Nancy Moeller's Blog

Short sales ... why can't it be this simple

Nancy Moeller (Seven Gables Real Estate) — Tue, 17 Nov 2009 19:18:11 -0600

The good news is that 4,706 short sales were closed YTD in Orange County. These homeowner avoided foreclosure, lenders were able to minimize their loses and buyers were able to enter the market.

The distressing news is that 5,759 short sales were canceled, expired and withdrawn in the same period. In other words. That means that over 50% of all short sales attempted this year - failed.

The why is easy ... the process is ridiculous. It usually goes something like this:

First, agents typically under price the property to attract buyers who would otherwise stay away from short sales. Then, dozens of buyers place offers on this and many other properties at the same time. Next, the lenders take months and months to even consider the offers. In the meantime, most of the buyers have moved on to other properties ... except the buyer with the lowest offer. But unfortunately, his offer is 20% below the comparables and the lender says "no".

So then, the agent goes back on the market and tries to get another offer at this possibly, but not guaranteed "approved" price. Then maybe this time, if they are lucky, they'll find a reasonable offer, if the negotiator hasn't closed the file yet, they get the highly coveted approval letter.

Unfortunately, the approval is only good for 30 days and as we all know, it's almost impossible to get a loan closed in 30 days in today's market. So, on Day 28 the buyer's agent sends over an urgent extension request and the negotiator responds that this delay is unacceptable and someone is going to have to pay a per diem for them to even consider an extension.

But remember, the glass is almost half full and despite this process, we are able to get 45% closed.

So, how do we fix it? Based on my inexperience with our current process, here's the easy solution to get about short sale success rate up to 95%.

1. First, the seller submits a standardized hardship financial package to the lender

2. The lender has a negotiator assigned to the property within 7 days

3. The negotiator orders an appraisal and 2 Broker Price Opinions within 7 days

4. The lender evaluates the package and the market value, and gives the homeowner an approved price with a 90 day window to get the property under contract

5. The homeowner hires an experienced Realtor who lists the property as an "approved short sale" that can be closed within the same time frames as a standard or REO sale.

If the answer is "yeah, but ... they don't have the resources" - that's crazy nonsense. This process would save them a fortunate in time, administration, personnel and eventually foreclosure costs.

Have a great week!

Seven Gables Real Estate

License #01727426

www.TheOCExperts.com

www.OCMarketUpdate.com (blog)

Direct: 714 276-7006

Fax: 714 917-2293

"If You Can't Explain it Simply, You Don't Understand It Well Enough"

~ Albert Einstein

Orange County Market Facts

Nancy Moeller (Seven Gables Real Estate) — Tue, 17 Nov 2009 11:08:48 -0600

"If You Can't Explain it Simply, You Don't Understand It Well Enough" ~ Albert Einstein

Every day I read articles, statistics, trends and countless opinions on real estate. In Orange County, the market snapshot and outlook has never been clearer.

Orange County Market Facts

1. Supply has dropped nearly 50% since last year (7,768 properties in the OC)

2. 28% of our supply are short sales and only 22% of active short sales are closing

3. There are only 333 bank owned properties on the market in Orange County, but 444 closed last month, meaning we have only a two week supply of REOs.

4. Interest rates are at artificially low rates and WILL increase

5. Investors are back in the market - both flipping and holding properties

6. Buyers are competing with dozens of other buyers for properties

7. Properties are selling for 98% of list price, and often - much more!

8. More bank owned foreclosures will hit the market

9. There is plenty of pent-up demand to handle more supply

10. It's finally possible to achieve "positive cash flow" on Orange County rentals

In addition, we have tax credits available to both first time and move-up home owners. In short, it's the best time in recent history to purchase real estate.

What to do next: Find a great agent who understands how to beat out the competition, write a winning offer on your behalf and protect your interests throughout the process.

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

License #01727426

www.TheOCExperts.com

www.OCMarketUpdate.com (blog)

Direct: 714 276-7006

Fax: 714 917-2293

Congress has extended and expanded the homebuyer tax credit

Nancy Moeller (Seven Gables Real Estate) — Fri, 06 Nov 2009 13:08:30 -0600

Good news for buyers and the housing market. These changes are effective when the President signs the bill. The credit offers several new features, including a $6500 credit for people who are not "first time" homeowners and a binding contract rule which will take away some of the pressure in April, 2010 when the credits are scheduled to expire. See the chart below for a summary:

Loan Modification Scams

Nancy Moeller (Seven Gables Real Estate) — Tue, 29 Sep 2009 14:07:46 -0500

For homeowners facing foreclosures and considering a loan modification, diligence is key.

This month, the State Bar of California launched a number of investigations into misconduct related to loan modifications. Some unscrupulous attorneys have allegedly taken fees, but failed to perform the services they promised.

According the State Bar of California website, about one-quarter - almost 800 cases - of the active investigations in the Office of Chief Trial Counsel (OTC) are related to foreclosure complaints.

The State Bar has even released the names of 16 attorneys under investigation. The list of attorneys currently under investigation is available at http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395

Be careful out there - many scam artists and others simply out to make a quick buck without the proper expertise, are affiliating with attorneys in order to collect advanced fees and seem more credible to the public.

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

License #01727426

www.TheOCExperts.com

www.ZeroShort.com

Direct: 714 276-7006

Fax: 714 917-2293

7%

Nancy Moeller (Seven Gables Real Estate) — Fri, 18 Sep 2009 14:01:54 -0500

No, I'm not talking about real estate commissions, but rather a great article a friend emailed me this morning and asked me to forward. Since I don't like forwarding email, I thought it best to share in my blog. Here it is:

Written By Regina Brett, 90 years old, of The Plain Dealer, Cleveland, Ohio:

"To celebrate growing older, I once wrote the 45 lessons life taught me. It is the most-requested column I've ever written. My odometer rolled over to 90 in August, so here is the column once more."

1. Life isn't fair, but it's still good.
2. When in doubt, just take the next small step.
3. Life is too short to waste time hating anyone.
4. Your job won't take care of you when you are sick. Your friends and parents will. Stay in touch.
5. Pay off your credit cards every month.
6. You don't have to win every argument. Agree to disagree.
7. Cry with someone. It's more healing than crying alone.
8. It's OK to get angry with God. He can take it.
9. Save for retirement starting with your first paycheck.
10. When it comes to chocolate, resistance is futile.
11. Make peace with your past so it won't screw up the present.
12. It's OK to let your children see you cry.
13. Don't compare your life to others. You have no idea what their journey is all about.
14. If a relationship has to be a secret, you shouldn't be in it.
15. Everything can change in the blink of an eye. But don't worry; God never blinks.
16. Take a deep breath. It calms the mind.
17. Get rid of anything that isn't useful, beautiful or joyful.
18. Whatever doesn't kill you really does make you stronger.
19. It's never too late to have a happy childhood. But the second one is up to you and no one else.
20. When it comes to going after what you love in life, don't take no for an answer.
21. Burn the candles, use the nice sheets, wear the fancy lingerie. Don't save it for a special occasion. Today is special.
22. Over prepare, then go with the flow.
23. Be eccentric now. Don't wait for old age to wear purple.
24. The most important sex organ is the brain.
25. No one is in charge of your happiness but you.
26. Frame every so-called disaster with these words ''In five years, will this matter?".
27. Always choose life.
28. Forgive everyone everything.
29. What other people think of you is none of your business.
30. Time heals almost everything. Give time, time.
31. However good or bad a situation is, it will change.
32. Don't take yourself so seriously. No one else does.
33. Believe in miracles.
34. God loves you because of who God is, not because of anything you did or didn't do.
35. Don't audit life. Show up and make the most of it now.
36. Growing old beats the alternative -- dying young.
37. Your children get only one childhood.
38. All that truly matters in the end is that you loved.
39. Get outside every day. Miracles are waiting everywhere.
40. If we all threw our problems in a pile and saw everyone else's, we'd grab ours back.
41. Envy is a waste of time. You already have all you need.
42. The best is yet to come.
43. No matter how you feel, get up, dress up and show up.
44. Yield.
45. Life isn't tied with a bow, but it's still a gift.

It's estimated 93% won't share this. If you are one of the 7% who will, forward this with the title '7%'.
I'm in the 7%. Remember that I will always share my spoon with you! Friends are the family that we choose for ourselves

Insanity - All or nothing (nothing about real estate in this post)

Nancy Moeller (Seven Gables Real Estate) — Thu, 17 Sep 2009 20:34:44 -0500

I have a personality flaw. Actually, I have many ... but this one I will admit.

I am an "all or nothing" person. In life, like in poker, I find myself either "all in" or "completely out". And when there is an exception to this rule (when I find myself in the middle of in and out) ... I take on incredible stress.

Understanding this personality flaw, I am able to control (control is another personality flaw for another blog) some outcomes.

In work, I'm usually "all in" ... but again, this is not a post about real estate or work ... so enough of that.

This blog is about fitness. Celebrating my 40^th this month reminded me that while I still "feel" 21, my body is most certainly feeling 40.

So for my birthday present to myself, I bought the home fitness series, "Insanity" by Shaun T. What appealed to me when I bought it was that it did not require any equipment - no weights, pull up bar, etc. I also liked the challenging element and intensity of it.

The best surprise so far is that I enjoy the workouts. I'm on Day 17 and haven't missed a beat. I actually look forward to the work out because it's short (about 40 minutes), intense and the stretches are a welcome, relaxing break from the bursts of insanity between them. And because I look forward to them, I'm "all in" and that's a good thing for exercise.

Do I have weight loss or other goals tied to all of this? For a change, no. I decided just to enjoy the process, exercise every day and see what happens.

So why did I write a blog on this topic? Mostly as a testimonial for a great workout series that appeals to someone with an "all or nothing" personality type. Secondly, as a personal commitment to keep it. And lastly, to remind myself that when I feel stress, the root is probably lack of commitment or being in a state of limbo.

Enough of that for now,

Nancy

Multiple Offers – Tips To Compete Against 20 Other Buyers

Nancy Moeller (Seven Gables Real Estate) — Tue, 15 Sep 2009 12:01:56 -0500

With so many properties getting multiple offers in the first few days - many from cash investors, how can a traditional buyer with a conventional or FHA loan compete?

First, be patient and don't get attached to any one house. The chances are you will be outbid.

However, if you want to increase your chances, here are some tips. As REO agents who get a lot of calls, emails and offers on our own listings, these are the things that make a buyer and their agent stand out.

1. Make contact. Ask your agent to make a personal contact with the listing agent. This is not always possible, as many busy REO agents don't return calls or emails, but it's always worth a shot to build rapport and try to gain insight into the number and strength of other offers.

2. Be concise. Ask your agent to prepare a short, concise email with their offer that conveys the following:

a. Amount of offer

b. Pre-approval with a direct lender

c. Buyer has seen house and is committed to the purchase

3. Send a complete package. Put together a complete offer package, typed with the listing agent's information filled out on the forms. Be sure all initials, dates and signatures are complete. Be sure to include your pre-approval letter and proof of funds required to close.

4. Follow up. Be sure to follow up the same day to make sure your offer was received. So many times, email and faxes are unreliable ... not to mention the human element of processing so many offers.

5. Stay in the game. Even if you don't get the property, don't give up. Ask your agent to follow up with the listing agent, just in case it falls out of escrow. Sometimes it's the "last buyer standing" who gets the property when it falls out of the first escrow.

And most importantly, find a good buyer's agent and stick with them. Don't try to work with 20 different listings agents, hoping that will give you an advantage. Ethical listing agents present all offers and the best offer wins. We often submit offers for our buyers on our own REO listings that are beat out by stronger offers. The advantages of working with the listing agent are easily resolved by following the tips in this article. And the advantages of having your own advocate and agent working for you on ALL properties are far too numerous to list in this article.

Good success to you,

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

License #01727426

www.TheOCExperts.com

www.OCMarketUpdate.com (blog)

Direct: 714 276-7006

Fax: 714 917-2293

New FHA Approval Process - Delayed to November 2, 2009

Nancy Moeller (Seven Gables Real Estate) — Sat, 12 Sep 2009 09:21:01 -0500

Delayed until November 2, 2009, FHA is changing the way condo projects will be approved. Under the new rules, there will still be an "FHA Approved" list, however all prior approvals will be invalid unless approved on or after October 1, 2008. For condo projects not on this list, FHA will start from scratch approving a condo by one of the following two methods:

Note: The "Spot Approval" process will be eliminated and replaced by these two methods.

DELRAP (Direct Endorsement Lender Review and Approval Process) gives an Underwriter the power to approve a condo locally. The approved lender provides HOA documentation (CCRs, Budget, HOA Management Company Questionnaire, Insurance, Reserves, etc.). The Underwriter reviews the documents and makes a decision. The lending community is hopeful that this process may be easier than in the past.

HRAP (HUD Review and Approval Process) utilities the same documentation as DELRAP but puts the approval process on HUD (Department of Housing and Urban Development). This may prove to be very time consuming.

Once a unit is approved in the project, we believe the project will be added to the FHA approved list. Going forward, all projects will require recertification every two years.

In order for a project to be approved, the following guidelines (among others) must be met:

1. At least 50% must be owner-occupied
2. No more than 10% can be owned by a single investor
3. No more than 25% of the total floor space can be "commercial"
4. No more than 15% of the units can be more than 30 days behind on their association dues
5. Project must be covered by hazard and liability insurance
6. There must be adequate "reserves" to cover contingencies

If you can't sleep tonight, you can download the entire Mortgage Letter 2009-19 document from the HUD site at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-19ml.doc

Make it a great day!

Seven Gables Real Estate

License #01727426

www.TheOCExperts.com

www.OCMarketUpdate.com (blog)

Direct: 714 276-7006

Fax: 714 917-2293

Sound Investments in Orange County

Nancy Moeller (Seven Gables Real Estate) — Thu, 27 Aug 2009 11:42:17 -0500

Just a few years ago during the "Bigger Fool" era of 2005/2006 ... do-it-yourself investors were picking up condos for $400,000 and renting them for $1,650 a month. We call it the "Bigger Fool" strategy because it only makes sense if some other "Bigger Fool" will pay you more than $400,000 you paid for a bad cash flow deal.

But finally, the numbers work in Orange County and its the reason investors are scooping up all the properties, while the first time homebuyer wonders why they can't get a house despite placing 10 full price offers.

Here's a great example. The Hills complex of Yorba Linda has about a dozen short sale listings. Despite the headache, short sales are a great option for the patient buyer.

The median price for a 2 bedroom condo is $230,000. The median rents for the same condo this year are $1,650. The tax rate is 1.3%, HOA dues are $305. Based on my calculations, this investment not only positive cash flows, but also has a return on investment of 8.1% BEFORE appreciation.

Let's assume a 3% annual appreciation rate ... in 20 years, this investment will be worth $415,406. Not interested in paying taxes on your gain? Keep it, exchange it or move into it for 2 years ... there are many tax savings strategies.

If you've been thinking about investing, it's time.

Seven Gables Real Estate

License #01727426

www.TheOCExperts.com

www.OCBankDeals.com

Direct: 714 276-7006

Fax: 714 917-2293

The bottom of the market can only been sign in the rearview mirror

Nancy Moeller (Seven Gables Real Estate) — Tue, 04 Aug 2009 13:21:39 -0500

As the debate continues whether certain markets in Orange and Riverside counties have "bottomed", the usually gloomy Case-Shiller index reports that home prices have reversed course and that the bottom has passed.

Please find a link to this interesting article http://realtytimes.com/rtpages/20090804_realestateoutlook.htm from Realty Times.

For our clients in Orange County, we maintain that the market under $500,000 has reached a bottom. In Riverside County, we see this level at $350,000 and below. If you are a buyer in these markets, you are likely writting offers on multiple properties, competiting against at least a dozen other buyers and wondering why some people still believe that we're in a "buyer's market" and should expect greater price declines.

Have a great day!

Nancy Moeller, CPA, Real Estate Broker

www.TheOCExperts.com

Seven Gables Real Estate

Todd Direct: 714 404-9540

License #01762788

Nancy Direct: 714 276-7006

License #01727426

For us, this is what it's all about - thank you for the letter Tom and Michelle

Nancy Moeller (Seven Gables Real Estate) — Thu, 25 Jun 2009 09:09:16 -0500

Dear Nancy and Todd,

We wanted to express our thanks for assisting us in finding our new home. Being first-time buyers, we were searching for a realtor who was able to guide us through the process of home buying and financing.

We were initially impressed with your down to earth nature, your knowledge, and honest presentation. Thankfully, Nancy, you were able to put the numbers down on paper, helping us see exactly how much house was right for us. Todd, as we searched for homes, you did not pressure us, nor did you show us homes that were out of our range. You made it a fun experience with your sense of humor and knowledge of the area.

When we finally found our home, you both hit the ground running and acted as our advocate throughout the entire escrow process - even after we moved in and the escrow period was over! As you know, we hit some major bumps in the road during escrow. I am certain that if it wasn't for your perseverance with the lender, escrow company, and homeowner's association, we wouldn't have been able to move in on time - which would have resulted in utter chaos, including putting our belongings in storage and moving into a motel.

We cannot thank you enough for your services. We will happily refer you to everyone we know who is selling or buying a home.

With thanks,

Tom and Michelle Fox

How to Serve Humans

Nancy Moeller (Seven Gables Real Estate) — Wed, 24 Jun 2009 12:16:45 -0500

I can't remember the details of the episode, but I'm often reminded of the title and point of an old Twilight Zone episode titled, "How to Serve Humans". In the story, the main character believes that aliens refer to the manual, "How to Serve Humans" to learn how to be of better service to humans. Later, he understands that the manual is actually a recipe book and he is about to be cooked - literally.

In real estate, we often find ourselves with a similar misconception. While we all believe that our purpose is to be of service to our clients, our industry and our families ... too often, agents and other real estate service providers are just trying to figure out how to cook a deal and sell a house.

Today, I'm sitting another open house for a rental property. We held it open last weekend. I arrived early to place advertisements on cars at the local shopping center to drive traffic to the open house. We advertise it daily and created a website to promote the listing. By the way - if you know anyone in the market for a terrific, upgraded home in Corona, please send them to www.7576WalnutGrove.info ... as of this post we have not found the right tenant for our client.

Here's the point. While our commission will be less than $300, we are giving it as much as much attention as our $1.9 million listing. Why? Because this is a good client who was originally referred to us by another good client. We helped them find this investment property and offered to help them find a tenant. It's really that simple. Our job of serving our client is not over.

At the same time, our team still must reach our goals, focus our attention and support our families. And this means we must sell houses. The key is to balance service with sales. While the idealists among us will argue they are the same, the honest understand the difference.

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

Direct (714) 276-7006

Nancy@TheOCExperts.com

www.TheOCExperts.com for Orange County Real Estate

www.OCBankDeals.com for Orange County Foreclosures

www.ZeroShort.com for options available to avoid foreclosure

New Ad Campaign

Nancy Moeller (Seven Gables Real Estate) — Fri, 19 Jun 2009 09:36:39 -0500

For our clients and friends who urged us to design an ad that did not look like a standard "Realtor Ad", we thank you for your encouragement and hope you like the new concept. Our slogal is "It takes more than a sign in the yard to sell real estate", and as always, we welcome your input. It is scheduled to launch in the community based @In Home Magazine Anaheim Hills / Yorba Linda next month.

Todd and Nancy Moeller

Seven Gables Real Estate

www.TheOCExperts.com

Direct: 714 276-7006

Who exactly is making these insane decisions?

Nancy Moeller (Seven Gables Real Estate) — Sun, 14 Jun 2009 11:16:18 -0500

California - No wonder we're bankrupt ...

In Orange County this morning, there are 410 bank owned properties on the market, 998 in escrow and 675 closed in the last 30 days.

Our buyer clients are making offers at or above list price and competing against an overwhelming wave of demand for foreclosure properties.

In other words, demand is off the charts and we are running out of inventory. So what does California do?

California is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday. The law is another attempt to force lenders to try and modify loans and keep people in their homes. When will government learn that more time creates greater inefficiencies? Now lenders have another 90 days to allow files to gather dust on someone's overworked, underpaid desk.

Seriously, how long should it really take to review someone's income, assets and liabilities to determine if they can afford a modified payment? Minutes, not months.

And if that doesn't work out, how long should it really take to determine an approved short sale price after appraising the property? Minutes, not months.

If we really want to stop foreclosures, give lenders less time, have them order real appraisals (not broker price opinions) and require faster decisions. If a loan modification is not feasible, provide an approved short sale price, and reduce it every 14 days until it sells.

And if we really want to keep people in their homes, lenders should be required to allow investor short sale - lease backs. In this simple strategy, an investor buys the property at current market value and leases it back to the homeowner. This strategy would stop embarrassing evictions, traumatic relocations and family uprooting.

The net result is the same - homeowner loses their home and must rent instead. The process is far more efficient, keeps people in their homes, creates a more attractive scenario for investors likely willing to pay a premium for the property with no vacancy or tenant placement expenses.

For too long we have been approaching the problem with band aids, instead of looking at the big pictures and implementing a clear, efficient process that looks at the end of the problem, instead of the middle.

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

www.TheOCExperts.com

www.ZeroShort.com

www.OCBankDeals.com

Direct: 714 276-7006

A False Bottom? Nope - It's Real

Nancy Moeller (Seven Gables Real Estate) — Sat, 06 Jun 2009 10:16:31 -0500

For homes under $500,000 in Orange County, we have experienced a market shift. Demand is up 45% over last year and at levels not seen since 2005, supply is shrinking and buyers are competing for the same properties. In addition, interest rates are low, tax credits are still in place and prices seem to be stabilizing as multiple offers are creating a 98 - 100% ratios of sold price to list price. In short, it appears we are hovering at the market bottom in this price range.

But is the bottom real? Some industry professionals believe we're experiencing a false bottom. They expect a new wave of foreclosures that will once again force prices to spiral further downward. We don't agree.

Yes, we can expect a wave of new foreclosures - probably several waves throughout 2009 and 2010. However, we say - bring it on! Unlike 2008, we have the demand to quickly absorb this inventory. As an industry, we define demand as either properties sold or properties entering escrow. However, this is merely a snapshot of historical demand, and further, only represents the small portion of buyers who were successful with their offers.

Real, current demand is nearly impossible to quantify, but is what we call "pent up demand". These are the buyers that have been sitting on the fence and are now in bidding wars, trying to buy a property in Orange County. To date, they are been unsuccessful. With less than a three week supply of foreclosure inventory, there is not enough supply to absorb the pent up demand. They will either continue trying or sit back on the fence waiting for more inventory and less competition.

When the new wave of foreclosures hit the market, we should expect to see a demand increase even higher as "pent up demand" translates to trackable demand and more sales. Can we provide quantitative support of our "pent up" demand theory? Only from the trenches. As listing agents, our bank owned properties get an average of 16 offers each. As buyers agents, our averages are better, but only because we provide our clients the right information to make strong offers that get to the top of the stack.

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

Direct (714) 276-7006