The Website is designed to either work with the search parameters you enter or the GPS built in with most cell phones. For example if you are in the Seabright Neighborhood and want to know what is for sale, all you need to do is go to http://mbloch.e-agents.com/mobile in your browser and click on “Search by Current Location”. Then you have the option to enter the radius and price range, such as $500,000- $800,000 within a 1/2 mile radius. Then it will pull up all the listings within that radius from your current location without having to enter an address. You may have to enable the GPS on your phone. You may also manually enter in search parameters and retrieve listings that way.

This website is also a great tool for finding Open Houses. Again, just go to the website, and then click on Open House Search. From there you can either search by using your Current Location, or by entering in an address or area.

Many of my clients are currently subscribed to our Listing Alert Service. Once you have a search set up, you can also use the mobile site to log in your search from there as well. To subscribe to our Listing Alert service go to www.AtHomeInSantaCruz.com or contact me to set one up for you.

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If you have been watching interest rates, you have seen them drop to record lows once again. The last time they were this low, there was a lot of talk about all of the upward pressure on rates and that they may never be low at again. After all of the recent economic problems in Europe, investors started moving into US Treasuries, which pushes rates down. Rates on 30 year fixed loans have once again fallen below 5% with zero points. Adjustable Rate Mortgages have been quoted under 4%! This is cheap money. Once again, I hearing a lot of talk, that this won’t last for long. There has recently been more evidence of the improving economy. One of the positive signs has been that more consumers are paying bills on time. We all be watching to see what Fed Chair Ben Bernanke will be doing.

Like everyone, I will be happy to see improvement in our economy, but it is hard to give up these incredible rates!

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 Needs are going to be all of the characteristics of the home and neighborhood that are neccesities and are not negotiable.  For example, a home buyer with dogs, might have a fenced yard as a need.   A family with kids may have 3 bedrooms as minimum need.

Once you have listed all the features that are absolute necessities, then it is time to make your wish  list.  This is where you  have an opportunity to list all the features that would be nice to have but could live without if the home met all your needs and some other of your wants.  For example,  a buyer may have a  two car garage on their wish list, but could live with a one car garage or sufficient storage of some kind.  Many buyers in Santa Cruz  want to be walking distance to the beach, but it is not a need.  Once the wish list is complete, then you need to go back through the list and priorotize each item in order of importance.

Once the list is done, and you are pre-approved for a loan it is time to go house hunting.  I recommend looking at as many homes as possible that are in your price range and meet all of your basic needs.  Unless you have the time and money for major remodeling or additions, there is no need to see homes that do not meet your basic needs.  After looking at properties, you should review your Wants vs. Needs list and decide if any revisions are needed. 

If you would like help putting your list together, contact me and I will be happy to sit down with you and guide you through the process.

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This comes just as the federal credit for first time buyers phases out. There is no denying that the federal government’s credit stimulated the housing market. The local, state and national numbers all show a sharp spike in home sales since the time the credit became available. Many buyers state the credit as their primary reason for buying. Of course, one can no overlook rock bottom interest rates and housing prices as strong motivators as well.

For the first time buyers I was working with in Santa Cruz during this period, the credit was one of the motivating factors that influenced their decision to make their first purchase. However, if you took away the credit, most of them would have probably purchased anyways. It did effect their decisions on which property to purchase. For example, one of my clients found a foreclosed home in Live Oak that was perfect for her, but needed a new roof. Knowing that she had the tax credit coming made her feel more comfortable about moving forward with the purchase. I ended up negotiating for the seller to credit the buyer $9000 toward a new roof, but what the seller didn’t know is that she would have probably bought it anyways knowing she had $8000 coming from uncle Sam.

Another first time buyer in Santa Cruz, bought a condo. Many first time buyers have to sacrifice vacations while they get used to their new payments. This particular buyer was able to buy the condo, do some improvements and still was able to afford to take a surf trip to Mexico.

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The remaining 3 % (80+17+3=100) is the down payment. This means that 3% of the purchase price must come from the buyers for the down payment. In addition to the down payment there were about $10,000 in closing costs for title, escrow, and lender fees plus prepaid taxes, hazard insurance and mortgage interest. We were all thrilled when the seller agreed to pay the closing costs so really the only out of pocket expense was the 3% down payment. This one happened to be a short sale, so it was the seller’s lender, Chase, who actually approved the $10,000 credit for the buyer’s closing costs.They will also be getting $8500 back from the IRS for the first time credit, so really their true cost was about $2000!

This was not a subprime loan. This was not a variable rate mortgage. This is a fixed rate mortgage on very nice, ten year old, 3 bedroom 2.5 bath home with a nice yard and a 2 car garage for $2000! (out of pocket)

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Buyers and Sellers Benefit from REALTOR^® Expertise in Distressed Sales

Michael Bloch has earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS^® offers the SFR certification to REALTORS^® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. For many real estate professionals, short sales and foreclosures are the new “traditional” transaction. REALTORS^® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

 ”As leading advocates for home ownership, REALTORS^® believe that any family that loses its home to foreclosure is one family too many, but unfortunately, there are situations in which people just cannot afford to keep their homes, and a foreclosure or a short sale results,” said 2009 NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Foreclosures and short sales can offer opportunities for home buyers and benefit the larger community, as well, but it’s extremely important to have the help of a real estate professional like a REALTOR^® who has earned the SFR certification for these kinds of purchases.”

 As you may be aware, Michael is also  a Certified Distressed Property Expert. (CDPE).

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I have witnessed it several times when helping sellers with a short sale on their home. They usually start out overwhelmed. We start by putting all the cards on the table and looking at the reality of their particular situation. We then lay out all of the different options they can take. For many, attempting a short sale ends up being the best option they have. Then at some point, something clicks. You can hear it in their voice and see it their face. They have made the decision to move forward with the short sale. Immediately, the conversation turns from the “would haves” and “could haves” to planning for what will happen next. Doom and gloom seem to be replaced by hope with even a little bit of excitement. There is the obvious relief from taking a big step toward getting the proverbial “monkey off their back”. There are also a variety of other qualify of life improvements to follow.

One example is a single mom who was paying over $3000 a month to pay for the mortgage on her 2 bedroom, Captiola  condo. When her regular teacher pay was not enough, she worked the after school program as well as summer school. This left her all too little time to spend with her son and do many of the things they enjoy to do together. She loves to travel, and that was out of the question. She scratched and clawed to stay current on her mortgage and even applied for a loan modification (which was denied). Finally, when she started using her credit card to pay property taxes she knew that something had to change. This was not sustainable. We went over all of her options and then one day it all clicked. She made the decision to do a short sale and never looked back. She starting saving for a deposit on a rental and even planned a well deserved vacation. When it was all said and done, she moved from her two bedroom condo to a two bedroom apartment. My guess is that her housing cost dropped about $2000 per month. She is still in the same neighborhood, and even a little closer to the beach. Her son was able to stay in the same school and best of all they now have the time and resources to do a lot more fun stuff together. I would say her quality of life has improved. Yes, she did lose the down payment she had put on her condo. Yes, she will probably have a couple of missed payments in her credit report. In my opinion, these loses were greatly outweighed by the quality of life gained.

Michael Bloch, Realtor, GRI, CDPE

Lifestyles Real Estate

Office 831.420.2100

Cell 831.588.1588

E-Fax 831.854.0600

www.AtHomeInSantaCruz.com

www.ShortSalesInSantaCruz.com

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What is also very exciting to actually have a direct contact with a Short Sale Manager at Wachovia. (Wachovia took over World Savings and Golden West so this applies to those loans as well) We have all been transferred through the never ending maze of a customer service phone tree, only to become increasingly disgruntled. Multiply that frustration tenfold when dealing with a large bank like B of A on a short sale. I know have the name, phone number, email, and physical address of an actual person that can make actual decisions on short sales!

Unlike most lenders, Wachovia is not requiring extensive documentation from the property owner to do a short sale. They only require a hard ship letter from the seller and a phone interview. If it is for a loan modification they will also want to see proof that the owner has the ability to pay. This is smart as many other modifications end up in back in default because they can’t afford their modified terms.

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Some of the possible options may include:

• Loan Modification
• Refinancing Home Loan
• Deed in Lieu of Foreclosure
• Short Sale

The stats show that 7 out of 10 homeowners, who go through foreclosure, never contacted their lender. There is help out there. If you know anyone who is experiencing difficulties in making their mortgage payments please refer them to my website for information and let me know so I can contact them, and offer my assistance.

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1. CALSTRS- This is a program which works with the California State Teacher Retirement System (CALSTRS) to provide fixed rate loans with 3% down. The buyer gets two loans. One for 80% of the value of the home, and another for 17% of the value of the home. Both of the loans are fixed rates for the life of the loan. In addition, the second loan of 17% has no payments due for the first 5 years of the loan. Many refer to this as a “silent second”. This gives buyers 5 years to get used making mortgage payments while getting ready for a higher payment in five years. The increased payment is defined from day one, so there are no surprises. The interest rate is fixed at today’s competitive and historically low rates.

    

2. FHA- These are government insured loans through the Federal Housing Administration. You do not need to be a teacher or first time buyer to qualify. The main advantages are the low down payment (3.5%) and looser credit restrictions. However, they do collect quite a bit of prepaid interest, insurance, taxes and there is often a high onetime fee, which all makes closing costs high relative to the size of the loan. There is also mortgage insurance required for these loans, which adds to the monthly expense. I will often negotiate the deal so that the seller is paying the majority of the closings costs since many buyers need their savings for the down payment as well as reserves funds and extra money for any repairs or improvements that the property needs.

    

3. CALHFA- The California Housing Finance Agency is also offering the CAL-30 loan. This loan only requires 5% down, and is also a 30 year amortized, fixed loan. I recently received a bulletin saying that through monies from the Federal Government and approval from Governor Schwarzenegger there should be funds available for first time buyers. I had stopped recommending this program awhile ago because they had run out of funds to loan money. It appears that they will be funded again, and I am having a local lender look into the pros and cons of the loan with today’s underwriting standards.

   If you have any questions or know anyone interested in more information on fixed rate loans with low down payments, please let me know.

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