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By CJ Brasiel | Agent in San Jose, CA
  • Behind on your mortgage? Don't wait!

    Posted Under: Home Selling in California, Foreclosure in California  |  December 1, 2011 1:23 PM  |  2,899 views  |  No comments
    If you are not sure whether or not you can continue to make your monthly mortgage payment consider these options:

    1. Can you refinance? There are several programs that can help you refinance even if you owe more on your home than it is worth.  HARP, HAMP, and Keeping Your Home California.
    2. Is a short sale possible? With a viable hardship, debt-to-income ratio out of balance, and overall insolvency, it is possible to short sale your home.  Short selling your home can potentially reduce the negative impact on your credit.  It may also allow you a better chance to buy a home in the future.
    3. Is a deed-in-lieu an option?  If you can't short sale but still want to do all you can to reduce the impact to your credit score, a deed-in-lieu may be the right option for you.
    4. If all of the above aren't options, can bankruptcy be the right choice?
    5. How will a foreclosure impact my future?

    The best advice is don't wait.  The sooner you understand your options, the better choices you can make.  Talk to a local real esate professional, a local mortgage professional, a real estate attorney, and a tax professional to understand your options.  Gathering information and professional advice will be the best chance to make a change and allow you to move on with your life. 

    CJ Brasiel is a REALTOR®,DRE01509579 Broker Associate with Fireside Realty located in the great neighborhood of Willow Glen in San Jose.  Committed to exceeding clients' expectations through market knowledge, strong negotiation skills, prompt communication, and a passion for making each transaction a win-win. Certified as a Distressed Property Expert and Short Sale Negotiator experienced and successful at helping struggling home owners move on with dignity. This content can not be duplicated without permission from CJ Brasiel. www.TalkToCJ.com

  • Forcing Teachers into Foreclosure: Thank you Governor Brown

    Posted Under: Home Selling in California, Foreclosure in California  |  August 19, 2011 6:17 PM  |  2,914 views  |  2 comments

    The challenge with being involved in your government is having the time and energy to dig through the information to find the facts. Most of the time, the average citizen (like myself) only reacts to a public policy change when it lands on our doorstep. I have been following the debate regarding Governor Brown's shutting down of the state's Redevelopment Agencies. I have attended many functions over the last year where developers swore that this would have a huge impact on their ability to develop homes for "in-fill" areas. Simply put, without government subsidies it would not be cost effective to create new town homes in a transitional neighborhood of San Jose because affordability would be out of reach for the average resident.

    If you listened to the debates, why should property taxes go to big developers? Pet projects like parking garages in Los Angeles and high rises in San Jose, were considered foolish in a time of economic recession. Makes sense to stop providing subsidies to wealthy builders. Or so it seemed at first glance. But redevelopment money is not just for big developers.  Redevelopment money was  intended to rebuild neighborhoods by providing encouragement to builders to take a risk. Redevelopment money was meant to fuel jobs in areas of the county where there were very few jobs to be had. Redevelopment money was meant to provide an opportunity for lower income families to own a home. Redevelopment money was meant to support public servants like teachers and firefighters the ability to afford a home in Silicon Valley when their salaries alone where not enough.

    The Governor was successful at making sure developers did not get subsidies. But what he also did is gave teachers and other public servants no choice but to accept foreclosure. Why? If a teacher is facing a hardship, loss of job (teacher cuts), divorce, or health issues and can no longer pay their mortgage they would normally have the option of a short sale. However, many teachers and other public servants like fire fighters, police, and paramedics, utilized redevelopment funds to provide down payment assistance through low interest loans when buying a home. But now, the redevelopment agencies are closing and per the San Jose short sale manager for these loans, there is a moratorium on these negotiations for short sales or loan modifications normally processed through the department. Which directly leads anyone who has one of these loans into potential foreclosure. In a short sale, all lien holders must be willing to approve a short pay off of the note. So even though the senior lien holder might approve the short sale, if the second lien is owned by the City of San Jose through redevelopment funds, there will be no approval. Redevelopment Sacrifice

    Even more illogical is the fact that the closure of redevelopment agencies was meant to save the state money. But if a teacher is forced to accept foreclosure over a short sale then not only does the state loose any potential chance to recoup money on the junior redevelopment funded lien but now they have a public servant who has damaged credit and more likely to sink further into financial challenge and need welfare help. This simply does not make sense.

    When a home owner submits for short sale approval they must provide every possible financial statement to support the fact they can no longer afford this home.  Two year tax returns, bank statements, monthly bills, 401k, pay stubs, and a personal letter describing their hardship.  Too bad we as tax paying citizens are not provided the same full disclosure when decisions like ending redevelopment agencies are made.  This is not a decision that only effected "fat cat developers".  This decision effects many more average Americans than any of us most likely realize.  This public policy change has now landed on my and my clients' doorstep and this blog post is the first step to my response to our state government in regards to this issue.

    CJ Brasiel is a REALTOR®, Broker Associate with Fireside Realty located in the great neighborhood of Willow Glen in San Jose.  Committed to exceeding clients' expectations through market knowledge, strong negotiation skills, prompt communication, and a passion for making each transaction a win-win.  This content can not be duplicated without permission from CJ Brasiel.

  • How much of the San Jose real estate market is short sales?

    Posted Under: Market Conditions in San Jose, Home Buying in San Jose, Foreclosure in San Jose  |  March 8, 2011 2:13 PM  |  3,940 views  |  2 comments

    I have been tracking short sales and REOs (foreclosures) in the San Jose area since June 2007.  I can tell you, consistently, short sales have represented about 30% of active listings and foreclosures have represented about 10-15% of the active listings. I show homes that are listed as short sales.  I hear there are agents that won't show short sales.  Not sure how they do that. I started working on the numbers to find out how many short sales there are, how long they have been on the market, how many are pending, how long they have been pending, how many are vacant, and how those numbers are different between single family homes verses condos and town homes.  Wow.  

    There is no doubt there are a lot of home owners in trouble.  There is no doubt the banks have inventory that they have not sent back to the public consumer.  There is no doubt you can complete a web search on  shadow inventory and find a ton of articles about the reality of its existence and whether or not these homes will come to market.  More importantly, when will they come to market?  Who knows?  Maybe some high paid executive of the in the asset manager kingdom knows.  They aren't telling.  But in San Jose, foreclosures are the smaller part of the market.   I am more interested in the 1/3 of the market called short sales.  These are the challenges of real life sellers, buyers, and agents.

    Right now  there are 777 active short sales in San Jose.

    Of that 777 homes, 81 have been on and off the market for over 1 year (10%) and 17 have been on and off the market for over 2 years (2%).  Of the total listings pending sale, 1635 are short sales.  Of that 1635,  123 have been pending for over a year and 19 have been pending for over 2 years! 104 of these homes are vacant. Anyone think we have a problem moving short sales out of the hands of struggling borrowers and into the hands of new eager buyers?  Why is this so difficult to do?  Let me count the ways:

    1.) Bank short sale process is non-standardized and the banks are overwhelmed by the process. This is improving and I applaud the efforts that I have witnessed with Bank of America - Equator system, and Wachovia/Wells Fargo Short Sale Fast Track.  There is still a great deal of improvement needed.  Automated systems are nice but standardization of short sale packets, approval process, assigned negotiators up front, contact information, and communication is critical.

    2.) Many sellers are desperate, scared, and some are unwilling or unsure of what to do next. Most can't afford their house because of hardship. Their credit is taking a monthly hit and in many cases they can not even find an apartment because of damaged credit. They try loan modifications and are stuck in a quagmire worse than the short sale approval process and are simply tired of the entire experience.  Can you imagine having your house on the market with people coming in and out every day, 7 days a week for over a year? Ask any seller after the experience of selling a home and they will tell you how quickly they tired of keeping everything picked up and how stressful it is to constantly manipulate their home life around showings.  No surprise that some short sales do not have access  and even more make it nearly impossible to make an appointment.

    3.) Short sale agents have less than 3 years experience. Even if an agent has been doing short sales full time, each one is different.  Different circumstances, different lenders, different negotiators, and different levels of cooperation from all involved.   Some agents hire "professional" negotiators to handle their files because they are tired of the daily phone calls and pleading  with negotiators to make it happen.  On top of the cost of the negotiator, the bank reduces commission on average by 1%.  Can you imagine the motivation you would have to do your job for a year before you got paid and then your paycheck was cut 30-40%?  Many short sale listing agents would be happy with a nickel for every time they answered an email or phone call that ask the questions: How many lenders? Any offers? Who are the lenders? Yet I believe if you are going to take a short sale listing, it is critical to provide the absolute best service possible.  If the agent can't, doesn't want to, or gets tired of it, they should give the listing to another agent.

    4.) Short sale buyers believe all short sales are going to be deals. But in fact, banks know the value of the home and expect a near market if not at market offer.  Of the 87 short sale homes that sold the first 15 days of February, the average sales price to list ratio was 99.7%.  More specifically, 16 sold for the same as list, 31 sold for higher than list, and 40 sold below list.  If the home (mostly condos) were priced lower than $200,000 it was more likely to go under list price.  I assume that is because they are more likely to be all cash deals.

    The final information I want to share with you are the number of short sales for different  price points.  If you are a first time home buyer, excited that you can now afford a home in California, you will be competing with other buyers for homes that are mostly short sales.  Make sure you understand the process of offering on a short sale and don't assume because the days on the market are long, that they will take a discounted sales price or will not be snatched out from under you while you are trying to decide.  It is a very competitive market. If you want to talk about your strategy to buy a home or in particular to buy a short sale or foreclosure, contact me.

    San Jose Stats for Single Family Detached Homes

    San Jose Stats for Condos and Town Homes

    All data is collected from the multiple listings service and presented graphically by CJ Brasiel.  The information is deemed reliable but not guaranteed.  The graphs and content of the blog are property of the author CJ Brasiel and should not be used, duplicated, or distributed without express permission by CJ Brasiel.

    CJ Brasiel is a REALTOR®, Broker Associate with Fireside Realty located in the great neighborhood of Willow Glen in San Jose.  Committed to exceeding clients' expectations through market knowledge, strong negotiation skills, prompt communication, and a passion for making each transaction a win-win.  This content can not be duplicated without permission from CJ Brasiel.
  • Short Sale Deals. Really?

    Posted Under: Home Buying in California, Home Selling in California, Foreclosure in California  |  October 5, 2010 7:15 AM  |  1,107 views  |  2 comments

    The new Multiple Listing System (MLS) software provides a quick glance of information pertinent to real estate professionals about the daily real estate world. This "hot" list includes New Listings, Pending Sales, Reduced List Price, Sold, and Increased List Price. Increased list price? It caught my eye when I realized in the last week, 32 homes in the San Jose area have increased the list price of the home. I had to know why. In this market, what kind of seller believes, after sitting on the market for a while, they should increase the list price? Yep, you guessed it. Lenders.

    Out of 32 homes that increased the list price, many were simply clerical errors and the fact that the agent forgot to include an "8" in the list price. But 19 of these homes were short sale listings where the list price had been increased. Many times after it had been a "pending" sale. This means that the list price was published on the MLS, an offer was received, accepted by the seller, and then submitted to the lender for short sale approval. Something happened and the deal did not go through and now the home went back on the market with a new, higher list price.

    I dug into the history a bit more and found that in many cases, there were multiple offers, the highest offer was submitted but before the lender could approve the short sale, the buyer walked. Therefore the listing agent decided to bring the home back active with the highest price offer to find another buyer. Why? Mainly because if the agent did not list at the higher offer previously received, the lender will almost certainly question it and at minimum counter to the last highest offer price. Short sale listing agents do not like wasting time on offers they do not think will work with the lender. Many times, we do not have time to waste as a foreclosure trustee sale is looming on the horizon and our selling client's lives are in limbo until we get the job done.

    Risk with moneyThe second possible scenario is that the offer was submitted to the lender and the lender counters with a higher offer, the buyer says "no way" and cancels. Now, some agents will re-activate this listing on the MLS as an "approved" short sale at "X" dollars. I don't agree with this practice as there is no approval yet, simply a counter. Even if the lender did give an actual approval letter and the buyer walked after receiving the approval letter, any new offer will have to be reviewed all over again. Lenders look for "straw buyers" as an indication of fraud and do not allow for buyer names to simply be switched on approval letters. Also, if the deal fell out and it took a month before another buyer submits an offer, the lender will want to re-run the numbers as there is now one more month of late mortgage, taxes, and the like associated with the bottom line.  In my opinion, there is no such thing as "already approved short sale" if the listing is active.

    I didn't want to be to quick to jump to conclusions on why exactly there were such a high percentage of price increases on short sales but after I looked at the data, another trend appeared. Most new list price were almost exactly 10% higher. The average of the 19 homes actually came out to 10.5% higher. Yep. There were some as low as a 3% increase and some as high as 23% but most fell between 10-12%. Hmm.

    Did you know in San Jose, the average sales price in 2010 compared to 2009 increased 11.8%?

    I also looked at the comparables for the neighborhoods where these 19 homes were listed. I have not seen the inside of each of these homes and am only comparing online photos but in general looking at the comps for the very local area and similar square footage, number of bedrooms and baths, the original short sale list prices were within 2-5% of comparable list prices. Only one showed a 20% lower price than the area and it had also been a short sale for over a year with multiple offers and canceled contracts.Example of increased list price

    Assuming the home is comparable to other properties in size, location, and condition pricing within 2-5% is completely logical for a short sale. Some agents will price the home 10-20% below market when the trustee sale is too close for comfort so as to create a frenzy and drive the price with a quick market demand response. But as a part of the short sale package an agent must (should) submit photos, a repair list, and comparable properties in the neighborhood. If the list price is not close to the comps, there better be a written, justifiable reason to why it is not listed at market value. Not to mention, more and more lenders are completing full blown appraisals on short sales and they will absolutely compare the numbers against the offer in hand.

    In the end, the real real estate question comes to me. Why would a buyer want to wait 3-18 months for a short sale if there is no discount advantage? ( I kid you not, I have personally witnessed a short sale with WAMU, then owned by CHASE, with PMI and an investor take 14 months to be approved.) Did I mention short sales are AS IS purchases? Meaning, the lender will not normally approve credits for repairs found during inspections. If the buyer does ask for repairs or credits for repair the short sale approval is void and the approval process starts all over.

    There are at least two assumptions we can make from the information:
    1.) Lenders will continue to expect short sales to be bought at market value by buyers willing to wait for however long it takes for an AS IS home.
    2.) Buyers will realize that buying a short sale under market is probably not likely and move on to real deals.

    Which will lead to short sales being sold at or above market value (assuming there are some repairs) or short sales not being sold and becoming foreclosures. Foreclosures cost the bank money and will certainly be more than any market discount of 2-5% a short sale could collect in the market place. But that would require logic. So far, I am not seeing lots of examples of logic in this market.

    If you are a buyer looking for a deal, I am so here for you. I will let you know the pros and cons of short sales, foreclosures, relocation properties, and good 'ole fashioned (few and far between) equity sellers. There are deals, but they don't necessarily have a blue light hanging over the doorway or a particular title like "short sale" or "REO". Finding a deal depends on a buyer who knows what they have to have, would like to have, who is working with a real estate professional who knows the market, the value range, and is an excellent negotiator. I am available to anyone who wants to hear my opinion on a particular home, neighborhood, or market trend.  Contact me if you would like to talk about your next move.

    CJ Brasiel is a REALTOR®, Broker Associate with Fireside Realty located in the great neighborhood of Willow Glen in San Jose.  Committed to exceeding clients' expectations through market knowledge, strong negotiation skills, prompt communication, and a passion for making each transaction a win-win.
  • Good News in Real Estate 2009!

    Posted Under: Foreclosure in San Jose  |  January 10, 2009 8:34 AM  |  757 views  |  2 comments

    As a real estate professional, I can only watch so much T.V., read only so many Internet articles, only listen to a certain number of people before I end up back in my peaceful sanctuary mumbling to myself.  You might be surprised to hear that my sanctuary is not a place of worship or a bar but - out in the neighborhood looking at homes for sale.  Yep, I love looking at houses.  In some ways, I enjoy it more now then in the boom years.

    I can’t tell you how many times in the last six months that I have unlocked the door of a house, walked through, and said to myself, “Not bad.”  Then looked back down at my listing sheet to confirm the price and said, “Not bad at all.”

    My escape from the constant bashing of the real estate market results in a scrap-book-like frenzy of putting together pictures of homes for clients who have wanted to buy for years but simply could not afford the kind of home they wanted in a neighborhood they wanted to live in.   Now, I am able to call them up and say, “I think I might have a home you might be interested in.”

    I know.  You’re thinking, “But who can get a loan in this market?”.  Guess what?  There are literally thousands of hungry loan officers out there ready to find you a loan.  If there is a way, they can find it.  Not the crazy exotic loans. Those are not even available anymore.  Good-old-fashioned fix rate loans.

    Since I titled this blog post “ Good News in Real Estate for 2009” let me get to the point.
    First and foremost, like Alan Murray stated in the Wall Street Journal, this is a good year to invest in real estate and “you can benefit from a once-in-a-lifetime double bonus of low prices and low interest rates.” Take a look at the graph below.  If there are deals to be had with foreclosures, we have the inventory of foreclosures to make a lot of deals!

    In addition to falling prices, all the previous years of begging on behalf of my clients for sellers to help with closing cost while the listing agent displayed that gentle gesture of “talk to the hand” has provided me with amazing confidence to negotiate closing costs paid by seller on almost every one of my deals.  Closing cost on a loan can be any where from 1.5% to 3% depending on the loan type.

    Secondly, affordability is coming back to the Bay Area, according to The California Association of Realtors, “the percentage of households that could afford to buy an entry-level home in the state rose to 53 percent in the third quarter of 2008, compared with 24 percent for the same period a year ago.” Specifically for Santa Clara County, “the affordability index rose to 39 percent from 21 percent.” The “affordability index” measures the percentage of households that can afford to purchase an entry-level home.

    Third, prior to 2008 almost no FHA loans were available to buyers in the Bay Area. Why? The loan limit for FHA loans was $417,000.  In 2008 that was temporarily increased to $729,000 and in 2009 will be $625,500.  In my humble opinion not having the FHA option prior to 2008 is part of what created these exotic loan products that placed so many buyers in losing situations. Why are FHA loans important to home buyers? Because FHA only requires 3.5% down payment for qualified borrowers.  This also helps with affordability because for those buyers who can afford the monthly payment but do not have 10-20% down, they have an option not available prior to 2008.

    Fourth, rental rates are going up.  In fact since 2005, San Jose has seen a 26% increase in rental rates.  Analysts are projecting rents will rise nearly 10% annually over the next several years for a two-bedroom rental.

    For this next point I have to disclose: Because tax rules vary based on income and other factors, you should consult an accountant or financial advisor for advice on your particular tax situation.  The fifth reason is the tax benefit of owning a home.  Where else can you get a tax-free gain of $250,000 if you are single and $500,000 if you are married on your investment?  Also interest on the home loan, property taxes, lending costs in the way of “points”, and moving expenses are all possible avenues for tax savings.

    Believe me, I could go on and on but won’t.  I also want to add that it is NOT the best time for everyone to buy.  I DO NOT think all is roses and pushing someone to buy anything is a very bad strategy.  What I do believe is that if you have wanted a home and thought you would never be able to afford the Bay Area, now is the time to reconsider that premise.  Find an agent that you like, that you trust, and that gives you all the time and information you need and buy a home.  It may very well end up being the best year for investing in real estate.

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