RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for November 2011, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 224,394 U.S. properties in November, a 3 percent decrease from the previous month and a 14 percent decrease from November 2010. The report also shows one in every 579 U.S. housing units with a foreclosure filing during the month.

“Despite a seasonal slowdown similar to what we’ve seen in each of the past four years, November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year,” said James Saccacio, co-founder of RealtyTrac. “Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona and Massachusetts actually posted year-over-year increases in foreclosure activity in November.

“Scheduled foreclosure auctions reached a nine-month high in November, corresponding to a recent surge in default notices that began back in August,” Saccacio continued. “Many of the new defaults that started the foreclosure process over the past few months are now being scheduled for public foreclosure auction.”

I have already seen my own inventory grow as a result of the increase in foreclosure actions. What does this mean?

It depends on whether you are a buyer, seller or investor. As a seller, we need to ACT NOW and not wait for the seasonal increase in listings that occurs in the 2nd quarter of each year. AS  buyer, increased inventory means more buying opportunities. As an investor, distressed properties offer opportunities to flip, hold and rent or buy a house for family members.

Call me for a discussion on any of the opportunities that we have in front of us or advice on  your own personal real estate decisions.

You can always reach me at 510 881 1761 or email me at reo@deansouza.com

Bye for now and Merry Christmas!

Warmly,

Dean Souza

Focused on the Success of Your Move

Honesty Between Seller and Agent-The Best Recipe for Success

The relationship between a seller and Realtor is one of the most critical factors affecting the successful sale of home. It’s second only to the marketing effort of the real estate agent.

A Realtor must tell the seller the truth about the local market and the likely sale price of the home. A seller must be willing to accept this information and the recent sales data that supports the opinion of value.

When either is not honest with each other, whether it be the agent telling the potential seller what he/she thinks they want to hear, or, the seller not accepting the market data, then frustration, missed opportunities is the likely result.

Honesty is a two way street and is the natural result of a trusting relationship. Picking an agent you can trust is an important key to realizing the success of your move.

For more information on my approach and philosophy to selling and buying homes, feel free to call me about any of your real estate needs at 510 881 1761 or email me at reo@deansouza.com

Warmly,

Dean Souza

Focused on the Success of Your Move

Taxes on Short Sale vs. Foreclosure

The key legislation that protects most homeowners from the IRS & California Franchise Tax Board tax consequences sunsets in 2012.  That’s only 405 days away!  OK, stop laughing.  405 is not a lot when you consider that “U.S. homeowners in the foreclosure process were an average of 507 days late on payments at the end of last year”*.  The only thing worse than losing your home, is losing your home and then getting taxed on the shortage as a gain.  In California, a $100K gain (a.k.a. the shortage on your loan) could create a $34K tax bill.

If you are hopelessly underwater, it may be better to consider your options now vs. later.  2012 is just around the corner.

For answers to your questions about this article or other real estate questions, you can contact me at reo@deansouza.com or call me direct at 510 -888-3322.

Bye for now!

Dean Souza

Cheaper To Rent Or Buy?

Home prices have taken such a beating and demand for rental units has increased so much that it’s now cheaper to buy a two-bedroom home than to rent one in most major U.S. cities.

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country’s 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.

In addition to a continuing decline in home prices, rock-bottom interest rates have added a lot of weight to the buy side of the scale. The overnight average rate for a 30-year fixed was just 4.19% on Monday, according to Bankrate.com. A 15-year fixed averaged just 3.43%.

Add in the tax perks of home ownership and for those who can afford it (and who can actually qualify for a loan), it certainly is a buyer’s market.

“It’s a personal decision, of course. But if you have a steady job and you are planning to stay for seven years or more and have enough cash to put 20% down and enough left over for seven or eight months of expenses, you’re better off buying in most places,” said Daisy Kong, a spokeswoman for Trulia.

Should you rent or buy?

The buy-rent calculation is just one part of the decision-making process. Other factors include:

• How long you plan to stay. If you’re not keeping the home for several years, transactional costs of buying and selling (e.g; commissions, closing costs) can wipe out any buying edge.
• Whether you have cash for closing. Banks offer a variety of loan programs with varying down payment requirements. Call me for referrals to top lenders and mortgage brokers in our area ton find out what your particular requirements will be.
• Whether you can cover all the homeownership costs. It’s not just the mortgage: There are property taxes, insurance, heat, utilities and regular maintenance.
• Whether you can claim the tax advantages of homeownership. Mortgage interest is deductible and can shave a lot off tax bills but this benefit accrues mostly to high income earners with substantial mortgage payments. Many borrowers claim the standard deduction on their taxes and so derive no savings from the deduction.

For guidance and direction for your self or someone in your family, give me a call and I will take personal responsibility for making sure you get all of the information you will need to make an informed decision for you and your family.

Bye for now,

Dean Souza

510-888-3322

reo@deansouza.com / dsouza@deansouza.com

Focused on the Success of Your Move

 

Top 10 reasons to sell your home right now….no matter how absolutely, painfully, awful the price you may have to deal with!

1. The market is not getting better it hasn’t even stopped getting worse!

2. If the market averaged 3% a year for the last 30 years and your home value is down 40%…how long will it take to get back to its highest value?

3. All Homeowners had a winning lottery ticket from 2001-2005…some people cashed theirs in…the rest of us have a ticket that is expired!

4. If you are buying up the home you want to buy has come down more than the one you are selling.

5. The Government is helping to fix the situation…do I really need to elaborate?

6. If they take away the mortgage interest deduction…many people will decide they may as well just rent.

7. With so many investors buying and holding property rents most likely won’t rise much and when prices do get up more homes may flood the market.

8. There is nothing happening in the economy to indicate that things are getting any better, now or in the near future.

9. Any decision you make now is at least a 10 year decision…live in it for 10 years, rent it for 10 years, sit over priced for 10 years…or price it at the ridiculously painful real price of today and move on with your life.

10. The economy won’t get moving without a Real Estate Recovery, jump in and be part of the solution!

Home Prices Decline in May. Boom or Bust?

Home Prices were reported to have decreased in May of 2011 again.

What does this mean for the consumer? It depends on whether you are a buyer, investor or seller and what vantage point you are looking from.

Buyers and investors will be hard pressed to ever find cheaper money to borrow. Prices may or may not be at the lowest level, however, if you are buying to live in your home, the debt service (mortgage payment and taxes are very reasonable.

If you are an investor, you have the ability to leverage yourself with your available reserves to make multiple purchases. Flip properties are few, but still out there. Holding for cash flow is starting to make more sense in the single family, some condos and 2-4 multi unit properties. The availability of consumer friendly non owner financing is remarkable, despite what you may hear otherwise from other media sources.

If you are a seller, you can rest assured that I stay current to the day on your neighborhood and community market statistics and neighborhood trends. By having the latest information, I can help you set the right price for your home to maximize profit or springboard you into your next home, wherever that may be.

Keep a close watch on future communications from me as I will be collaborating on a series of webinars with the Vice President of 1st California Mortgage, Steve Majerus. In the series we will be covering methods of leveraging your available cash investment, purchasing rental or flip properties, market trends, just to name a few of the topics.

We will also be piggybacking our webinars with Distressed Property Tours on Saturday mornings.

Hope everyone is doing well and have a great remainder of the summer.

 

Warmly,

 

Dean Souza

Broker/Owner Better Homes Realty Danville/Castro Valley

510 888 3322

www.deansouza.com

Focused on the Success of Your Move

National Association of Realtors Reports Decline of Existing Home Sales in April

NAR reported that sales if existing home sales declined in April. NAR concluded that the home market is struggling to gain traction as the economy expands as the decline of existing home purchases fell .8%.  NAR also stated that with unemployment at 9% and wages stagnant, any sustained recovery in residential real estate may take years to unfold.

Interestingly, cash purchases accounted for 31% of all transactions and distressed (short sale and REO) accounted for 37% of transactions. Nationally, housing supply is at 8.3 months of inventory, meaning that if no homes were listed for sale, it would take 8.3 months for the inventory to be absorbed by the existing buyer pool.

Some of the statistics confirm what I am experiencing in the Bay Area Market. Since November, I have tracked a decline of approximately 4.7% in home values and an increase in existing inventory from 3 months supply in November to a 5 month supply now. In my career, I have used a 6 month supply of homes as the benchmark for ‘equilibrium‘, that is, a balanced market between buyers and sellers.

Distressed properties generally make up a larger part of the active inventory than the national average. Locally, that figure can range from a low of 40% to the 65%-70% range, depending on the location and the sample size of the neighborhood or area.

These are all statistics that I use when consulting with sellers who are  making decisions on whether to sell, how to price for the existing buyer audience or making other real estate decisions. Knowing these facts about the market helps take the emotion out of the decision-making process and gives a more realistic and fact based decision on the important elements of pricing and positioning for the market.

For a more detailed look into these statistics and how they affect your future or pending real estate decisions, or for helpful tools to locate a home to purchase or get a value on your home, you can go to my website at www.deansouza.com or you can call me at 510 881 1761 or reach me be email at dsouza@deansouza.com .

Bye for now,

Dean

Absorption Rate: Easy as 1-2-3!

The absorption rate, or, the length of time it would take to sell the existing active inventory of homes currently listed for sale in a given area, is a valuable tool for sellers and agents, that can help assess the proper price range for a given property.
It can also help manage expectations.
Local MLS data provides all the information that agents need to calculate the absorption rate using a very basic approach. Other sites that give the same information is Realty Trac and other subscribed websites.
Here’s the formula:
1- take the number of homes that are now listed on the market (active listings) in a given area.
2- Take the number of homes that sold in the previous 30 days, and divide the inventory by that number.
3- The resulting figure is the absorption rate in months.
For example: if 50 homes sold in the last 30 days and there are 600 homes now listed for sale, the absorption rate is 12 months.
By tracking the absorption rate over time, an agent and seller can get a better perspective on the market and be better equipped to make better decisions about pricing and expectations.
For more information on absorption rates or other useful tools I use to give my clients strategic advice and guidance to selling their home, feel free to call me at 510 881 1761 or email me at dsouza@deansouza.com .
Focused on the Success of Your Move…
Bye for now,
Dean Souza
Keller Williams-Castro Valley
Ca Lic#: 00967442

WHAT’S THE ‘BUZZ’ FOR 2011?

Heading into the New Year, the buzz in my network revolves around REO inventory that has built up as banks have observed their self-imposed ’Holiday Moratorium’ and holding off on evictions and other foreclosure activity for about 2-3  months.

Hedge Funds are entering the market by purchasing large amounts of inventories and look to be a player in the 2011 market. HUD will be releasing large amounts of inventory this year and are promoting participation from the real estate community by paying full commissions on their properties.

As bank inventories reach capacity, more ‘Outsourcing’ companies will become major players in the distribution of  listings to top performing real estate agents who maintain high performance standards.

What does this mean for the consumer? I am cautiously optimistic that there will be opportunities for acquiring rental properties, some ‘flipping’ opportunities as well as reasonable prices for acquisition for an owner occupied property.

I also see more ‘traditional’ sales as sellers look to cash out and head to retirement or become move up purchasers, taking advantage of the drop of value in higher price ranges..  Some of the constants that exist in every market are ‘Probate Sales’, divorce and career change/ job transfer.

Since Probate Real Estate is one of my niches, I receive many inquiries from consumers who want to seek advice on selling Probate Real Estate, and how to simplify the process as well as cut down the cost of selling a Probate Property.

Due to the quantity of homes that I sell on an annual basis, I am often asked to give valuation opinions and give advice on when and how to sell for top dollar, negotiate a short sale and can offer an opinion that is based on working knowledge as opposed to theory.

Regardless of whether you are interested in capitalizing on the market for an investment or selling /buying a home for traditional reasons, I can offer highly insightful information to help you make a wise decision that is right for you.

You can contact me anytime at 510 881 1761, 510 888 3322, email at dsouza@deansouza.com or visit my website at www.deansouza.com .

Happy New Year and bye for now!

Warmly,

Dean Souza

FIVE KEYS TO BUYING BANK OWNED PROPERTIES

Here’s what you need to know as a potential buyer of REO property in today’s market.

1) How to find REOs

Real estate agents can pull up REO offerings for you. Most mortgage lenders want their REO properties listed on the multiple listing service (MLS) so that any real estate agent can show them to potential buyers. Many banks also have websites specifically dedicated to their REO listings (go to a bank’s website and look for links).

Here are a few major listings to get your browsing started:

• Fannie Mae REO: http://www.homepath.com
• Bank of America REO: http://bankofamerica.reo.com/search/propertysearch.aspx
• www.deansouza.com
• Countrywide REO: http://bankofamerica.reo.com

2) Get your own appraisal

Discounts on REOs vary greatly, depending on whether the homes are severely damaged and where they’re located in the country. Although damaged REOs might sell for a relatively minor discount — 5 percent to 7 percent off comparable private sales of non-damaged homes — some might offer as much as a 30 percent discount.

But being listed as an REO doesn’t mean that a property will automatically be a bargain. Banks are in business to make money, so of course they’re going to price homes as competitively as possible. This is why it’s important to always ask for an appraisal on the home you plan to purchase. But keep in mind that an appraisal is going to cost you a few hundred dollars.

3) Get it inspected

REOs are sold “as-is,” and that’s why you need a home inspection before committing to a purchase. A thorough inspection is even more important for an REO than for a standard property.

REOs tend to be sitting for six months to two years, so while you’re getting a bargain on price, it’s just compensation for the work you’ll have to put back in.

 A good home inspection should only cost you a few hundred dollars and can save you a lot of heartache. (Find a home inspector online at the American Society of Home Inspector’s website, http://www.ashi.org.) An inspection might turn up minor damage and neglect, such as stains, missing appliances, or an unkempt yard. It may also uncover the need to address larger problems, such as holes in walls or major leaks.

The good news:  only a small percentage of REO homes have major damage, and many repair issues are apparent as soon as you walk in.

4) Be financially savvy

I encourage potential buyers to get prequalified for a loan so that the seller knows the borrower will be able to close. If you plan to do a cash purchase (always better on severley damaged homes or homes with illegal additions), have proof of funds available in the total amount of the offer or purchase price.

If you want to buy an REO property, will you have trouble getting a mortgage? If the property you’re considering is in good condition, you shouldn’t have more trouble qualifying simply on the basis of the home being REO, and likewise, you won’t pay higher mortgage rates just because the lender knows you want to buy REO.

However, a significantly damaged property may close off some options for financing, because few mortgage financing programs exist for these types of homes.

“Federal Housing Administration (FHA) has ‘purchase and rehab’ mortgages available, and Fannie Mae was offering a ‘HomePath’ mortgage, which was similar, If the damage to the REO property rules out some options, you may need to come up with cash or finance your purchase through hard money loans.

5) Closing may take awhile or it could be a breeze

Bidding on an REO isn’t quite like making an offer on a privately owned home, where you hear back from an owner fairly quickly. Instead, you’ll submit your bid then you’ll wait for a response with a counteroffer. Since a bank is a business, you may end up dealing with more than one person or department, and it can take awhile to get all the paperwork processed. Once the bank has accepted your offer, the process will speed up and move along just like a purchase through a private owner. Banks may put conditions such as a daily per diem for not closing on time, which makes it important to have your financing arranged before hand.

Having sold over 1,000 REO properties since 2007, I have plenty of experience guiding buyers through the REO process. For more information or if you have questions, you can email me at dsouza@deansouza.com or call me directly at 510 931 7727 or go to my website at www.deansouza.com

Bye for now

The process can be frustrating and take more time.  On the other hand, because the home is an REO, the bank will already have taken care of any liens on the property, so your title search should be a breeze.

It’s possible to turn a fixer-upper into your own personal castle, as long as you are patient and don’t expect that an REO listing means an automatic windfall.

Having sold over 1,000 REO properties since 2007, I have plenty of experience guiding buyers through the REO process. For more information or if you have questions, you can email me at dsouza@deansouza.com or call me directly at 510 931 7727 or go to my website at www.deansouza.com

Bye for now,

Dean Souza

“Focused on the Success of Your Move”