There is a House bill, Neighborhood Preservation Act, passed before the summer recess which is a response to two important questions: 1.”When homeowners lose their houses to foreclosure, should they be able to stay in the property, leasing it back at fair market rent from the lender?” 2. “Should they also get an option to purchase the house from the bank at the end of the lease term, assuming they have the income to afford it?” 

The Neighborhood Preservation Act “would remove legal impediments blocking federally regulated banks from entering into long-term leases – up to five years- with the former owners of foreclosed homes. It would also allow banks to negotiate option-to-purchase agreements permitting former owners to buy back their houses”

If the bill is approved by the Senate, it would encourage banks to consider if it’s better to foreclose and take a loss now or to lease the property and then sell when values increase in a few years. There is a debate about who should own the home and control the lease agreement.

A San Diego realty broker, Al Hackman, and his partner, Tony Huerta, “contend that lease-backs with options to buy are the way to go – but not if banks run the show.”  They have a program called “the seamless short sale” where the homeowner can stay in the home before and after the settlement. The bank first sells to an investor who agrees “to lease back the house on a “triple net” basis - where the tenants pay taxes, insurance and utilities – for two to three years.”

The property value for the buy-back is pre-set to be more than what the bank sold to the investor and less “than the original price by the foreclosed owners.” For the investor according to Hackman “the internal rate of return . . . can depend on the rents and the buy back price but typically is in the 8% to 10% range. It’s a win-win. . . The owners stay in their houses. Private investors get a moderate return on what should be a safe investment and the banks are out of the equation.”

It is time to think outside of the box to solve the housing crisis of our time. The homeowner facing foreclosure should not have to bear the full burden of a lending experiment gone amok. For those homeowners who can afford the market rent rate, the seamless short sale is one solution.  Banks can slowly clear their books of toxic assets, investors can safely benefit and neighborhoods can remain intact while the country rights itself economically. 

Equity sellers who have maintained and up-graded their home may benefit from this buying frenzy, if they are willing to price their home competitively. Special marketing is essential with strong internet presence and the creative techniques of the “New Rules” of real estate. I know how to utilize the “New Rules” and I can provide you with the internet presence that will get your home widely seen. Learn how you can benefit from this specialized knowledge.

If you are having difficulty making your current mortgage payments, contact your lender before you fall behind in your payments. Ask if you qualify for a loan modification from your lender. If you do not, then you have options. Call me to find out about your options. I can help you steer a path in this sea of confusion and shine some light in the right direction. I can be reached at 714-932-5529.   

The question is “Will it last?” Foretelling the future is always risky. So many factors influence the market. The level of unemployment, the availability of credit and the ever-nebulous consumer confidence impact sales to varying degrees. On a larger scale is the balance (or imbalance) of supply vs demand which can tip the scales toward a buyer’s or a seller’s market, driving values up and down.

Right now the inventory of homes on the market is dwindling, shifting the balance toward sellers.  When more properties are brought “on market”, the balance will shift toward buyers unless the homes are mostly distressed properties. A bank-owned or short sale listing will almost always be in high demand and generate multiple offers which drives the price up. Therefore, a large inventory of distressed sales represent a seller’s market.

The public’s perception is that home sales are mostly in the “distressed” end of the residential market. Advertised “Home Auctions” and “bank-owned” properties plus media stories of displaced families due to foreclosure dominate the realty news.  In some communities this is true, where 90% of recent sales are distressed properties.  In other communities the closed sales are dominated by “equity” sales from sellers who are not in foreclosure.  All real estate is local and it pays to know your market.

A first-time buyer and a home seller would be best served by aligning themselves with a professional who knows that local market.  Both parties will benefit from the knowledge of a local expert who actively works in the marketplace daily.  A local Realtor will know the accurate value range of a home and facilitate the disclosure of the home’s condition and the title clearance that is critical in any transaction. A knowledgeable third party can negotiate in an unemotional way to create a win-win for both sides that will appraise and close escrow! An internet entity facilitating a home sale when the on-line contact has no local knowledge, leaves one or both sides open to liability. Buyer and seller beware.

Therefore, take the guess work out of your real estate transaction. Work with an experienced realtor!

As stated on the OC Assessor’s website, www.ocgov.com/assessor/, the Assessor will review the value of every property in the County between January 1 and June 2009, and will implement a temporary value reduction for all eligible properties. There is no charge for this service.

There is a question/answer feature on their home page that will explain the assessor’s process in determining property values and how you can appeal that decision. You can request an informal review if you believe that your Market Value is lower than your Taxable Value.

You can download the Request for Informal Assessment Review form from the website at  www.ocgov.com/assessor/.  Completed forms must be returned to the Assessor by April 30, 2009. You will need to provide up to three (3) sales or listings in your area that occur on or before March 31, 2009 to support your claim for a lower valuation. (Foreclosures may not be an indicator of market value.)  However, if your neighborhood has a preponderance of foreclosed and bank owned sales, then your market value may well be dictated by those recent sales.

If you need assistance with obtaining the form or the necessary recent sales information, contact me at 714-932-5529 or email me at pat@patmonahan.com. Remember the deadline to file the review is April 30, 2009.

Admission is FREE!

As seen in the LA Times Custom Publishing insert on 4/16, the Home Buyer’s Fair will educate home buyers about assistance programs, opportunities for first-time home buyers and how to successfully navigate today’s real estate market.  The free event will feature more than 50 “how to” sessions about the home-buying process as well as 70 exhibit booths offering information and guidance to home buyers. Several sessions will also be offered in Spanish.

You will find seminars on monitoring your credit score, finding and applying for a mortgage loan, assistance programs for first-time home buyers and how to choose and successfully work with a REALTOR.  Popular sessions such as “How to Find and Buy Foreclosures, Short Sales and REO’s” will be repeated so you can make the most of your visit.

Free movie tickets will be distributed by C.A.R. for the first 200 attendees each day, immediately following the welcome and opening remarks. One ticket per person.

For information about the event visit www.homebuyersfair.com

What affects the value of property over time that causes it to cycle and change?  As with any commodity it’s the demand for it.  Eventually, the value of property will stabilize and cycle up again.  First the bottom must be established (the price where a property will sell immediately for full value).  Then the buyer demand for that price will deplete the inventory and drive the price up again.  Central to that happening is the availability of cash and credit (mortgage loans).

The agencies controlling credit and cash flow are working to thaw the system which is currently seized-up.  There are signs of that happening as more buyers are entering the market, inventories are shrinking slightly, interest rates are at historical lows and government backed loans (FHA) are growing steadily.

When you are ready to buy or sell real estate, think of me.  Instead of worrying about all the questions that “helpful” people will bring to your attention, just call my office, get the straight scoop and ease your concerns. I look forward to hearing from you.

If you are thinking of buying a “hot property” soon, get pre-approved for a low-rate loan with a direct lender and contact me for the leads to the best deals on the market.  I have information on where to find the direct lenders if you’d like some guidance.

Most of the bank-owned houses highlighted in my home page have sold or are in escrow, and more houses are coming on market every week.  From January to March 2009 there will be many more bank-owned properties available for the prepared, qualified buyer.  Contact me at 714-932-5529 to get started. The time to act is NOW.