpster diving as a means to look for personal information such as credit card offers and billing statements for committing identity theft. Also, there is a potential health risk involved when the scavengers remove items such as clothing and furniture and resell them to unsuspecting buyers who can be contaminated by these items. Other times the scavengers leave a mess that is compounded by the Antelope Valley winds. Some residents are even fearful for their safety if they confront the scavengers.

But enforcement of such an ordinance is another thing.  From my own experience of witnessing these folks, being illegal in Palmdale hasn’t stopped scavenging trash containers at all. Sheriff deputies may enforce this law  if they just happen to notice scavenging going on. But if a resident calls the sheriff department, deputies won’t arrive in time to do anything. And the city’s code enforcement officers aren’t even working the hours that a lot of this is going on. A citizen’s arrest is possible but could be dangerous. Collecting fines from people who have no money can be tricky also. Even if Lancaster’s ordinance passes, will it mean anything?

I’ve added condos into the mix this time, which I don’t believe will change numbers much. However, I only count listings in the Antelope Valley — not homes listed on the local Multiple Listing Service that are out of the area. Again we have to take into account homes that are not tagged correctly as a short sale when an agent lists the home. The MLS always uses the following disclaimer: All information deemed reliable, but not guaranteed. All information herein has not been verified and is not guaranteed.

Here are the disclaimed figures from the middle of January 2011. I noted 1785 Active listings of which 670 were tagged as short sales. That’s about 37.5 per cent of the market. There are 970 homes with accepted offers and currently Pending in escrow waiting to close. They are made up of a variety of sales types including traditional, foreclosures, investor flips, HUD homes, and of course, short sales. The ones tagged short sales number 335 or roughly 34.5 per cent of what’s in escrow. That’s comparable to the short sales making up 37.5 per cent of market at the beginning of this paragraph.

However, we now have an additional category that came into play last year which hovers between Active and Pending — Contingency Short Sale. Many times the buyer and seller choose to not open escrow until the short sale lender approves the sale. So the home is put into this limbo classification to let everyone know that the seller has accepted an offer from a buyer and everyone is waiting for the lender’s approval before going into escrow. They number 280. If we add them to the 335 pending short sales we get 615 waiting to close sometime in the future. These transactions won’t all end happily.

In December 2010 there were 506 sales of which 91 were short sales, only 18 per cent of the sales. In 2010 there were 6419 homes sold in the MLS and 1107 were short sales or 17.2 per cent of the sales. The short sale market was pretty much on this pace throughout 2010. This was twice as good as 2009, but not good enough. Our percentages need to closely match what is listed. We’re all working on improving this –well most of us.

However, it now appears that HAFA is not working as promised. Yet, over a hundred loan servicers are part of the program. Is it their fault? Are they moving along by their own rules instead of those required of HAFA? Maybe — maybe not .

To be fair we need to remember that many loans are owned by investors, even though the loans are serviced by big banks that have signed up to participate in the program. The investor may have constraints that result in non-qualification for HAFA even though the servicer has signed up to participate in the program. The program has benefits to the investor to comply with HAFA, but some may not see it that way. Freddie Mac is the compliance agent for HAFA and Freddie Mac has the ability to audit servicers on compliance with HAFA rules. But It may be futile to ask servicers to comply if their investor refuses.

In response to the ongoing challenges REALTORS® face in working with short sale transactions and HAFA, the California Association of Realtors (C.A.R.) recently sent letters to officials at the U.S. Dept. of the Treasury, Federal Housing Finance Agency, Fannie Mae, and Freddie Mac requesting immediate changes to the HAFA program and recommending solutions so the program can succeed. You can read the letter here.

It will all be gone tomorrow. It rarely lasts very long when it snows here — just long enough to remind us that the Antelope Valley can show all four seasons.  And of course, when I help people move here, I disclose this fact to them. It’s required.

Back Yard Bistro

Even though the market slows down during the holiday season, the people shopping for a home in December are the best buyers. They’re people who are very serious about purchasing a home. They need to find a place. If they weren’t serious they wouldn’t be out looking for a home. They would be out holiday shopping like the not-so-serious lookie-loos! That’s what real estate agents call people who look at homes but have no intention of purchasing one.

More than likely, there won’t be too many showings to bother you, which is one of the main reasons home sellers want to wait until the new year to list. But any showings you do have will be with serious buyers. So, why pass this opportunity up when the best buyers are out looking?