Archive for January, 2009
CAR REPORTS DECEMBER SALES UP 84.9% AND PRICES DOWN 41.5%
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
The California Association of Realtors (CAR) reported a strong increase in the number of homes sold year-to-year for December 2008. Reasons cited for the dramatic increase were higher loan limits for high-cost areas, lower prices and lower interest rates. More than 544,000 homes closed escrow in December alone.
The median price statewide has dropped to $281,100 which represents a 41.5% decline from December 2007 when the median price was $480,820. Redding’s median price was reportedly $190,000 as per the local newspaper. The median price for Redding hovered around $300,000 at the peak of the market in fall of 2005.
Overall, the median price dropped 38% in 2008 in California. Home prices are likely to continue to fall until distressed properties work their way through the system, according to CAR economist Leslie Appleton-Young.
The good news is the lower prices “have brought the cost of housing more in line with household income” she said. The other positive news is the huge drop in unsold inventory. Currently, California has a 5.6 months supply compared to 13.4 months a year ago.
Interest rates have declined from 6.1% in December 2007 to 5.29% in December 2008 for a 30-year fixed rate loan. One other interesting factoid is 5 of 338 statistical areas in California actually saw a median price increase compared to a year ago. Who’d a thunk!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
OBAMA DELIVERS LATE CHRISTMAS GIFT TO HOMEBUYERS
HOME LOANS, INDUSTRY NEWS, REAL ESTATE LEGISLATION, TIPS FOR BUYERS
HR 1, just passed by the House of Representatives, includes a provision to eliminate the existing payback requirement for the first-time buyer tax credit for qualified homebuyers. If you have read my previous posts on this topic, I relayed the fact that the credit must be paid back over 15 years. Now, President Obama is deleting the repayment requirement, but only for homes purchased between December 31, 2008 and July of 2009.
Homebuyers should check with their tax preparer for details and income limits. I would like to see the payback requirement extended to those buyers that helped the housing market by buying a home in 2008. It took guts to buy when your family and friends were telling you “you’re crazy!”
The terms of the tax credit already stipulate that if you take advantage of the credit and sell at a later date with no profit, repayment is not required.
Realtors are pushing for more incentives to kick-start the housing market which we believe is key to getting our economy back on track. The bill also extends higher loan limits for certain high cost areas across the country. This will allow buyers to secure loans at lower interest rates since “jumbo” loans have higher interest rates. Next week the bill be reviewed by the Senate.
Please contact me if you have any questions.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
DON’T DELAY THE DIGITAL AGE
There’s talk of delaying the analog to digital TV signal conversion date from mid-February to June. Don’t do it! I’m sick and tired of the rolling banners on my TV screen, non-stop commercials, the nightly news stories, etc that have been blasting over the airwaves for what seems like years now alerting the public to the need for action.
When the TV stations flip the switch and viewers that have procrastinated only see Arabian sand fights, I guarantee you they will get their couch potato butts up and go buy the converter box. Putting it off for several months will only prolong the agony and the rest of us will have to endure more repeat stories about what you need to do when to be ready. The media has done an overkill 
getting the word out and if it hasn’t registered with viewers relying on rabbit ears, it never will. Let’s get on with it and put this behind us. Thank you!
bradgreps@yahoo.comBRAD GARBUTT
REAL ESTATE PROFESSIONALS GMAC
REALTOR/BROKER ASSOCIATE
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
CALIFORNIA’S WATER WOES SELF-INFLICTED
REDDING LIFESTYLES, SHASTA COUNTY
A year ago, I attended a business conference at a new Palm Desert golf resort near Palm Springs. We were offered a new Villa in a just opened section of the Hyatt Grand Champions Resort and Spa. When I hopped in the shower, I couldn’t believe the flood of water from the shower heads. I thought to myself, what a waste of water and energy to pump, clean and heat it! This is a desert, right?
When I questioned the wisdom of wasting so much water, 
locals explained the Coachella Valley sits atop a huge aquifer. Despite limited rainfall, there’s plenty of water to turn this desert a lush green. While I utilize low-flow water saving devices at my home in Redding, this place was using water as if it will never run dry.
A month later another convention brought us to Las Vegas. We stayed at the Wynn and again, I nearly drowned in the shower. Ironically, the local news was reporting that Lake Mead could be empty in less than 10 years if the drought continued. No mention of conservation efforts in the TV story.
My brother lived near downtown Sacramento in the 1980’s and I was surprised to hear he paid a flat rate for water service. No meter, all you can use for one low monthly fee. How wasteful! Especially since I lived in Redding, near the source of a major portion of California’s water supply, and my water was metered and charged accordingly.
Despite the availability of drip and sub-irrigation systems, farmers continue to flood irrigate farm land losing much to evaporation. Pumps along the Sacramento River and Delta have impacted fish populations. Levees have altered the natural delta environment drastically. Salt water from the San Fransisco Bay is threatening to encroach on freshwater regions of the delta and the diversion point of the California Aqueduct. Socal receives 30% of their water supply from the Sacramento Delta. The once squashed idea of a peripheral canal is being urgently discussed.
Water managers are about to hear some very bad news about water availability for this summer due to a dry winter in this portion of California. Cities, farmers, endangered species advocates, anglers and SoCal water customers will all be fighting for what will be a greatly curtailed water allocation. Unless a rain event of Biblical proportions blesses the Northstate in the next few months, prepare for some tough decisions by all who utilize water for life and livelihood.
530-224-6767 OR 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
MORE BORROWERS BEING REJECTED FOR LOANS
HOME LOANS, TIPS FOR BUYERS, TIPS FOR SELLERS
For many months I have blogged about the need for homeowners and buyers to get their financial house in order before applying for a loan or refinance. An article in Friday’s Washington Post cited anecdotal evidence that the rate of turn-downs has increased significantly from the last refi boom. In response, increasing numbers of borrowers are applying to more than one lender simultaneously. According to the article written by Dina Elboghdady only about half of the borrowers applying for a loan are being approved.
In response, she states “a growing number of borrowers are applying to more than one lender to increase chances of getting approved for refinancing.” The surge in refinancing has been ignited by falling interest rates. In previous refi booms, 60-70% of borrowers were approved. Rates for a 30-year fixed rate loan average 4.96%, down from 5.96% a year ago.
The obstacles for borrowers are poor credit scores, lack of sufficient equity and tightened loan underwriting standards. In fact, according to the article, a recent study by Inside Mortgage Finance found that loans sold to Fannie Mae had an average credit score of 748 out of a possible 850.
This strategy employed by borrowers is referred to as “double-apping” according to Christopher Cruise of GOTeHomeLoans.com. Lenders usually discover this when they pull the buyers credit report and see a credit inquiry from a competitor. Lenders frown upon this practice because they diligently process the loan only to find out later the client secured financing from someone else. Adding insult to injury, the lender loses money “when they lose a loan they have already locked in with investors.”
Lenders are trying to regain control by charging upfront application fees to discourage borrowers from jumping ship. These fees can be as high as $500 and some tack on an appraisal fee from $350-$450. Borrowers are pitting lenders against each other to negotiate the lowest rate and fees possible. This is overwhelming lenders that lost loan processors due to layoffs during the slowdown the last couple of years.
Search my past posts for tips to improve your credit if you are considering a purchase or refinance. Or better yet, email or give me a call. I’m here to help!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
REAL ESTATE COMMISSIONER WARNS OF “OPPORTUNISTIC PREDATORS”
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR SELLERS
Jeff Davi, California’s Department of Real Estate (DRE) Commissioner wants homeowners experiencing tough financial times to not “jump at the first opportunity for a financial remedy” out of desperation. He cautions that there are many predators who “are looking to take advantage” of homeowners that have suffered a job loss or other personal circumstances that have not allowed them to keep up their mortgage payments.
His department is receiving many complaints from homeowners that are falling victim of false promises of foreclosure avoidance. He wants the public to be aware of the following:
- Once a Notice of Default (NOD) has been recorded against a property, it is generally illegal to charge an advance fee or require payment to assist with a loan modification or workout
- If a NOD has not been recorded, then a California real estate licensee can collect an advance fee only if you are give an “advance fee agreement” which has been reviewed and approved by the DRE
- DO NOT PAY a fee to someone that knocks on your door, solicits you by mail or contacts you by phone offering to negotiate with your lender on your behalf. First go to DRE’s website www.dre.ca.gov to confirm the person or company you are in contact with is approved for such services and is properly licensed and their advance fee agreement has been reviewed and approved by DRE
- If you determine they are not licensed or their advance fee agreement has not been approved or if they are not lawyers offering legal services, do not give them money, look elsewhere or consider hiring an attorney
Jeff concludes by quoting the old adage-if the offer sounds too good to be true, it probably is!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
NEW LAW REQUIRES FORECLOSED HOMES BE MAINTAINED
SB 1137 addresses issues involved when anyone forecloses on a home. If a property is vacant, the exterior must be maintained or face a fine of $1,000 per day. The property owner must be given 30-days notice and an opportunity to remedy the situation before the fine can be imposed.
Maintenance includes not permitting excessive foilage growth, not allowing trespassers or squatters and preventing mosquito larvae from growing in standing water. Last year, Redding considered drafting a similar ordinance but ultimately refrained from passing a redundant law.
SB 1137 also requires any property owner who acquires a property through foreclosure give a 60-day notice to vacate before a tenant can be forced to leave. Areas with rent control or Section 8 tenants may require longer notice periods.
This bill also requires all lenders who foreclose on loans made between 2003 and 2008 contact the borrower by phone or in person at least 30 days prior to filing a Notice of Default. The lender must also assess the borrowers financial situation and explore options for avoiding foreclosure. Borrowers must also be advised that they have the right to ask for a meeting in person within 14 days of contact and be provided a toll free number for a HUD certified credit counseling agency.
Please contact me with any questions:
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
WATER WELLS SHOULD BE TESTED FREQUENTLY
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
Representatives from Basic Laboratory in Redding addressed Realtors regarding their water testing 
services. Real estate agents are concerned new statewide septic regulations that require private well owners test their wells regularly will create added expense and disclosure issues for sellers.
Basic Lab has several types of tests packaged for saving their customers money. They include:
- Total coliform and E. coli ($35)
- Private Well Toxicity Panel ($200) includes above along with turbidity and 14 other contaminants
- Drinking Water Testing ($550) all above plus more minerals and inorganic chemicals
The only way to know if your water is 100% safe is to spend nearly $2000 for every available test. For most situations, a bacteria test is the most common test and the more thorough test is reserved for areas that are known to have groundwater contamination.
The Igo-Ono area has a high incidence of sulfur and hydrogen sulfide in their groundwater-think rotten egg smell. Some areas of Trinity County have problems with contaminants from past mining activities. Siskiyou County has areas where high levels of arsenic are found in groundwater. High iron levels is also a problem for many wells in Northern California. All of these problems can be addressed with filtration treatment systems.
Only two local companies are recommended for well inspections/testing:
- CR Water Treatment (State certified for site inspections and water treatment) 238-2336
- J&J Pump (site inspections and pump services) 222-3393
Basic Laboratory also offers a service for an additional fee ($50-$75) to visit your property and take a water sample. Otherwise, property owners will need to pick up sterile water bottles and instructions at their Railroad Avenue location in Redding. Health department officials recommend property owners test their wells twice-a-year for bacteria.
New septic regulations (AB 885) that will be implemented in 2010 requires property owners thoroughly test their water well every 5 years and inspect their septic systems. The estimated cost is $350 each. Basic Laboratory does not know exactly what the required test will entail as regulations are under final review.
For further information, visit their website at www.basiclab.com
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
OBAMA BUMP WRONG WAY
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
Interest rates spiked upward slightly on Inauguration Day as President Obama took the oath of office. Many of my clients had hoped the changing of the guard would push mortgage interest rates lower. Rates were hovering at or below 5% for a 30-year fixed rate loan. Today, the best rate was 5% and went on up from there, depending on other factors:
- credit score-best rates reserved for credit scores above 720
- equity/downpayment-lowest rates for buyers with 20% down or refi’s with at least 20% equity
- verifiable income-stated income loans are out there but only for the top credit scores (around 800)
The financial markets are still trying to size up the amount and number of properties and borrowers in distress. Further exacerbating the problem are gun shy appraisers who are being overly conservative on values. There are rumors that lenders are holding back on selling homes they have taken back in foreclosure because the market is already saturated with a large number of REO properties listed for sale. Banks don’t want to flood the market with these properties fearing the adverse effect that would have on property values of surrounding homes. Sounds like we are in a vicious cycle that will be difficult to break.
Lenders I’ve spoken with have said the biggest challenge facing buyers and homeowners today hoping to refinance is lack of funds for a downpayment or equity, respectively. FHA financing is an option for borrowers with limited cash reserves for purchasing a home. Refinancing without the necessary equity will result in the borrower paying a higher interest rate/fees or being turned down for a loan.
530-224-6767 or530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
FORECLOSURE ACTIVITY SEES TEMPORARY LULL
HOME LOANS, INDUSTRY NEWS, TIPS FOR SELLERS
A California law requiring mortgage lenders to give their customers 30 days notice before filing a Notice of Default (NOD) served to only delay the inevitable for many cash strapped homeowners. The law was intended to give homeowners more time to resolve loan modification requests before foreclosure is initiated by their lenders.
The law took effect in September, and Riverside County saw the number of NOD’s plummet by half in that month, only to surge again in November and December. The law was modeled after similar laws in Maryland and Massachusetts but has only postponed the pain by a couple of months. Overall, the law is a failure to help homeowners save their homes.
The loan modification process is stymied by lenders unwillingness to reduce the amount owed on mortgages. Even if a lender agrees to reduce the interest rate or lengthen the term, most borrowers can not afford a loan that was inflated to cover loan fees and closing costs. Additionally, the destabilizing affects of foreclosures on home prices has left many homeowners with mortgage balances much higher than the current market value of their home.
In order for the housing market to stabilize, in my opinion, loan modifications affordable to borrowers over the long haul must be granted to stem the never ending tide of foreclosures.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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Our Customer Satisfaction Rating, based on an independent survey, exceeds 97%. This is reflected in our 2008 "QUIE" Award recognizing the TOP 10 REAL ESTATE COMPANIES in NORTH AMERICA! REP/GMAC in #2.
