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Dollars & Sense Real Estate Experts

Tapping the Expertise & Profit Strategies of a long time Investor

By CJ Holmes | Broker in Sonoma County, CA
  • FORECLOSURE CRISIS KILLING VALUES

    Posted Under: Home Buying in Sonoma County, Home Selling in Sonoma County, Foreclosure in Sonoma County  |  January 29, 2012 10:32 AM  |  790 views  |  No comments
    Listen to CJ Holmes on Radio KBBF-FM 89.1 today from 4p-6p about how we must stop our Foreclosure Crisis.

    In the next 3.5 months, 1,394 more homes in Sonoma county are scheduled for Foreclosure Auction.  During that time period, our home market will sell, at best, only 1330 homes. 

    Swamping our markets with Foreclosures and continuing to push people illegally out of their homes, ruins both their lives and our home values.

    We must unite to STOP the Foreclosure Machine, then push to get appropriate loan modifications for all 29,000 loans underwater in this county.  This will create the "bottom" others mention and stop our home values from the continued slide.

    If we don't do these 2 things, you can believe values will continue to drop regardless of what the Press Democrat says. 

    The PD seems to only quote and honor the agents that list and sell foreclosures.  They have yet to print anything I write or say.

    Every property owner ignores my warnings to the peril of their values.  Foreclosures are destroying the wealth of Americans, and giving that wealth to the Hedge Funds.

    Check out my alternate site: www.occupy-our-homes.info for all the details, list of future events, and articles about how the powers that be are Stealing Our Homes.

    CJ Holmes, real estate investor since 1977, broker since 2005, and market analyst since 2007, has personally handled hundreds of transactions, viewed thousands of properties, and dealt with countless agents.  She also owns a portfolio of income producing properties, and has developed unique market analyses to determine and predict price trends, which principles apply to markets nationwide. She can be contacted at (707) 578-5727, cjholmes@cjholmes.com, or www.cjholmes.com




  • Stopping Strategic Defaults

    Posted Under: Market Conditions in Sonoma County, Home Selling in Sonoma County, Foreclosure in Sonoma County  |  December 3, 2011 2:55 AM  |  899 views  |  2 comments

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    Blog Category: Help Me Stop the RuiNation of our Market
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    STRATEGIC DEFAULT FACTS

    -Strategic defaults are the natural and logical consequence of severe price decline in the value of someone's property.

    -As severe decline happens ‘right next door’, Sellers will decide that strategic default is their only choice.

    -Severe decline is caused by 3 Bank/Lender Rules that keep markets out of balance and forcing prices down.

    Modifying these 3 Bank/Lender Rules will stop price decline.  We MUST do this for decimated markets.  We must do this NOW.

    If out of balance markets are not helped, they will continue to decline.  Resulting drops in tax revenue could bankrupt governments and end up ruining most property owners. 

    Even the Banks/Lenders don’t know how to stop market prices from falling.  They need our help.

    HOW TO STOP HOME PRICE DECLINE

    Modifying (1-2 yrs) these 3 Lender Rules specifically for markets in distress will immediately stop prices from declining and return these markets to balance.

    We ignore this to our peril.

    LENDER RULE 1 - locks Sellers into short sales:  ‘Mark to Market’ Appraisals

    REOs or shorts often sell for a price far lower than current market value, which ‘marks to market’ this lower price on the entire neighborhood. 

    This lower price crushes more equity out of every home, pushes more loans upside-down, and locks in a whole new set of Sellers that now have to keep paying on upside-down loans, sell short, or lose homes to foreclosure.

    From then on, no matter what price a Buyer is willing to pay for a home in that neighborhood, the Buyer’s Lender insists on an appraisal that is required to take this new lower price into account, driving prices down.  New REOs and short sales are sold for ever lower prices to snag buyers.  Round and round, the cycle goes down.  This self-reinforcing price-destruction downward spiral is the LEADING CAUSE of strategic defaults. 

    Paying on a $350,000 debt when the house next door just sold for $200,000 causes most owners to seriously consider their options. 

    What options?  There aren’t any.  There are NO OTHER OPTIONS AVAILABLE for Owners other than to sell short or go to foreclosure. 

    Loan modification attempts have proven futile.  And with an upside-down home loan, that Owner cannot qualify for a new loan to buy something else without paying off the entire shortfall.  Who has hundreds of thousands of dollars to pay off an upside-down loan?  Nobody. 

    What else can the Owner do?  Just keep paying on an upside-down mortgage for 30 years?  Never move?  Never sell? 

    As Owners in many markets since 2007 watch prices decline year after year with no end in sight, they eventually become convinced that continuing to pay the mortgage will just expose them to losses unrecoverable in the future. 

    Enter strategic default. 

    LENDER RULE 2 - locks Home Buyers out:  No Loans for 3 years to Buyers with short sale/foreclosure on record

    This Rule has decimated Home Buyer demand.  No government incentives to Buyers can ever compensate for this loss. 

    In the 9 counties of the San Francisco Bay market, over 83,000 families are now locked out of buying for 3 years due to home loss.  This equals almost 1.5 YEARS’ WORTH OF ANNUAL SALES for this market (approx 50,000 sales per year).  This is ‘where the buyers went,’ sidelined by this Lender Rule.

    In the meantime, homes for sale (supply) continues apace as more and more Owners give up trying to hang on (due to job/income loss or strategic default) and decide to sell their homes short or foreclose.  More and more short sales exacerbate the downward spiral locking out more and more future Buyers. 

    A scary fact is, that overall, so far in 2011, more families per month are losing their homes to short/foreclosure than in 2010. (entire SF Bay Area)

    LENDER RULE 3 - locks Investors out of loans:  Major Restrictions against Investors

    These Lender restrictions against Investors have been instituted over the last 2-3 years and are taking their toll on the market. 

    -      - REO Cash Purchase Deed Restrictions – cash buyers cannot re-sell or refinance over 120% of purchase price for 60 days

    -      - Maximum 4 loans per investor – no loans available after the first 4 properties

    -      - No refinancing allowed for 6 months (sometimes 12 months) for a cash purchase

    -      - No Investor sales to Home Buyers for at least 91 days, with huge restrictions if sale price is over 120% of purchase price, regardless of repair costs

    These Lender Restrictions discourage investors and have greatly reduced investor purchases, directly contributing to price declines. 

    STABLE PRICES:

    Stable home prices require balanced supply and demand. 

    When Rule 1 locks more Sellers into short sales, Rule 2 locks out more Home Buyers, and Rule 3 severely restricts Investors, how can prices be expected to rise??  They can’t.

    Once markets are seriously out of balance, these 3 Lender Rules ensure prices will continue to decline for the foreseeable future unless drastic changes are made. 

    OCCUPY OUR HOMES is an effort for all owners to join together and demand changes from the Banks to keep owners in their homes.  Join us.

    CJ Holmes, real estate investor since 1977, broker since 2005, and market analyst since 2007, has personally handled hundreds of transactions, viewed thousands of properties, and dealt with countless agents.  She also owns a portfolio of income producing properties, and has developed unique market analyses to determine and predict price trends, which principles apply to markets nationwide. She can be contacted at (707) 578-5727, cjholmes@cjholmes.com, or www.cjholmes.com

  • New California Law Removes Owner Liability

    Posted Under: Market Conditions in Sonoma County, Home Selling in Sonoma County, Property Q&A in Sonoma County  |  September 22, 2011 6:40 PM  |  901 views  |  No comments

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    Blog Category: Real Estate Nitty Gritty

    Listen up!  This announcement applies to every California upside-down homeowner that refinanced since they purchased their home, and every upside-down investor that purchased or refinanced a home or 1-4 units.

    It used to be:  If the owner refinanced his home, or the property was an investment (1-4 units), the owners were on the hook to pay the deficiency if the lender decided to sue them for it. (deficiency:  the difference between what is owed on the loan(s) and what the lender(s) receive(s) as payoff). 

    NOW: On July 15, 2011, CA legislature enacted a new law protecting homeowners and investors against deficiency liability after a short sale in California.  Note that this law  applies only to single family homes and 1-4 units. And this law does NOT change the deficiency liability of owners if the property goes to foreclosure. The old rules still apply.

    So in general (please call us for exceptions),  homeowners that refinanced and INVESTORS that bought or refinanced after purchase are now NOT liable for deficiency IF they sell the property short.  They can still be liable for deficiency if they go through foreclosure as they were before.   

    Prediction: Watch the for the coming boom in short sales! If you thought 35% short sale market share was high (Jan 2011), short sale market share will probably skyrocket before this mess is over

    Please contact us to help determine your specific situation. We care about you and want to be sure you’re off the hook. We also provide very private solutions to short sales, and do everything we can to reduce your stress and even keep you in your home if possible.

    CJ Holmes, real estate investor since 1977, broker since 2005, and market analyst since 2007, has personally handled hundreds of transactions, viewed thousands of properties, and dealt with countless agents.  She also owns a portfolio of income producing properties, and has developed unique market analyses to determine and predict price trends, which principles apply to markets nationwide. She can be contacted at (707) 578-5727, cjholmes@cjholmes.com, or www.cjholmes.com

  • Improved Exit Plan Shopping

    Posted Under: Home Buying in Sonoma County, Home Selling in Sonoma County  |  September 5, 2011 8:24 PM  |  361 views  |  No comments

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    The best investors in real estate always work the deal backwards.  That may sound rather strange, but if you don't know where you want to end up, how can you start doing something and  be sure you'll end up there?

    I call it the "Exit Plan":  figuring out first what results are desired, and when are they desired, and what it will take to get there. 

    Before a smart investor buys a property, the following questions are carefully considered and reliably answered ideally mirroring reality as close as possible.  Only then is it likely the investment will achieve the desired results.

    Below are some key questions necessary for a solid Exit Plan:

    1. What final results are desired?
    2. How long will it take to get these results?
    3. What will it cost to get these results?
    4. What is a reasonable exit price?

    Unrealistic answers to these questions have tripped up lots of investors, causing losses instead of the desired gains.  It is imperative investors work closely with those experienced in each aspect of investing, to get as reliable answers as possible to each of these questions.

    After the answers are determined, then an investor will better know what the property must be purchased for to achieve the desired results.

    CJ Holmes, real estate investor since 1977, broker since 2005, and market analyst since 2007, has personally handled hundreds of transactions, viewed thousands of properties, and dealt with countless agents.  She also owns a portfolio of income producing properties, and has developed unique market analyses to determine and predict price trends, which principles apply to markets nationwide. She can be contacted at (707) 578-5727, cjholmes@cjholmes.com, or www.cjholmes.com

  • Would $100k lower FHA loan limit Hurt You?

    Posted Under: Home Buying in California, Financing in California  |  June 15, 2011 12:44 PM  |  343 views  |  No comments
    If your chances to buy a home would be hurt or eliminated if FHA reduced their conforming loan limits by $100k, please contact me asap.  I have a news reporter asking for real life examples. 

    Thanks, cj.  cjholmes@cjholmes.com, www.cjholmes.com, 707-578-5727.
  • Artificial Real Estate Depression

    Posted Under: Market Conditions in Sonoma County, Home Buying in Sonoma County, Home Selling in Sonoma County  |  June 2, 2011 2:54 PM  |  377 views  |  No comments

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    Blog Category: Help Me Stop the RuiNation of our Market
    Sign up now: 2 Steps to Revitalize Our Real Estate Market

    With many home prices now at 50% of what they were just a few years ago, how can prices still be falling?  And where will it end?

    Home prices are always the result of supply versus demand.   And markets have typical annual sales volumes based on population.  So if supply somehow doubles, can that market double its buyers?  No.  Doubling supply without doubling buyers forces price declines, just as sidelining half the buyers with normal supply forces price declines.

    Our markets now have an Extreme Artificial Over-Supply of homes for sale exacerbated by this year’s boom in short sales.  Shorts now double or triple foreclosure listings.  In some markets, over half the listings or more are distressed homes.   Three years of price declines have pushed more and more owners upside down, who now have to sell short just to move.   Or they worry their home will never again be worth the debt against it and have been given no reasonable method of keeping it.   It’s hard to keep paying a $500,000 mortgage when the house just like it next door sold for $250,000 or less.

    At the same time, our markets now have an Extreme Artificial Under-Demand of buyers.  When sellers lose their homes to foreclosure or short sale, bank lending rules prohibit them from obtaining loans to buy other homes for three years.   This artificially reduces the number of buyers available to purchase homes.  For example, from 2008-2010, 81,408 sellers lost their homes in the San Francisco Bay area (9 counties), almost half of the 166,667 homes sold.   That’s a huge number of sidelined buyers.

    Every short sale and foreclosure forces Mark to Market on all comparable homes, systematically decimating equity.  This increases the number of distressed owners losing their homes, adding to supply, and locks them out of buying for years, lowering demand.

    This vicious cycle will not end until either most homes with loans have gone through foreclosure or short sale, or something is done to stop the cycle.  If nothing is done to stop price declines, it is very likely  banks will make loans even harder to get, further reducing available buyers and compounding price declines.  Some homes have already gone through foreclosure once and are now again in short sale.  This is devastating to bank loan portfolios.  The longer we wait, the more drag falling prices will have on our economy, our morale, and our future. 

    The first step to stopping the cycle could be as simple and straight-forward as getting the banks to allow distressed sellers to get a mortgage again after one year instead of waiting for three years.  In the Bay Area, that one rule change would allow over 57,000 buyers back into a market that currently has 30,024 active listings.  All those additional buyers would quickly push the supply-demand ratio back into balance, stabilizing the market.  This would begin to reverse the downward cycle the market is currently in.

    This is a First Step Solution worth championing. 

    CJ Holmes, real estate investor since 1977, broker since 2005, and market analyst since 2007, has personally handled hundreds of transactions, viewed thousands of properties, and dealt with countless agents.  She also owns a portfolio of income producing properties, and has developed unique market analyses to determine and predict price trends, which principles apply to every market nationwide. The buyer-seller motivations, the lender-bank restrictions, and the market dynamics are universal. She can be contacted at (707) 578-5727, cjholmes@cjholmes.com, or www.cjholmes.com

  • You'll Look Smart Tomorrow if You Buy Today

    Posted Under: Market Conditions in Sonoma County, Home Buying in Sonoma County, Rent vs Buy in Sonoma County  |  May 30, 2011 10:38 AM  |  416 views  |  No comments

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    Blog Category: Real Estate Nitty Gritty

    The scare of another drop in real estate prices is distracting buyers from what is really important. Affordability.

    Everyone needs to live somewhere, choosing to either rent or own. Now, with many homes actually priced below their rental value, owning the home costs less than renting it. And that’s not counting ownership tax advantages.

    Rental demand is growing, increasing rents.  So why be subject to a landlord and increasing rents, when by purchasing, the loan payments will be the same for the next 30 years?

    Besides affordable home prices, loans are still very inexpensive and have easy, 3.5% minimum down payments.  Higher down payments, up to 20%, are being pushed by both banks and the government.  This means that for a $300,000 home, the down payment would increase from $10,500 to $60,000!

    That’s a lot of saving up for any renter to get into home ownership. There is no final decision yet about increasing the minimum down payment to 20%. But without a doubt, down payment increases will make it increasingly harder in the future for renters to step into home ownership. 

    With both affordable home prices AND affordable down payments, now is definitely the time to buy.

    Look smart tomorrow and be glad you bought today.


    CJ Holmes, real estate investor since 1977, broker since 2005, and market analyst since 2007, has personally handled hundreds of transactions, viewed thousands of properties, and dealt with countless agents.  She also owns a portfolio of income producing properties, and has developed unique market analyses to determine and predict price trends, which principles apply to every market nationwide. The buyer-seller motivations, the lender-bank restrictions, and the market dynamics are universal. She can be contacted at (707) 578-5727, cjholmes@cjholmes.com, or www.cjholmes.com

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