Daniel Zia

Hello Sandra,

Great question. Unfortunately, the lending market and atmosphere has changed dramatically in the past 12 months. There is virtually no 0% down financing through conventional channels. That said, if you are a first time home buyer, there are FHA loans available that allow you to purchase a home with ath as little as 3% down (I believe that number is increasing to 3.5% in January). There are some programs out there that allow the seller to credit back a certain % to the buyer for closing costs, so theoretically a 0% down option may be possible that route. Another way to achieve a 0% down purchase is get a conventional 1st loan for 75-80% of the value of the property and then get the seller to carry back a 2nd loan for the remainder. This situation could also be combined with an FHA loan. That type of situation does require a motivated and flexible seller, and expect to pay a significantly higher interest rate on that 2nd loan as the seller is taking the brunt portion of the risk should you, as the buyer, default on the loan.

I hope that helps. I'd be happy to talk to you more about the different requirements for FHA or conventional loans. That said, your best bet is to talk to a qualified loan specialist, and I'd be happy to recommend one, or several, here in the Santa Barbara area which are excellent.

Please feel free to call me on my cell phone, any time, at 805-637-7148. - Tue Nov 4 2008, 21:12

Hello Bernice,

There are two classifications of "foreclosure homes". The first is labeled "short sales". These are homes that are currently going through the foreclosure process, but have not become banked-owned yet. In this process, the homeowner has to classify for being in financial duress and can no longer make their mortgage payments. They approach their bank and a real estate agent and all three parties work to sell the home before it goes through foreclosure process and bank to the bank. These homes are sold for less that what is owed on the property, so not only is the homeowner losing all their equity, but the bank is also taking a major loss. Sometimes the bank is willing to do this though if they consider it the "lesser of two evils". Often times, if they take a property back in foreclosure, they have repair/maintenance costs, legal fees, marketing costs, etc. They also are severely limited in the amount of money they can lend out based on the dollar amount of real estate they are holding in their portfolio. Short sales can be extremely frustrating for buyers, so I also caution my clients against moving forward on one of these properties. While the seller may approve the offer right away, the bank or banks may not give final approval until 8-10 weeks, or more! I had one recent client who waited 100 days for the Bank's final approval until they told us "no". It was an extremely frustrating process for all parties involved.

As to the owner foreclosure situation, these are classified as REO's or Real estate owned properties (Bank-owned properties). These are properties that have gone all the way through the foreclosure process and are currently owned by the bank and all their books. The banks are very motivated to sell them and as a homebuyer, the process of buying one of these homes is very similar to working with a typical seller. REO's are some of the best deals on the market in the under $1 million sector and I'd be happy to recommend a few. There are some caveats to working with a bank when buying an REO. One of these is that they will counter your offer with a standard, typically 8-page, counteroffer/addendum that basically states that they know nothing about the property and that they don't have to fill out the same disclosures as a typical seller. In addition, banks can be less flexible as far as creative offers and prefer "As-is" offers where items like repairs, pest work, etc. are already incorporated into a lower offered price by the buyers. They can also be less flexible during escrow if issues arise, you need to extend escrow, etc. All-in-all I highly recommend not pursuing short sales, but definitely pursuing bank-owned properties as well as properties listed by conventional motivated sellers.

I hope this helps. Please feel free to view my website for more information: http://www.theziagroup.com. I would love to assist you in your home search. Please call me at 805-637-7148 or email me at Daniel@ZiaGroup.com. I am available to speak more on these issues at your convenience. Have a good day. - Wed Oct 8 2008, 08:38

Frank,

I do echo Jon's sentiments re: paying all cash for your property. It may be worth it to look in that slightly higher price range, because most of my clients in a similar position have been far happier in the $1.2-1.4m category than the $1-1.2m, evening considering the higher payments. THat specific price break seems to open quite a few additional options as far as better location/neighborhood, higher quality construction, nicer amenities, view, etc.

As far as 611 E Sola. That is a nice property, and the location is a nice mix of close to downtown, but still on a quiet street away from the hustle and bustle. The largest negative is that the master bedroom only has a half bath, and the room isn't large enough to expand to a nice master bathroom. For most conventional buyers, this is going to be a major problem. Just my 2 cents. - Mon Sep 29 2008, 15:59

Frank,

Here are all the homes from $950,000 to $1,275,000 from Montecito to Hope Ranch: http://www.flexmls.com/cgi-bin/view.cgi?20080928062447034432… If you tell me more about what you are looking for, I can narrow down the list to a select handful you may be most interested in. The inventory expands quite a bit if you would consider a 10-20 minute drive in either direction (Carpinteria and Goleta). - Sat Sep 27 2008, 23:26

Good evening Frank,

That's a great question. The relative "strength" of cash in today's market is a bit of a mixed bag. Some sellers are very concerned about today's financial markets and will give significant extra weigh to an extra cash offer. Sellers that have gone through one or more frustrating escrows with buyers who haven't been able to get loans would also be in this category. That said, there is still such high demand in SB from home buyers, that the vast majority of sellers, while they would obviously prefer a cash buyer, they are not willing to take a significantly lower offer in exchange for the greater surety of a smooth close. In the end, the seller gets paid cash regardless of whether the buyer gets a loan. For the first time, I recently heard of a multiple offer situation on an REO (Roughly 60% have multiple offers these days) where the bank accepted the 2nd or 3rd highest offer because it was all cash. This is by far the exception to the rule.

Most homes in our current SB market are selling on average of 7-10% less than their original asking price. If you have $1.1m and definitely do not want any kind of loan (You may want to discuss with your accountant/tax professional the pros/cons), I would look up to $1.2m, maybe $1.25 or $1.3m if you are content to wait for sellers to go through price reductions. If you are hoping to come to buy an already competitively priced property for more than 5-10% under the asking price, you may need to adjust your expectations as we simply are not seeing that in our market, even with our recent financial bumps.

I would be more than happy to email you over what is available in your price range, and depending on your needs (other than 2+ bedrooms) there really is some nice inventory out there. You can also search all the homes in the MLS on our website: http://www.TheZiaGroup.com. In addition, often times I learn about properties that are "quietly for sale" or are not yet listed in the MLS or online, called "pocket listings". If you tell me more about what you are looking for, I may be able to recommend a pocket listing or two that may fit your needs. My clients really appreciate the opportunity to buy a home without the competition of it being on the open market yet.

Another service that may be helpful for you as you watch the market, or actively search, is our automatic email home finder. With this service we create a custom search in the MLS for you using your specific search criteria. Then, every week, or at a frequency of your choosing all of the new listings that match your criteria will be emailed to you. It's a great way to learn about, or keep up-to-date on the current inventory in our market and gives you a leg-up on other potential buyers who only hear about properties through the newspaper. If you are interested in having me set you up on this service, please let me know.

I hope that helps. I look forward to speaking with you. You may reach me any time on my cell: 805-637-7148 or via email: Daniel@ZiaGroup.com. - Sat Sep 27 2008, 23:23

I would STRONGLY disagree with "NonRealtor". Santa Barbara is not like the other markets in California. We aren't seeing prices softening any more, but holding stable at a nice low bottom end. We are seeing quite a few multiple offer scenarios, both REO and non REO, more so than any other part of California that I know. All signs put to the next 6-12 month window as the best time to buy. If prices to continue to soften, it won't be more that 5-7% scenario best (or worst depending on how you look at it) case scenario. If interest rates go up, that will more than offset any potential advantage of waiting. As further confirmation, my wife and I are looking to buy a piece of real estate in SB and we have waited the last few years. We're actively searching and plan to buy in the next 6-12 month, preferably before the Summer active season hits.

If you would like to see some of our testimonials go to: http://www.theziagroup.com/Testimonials.php - Sun Sep 28 2008, 08:21

Frank,

Here are all the homes from $950,000 to $1,275,000 from Montecito to Hope Ranch: http://www.flexmls.com/cgi-bin/view.cgi?20080928062447034432… If you tell me more about what you are looking for, I can narrow down the list to a select handful you may be most interested in. The inventory expands quite a bit if you would consider a 10-20 minute drive in either direction (Carpinteria and Goleta). - Sat Sep 27 2008, 23:26

Good evening Frank,

That's a great question. The relative "strength" of cash in today's market is a bit of a mixed bag. Some sellers are very concerned about today's financial markets and will give significant extra weigh to an extra cash offer. Sellers that have gone through one or more frustrating escrows with buyers who haven't been able to get loans would also be in this category. That said, there is still such high demand in SB from home buyers, that the vast majority of sellers, while they would obviously prefer a cash buyer, they are not willing to take a significantly lower offer in exchange for the greater surety of a smooth close. In the end, the seller gets paid cash regardless of whether the buyer gets a loan. For the first time, I recently heard of a multiple offer situation on an REO (Roughly 60% have multiple offers these days) where the bank accepted the 2nd or 3rd highest offer because it was all cash. This is by far the exception to the rule.

Most homes in our current SB market are selling on average of 7-10% less than their original asking price. If you have $1.1m and definitely do not want any kind of loan (You may want to discuss with your accountant/tax professional the pros/cons), I would look up to $1.2m, maybe $1.25 or $1.3m if you are content to wait for sellers to go through price reductions. If you are hoping to come to buy an already competitively priced property for more than 5-10% under the asking price, you may need to adjust your expectations as we simply are not seeing that in our market, even with our recent financial bumps.

I would be more than happy to email you over what is available in your price range, and depending on your needs (other than 2+ bedrooms) there really is some nice inventory out there. You can also search all the homes in the MLS on our website: http://www.TheZiaGroup.com. In addition, often times I learn about properties that are "quietly for sale" or are not yet listed in the MLS or online, called "pocket listings". If you tell me more about what you are looking for, I may be able to recommend a pocket listing or two that may fit your needs. My clients really appreciate the opportunity to buy a home without the competition of it being on the open market yet.

Another service that may be helpful for you as you watch the market, or actively search, is our automatic email home finder. With this service we create a custom search in the MLS for you using your specific search criteria. Then, every week, or at a frequency of your choosing all of the new listings that match your criteria will be emailed to you. It's a great way to learn about, or keep up-to-date on the current inventory in our market and gives you a leg-up on other potential buyers who only hear about properties through the newspaper. If you are interested in having me set you up on this service, please let me know.

I hope that helps. I look forward to speaking with you. You may reach me any time on my cell: 805-637-7148 or via email: Daniel@ZiaGroup.com. - Sat Sep 27 2008, 23:22

As a follow-up, I would not recommend a long term lease-back. You will want a definite time frame to give your potential security of knowing when he/she will be able to move in. 60-120 days is a reasonable length of time, while still giving additional flexibility to make your move. In the worst case scenario, if you start to get close to that time frame without finding your replacement property you can negotiate a longer time frame with the buyer, or look for a short term weekly vacation rental (if it is a small time gap, i.e a couple weeks). - Sat Sep 13 2008, 07:46

Hi Triplea,

I was just recommending this situation to another client of mine who has a 3/2 house in Santa Barbara to sell, and is looking for a replacement property as well. I'm a strong advocate of the seller-rentback situation, because they then know with 100% certainty how much they are netting from the sale of their house. In our current market, the selling prices are lower than many home owners are expecting, so it's nice to eliminate those what-ifs, before pulling the trigger on your replacement property. Renting-back also gives you the time and flexibility to 1) locate the right replacement property and 2) Come from a position of strength while negotiating with no time crunches to rush this important process. In addition, most sellers are not considering offers from buyers that still have a home to sell, so it doesn't leave you with many choices but to sell your home first. As you know, with pets, especially dogs (we have two beagles), finding a good rental that will take dogs and is willing to start at month to month while you look for a home is near impossible.

I would be happy to take a look at your home and 1) Complete a market analysis of your property to give you an accurate picture of its current value and 2) Discuss with you further specific strategies for making your buy/sell transition smooth and more convenient.

Another service that may be helpful for you as you watch the market, or actively search for your replacement property, is our automatic email home finder. With this service we create a custom search in the MLS for you using your specific search criteria. Then, every week, or at a frequency of your choosing all of the new listings that match your criteria will be emailed to you. It's a great way to learn about, or keep up-to-date on the current inventory in our market and gives you a leg-up on other potential buyers who only hear about properties through the newspaper. If you are interested in having me set you up on this service, please let me know. I also can set you up with one of these searches for new comps for the home you are going to be selling, that way you can keep track of what the market is doing in your specific neighborhood.

Please do not hesitate to email me at Daniel@ZiaGroup.com or call me on my cell phone 805-637-7148. I look forward to speaking with you. - Sat Sep 13 2008, 07:42