Archive for February, 2009
Going To Mexico-Leave Home Without It!
My real estate company held their annual convention on a cruise ship that 
stopped in Mexico and Belize. In Cozumel, my wife and I rented a scooter to tour around the island. I paid cash for the rental but the operator wanted to scan my credit card to cover any damages that might happen if we wrecked. I didn’t see this as a problem especially since the credit slip with the imprint of my card was returned to me after we returned the scooter undamaged.This was the only time I used the credit card on this trip while out of the country.
Today I got a call from my credit card company asking if I purchased building supplies in Mexico. They were suspicious of the charges and called me for verification. I told them these were fraudulent charges and they reversed them immediately. A new credit card is being issued. No harm done!
Government officials are warning Americans against visiting Mexico. Robberies and kidnappings are on the rise. This experience is just one more reason to find somewhere else to vacation. If you are going anyway, leave the credit cards at home and pay cash. Sorry Carl Malden!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
CalRedd Unveiled
INDUSTRY NEWS, REAL ESTATE PRACTICE, SHASTA COUNTY
At first glance, you might think CalRedd has something to do with California and Redding. You would be half right! CalRedd is the acronym for the new California statewide MLS (Multiple Listing Service) system under development. It stands for California Real Estate Dynamic Data.
For nearly 10 years, the California Association of Realtors (CAR)has been grappling with a problem regarding data sharing between real estate practitioners within tight geographic market areas. It was not unusual for agents in major metropolitan areas to join 3 or more MLS services to acquire all the property data within their chosen market area. In some cases, each MLS used different software and had different rules regarding access and usage of that data.
Locally, their has been a problem with an isolationist attitude among agents in neighboring counties. Siskiyou County, for example, has refused to cooperate with Shasta County agents when it comes to sharing listing information. Their fear: if they gave us their information, agents from Redding would drive up to Siskiyou County and sell their properties, potentially denying local agents the opportunity to represent the buyer. Heaven forbid!
The walls are coming down and most agents across California see the benefit of having a single data base with all the property information in one place. One set of rules for usage, one software program to learn and no more barriers to obtaining information on any property listed for sale anywhere in California. After all, when you are granted a real estate license it says California, not Shasta County!
Practically speaking, most agents and their brokers do not want to list or sell property outside their area of expertise. It’s a simple risk management issue. However, agents would at least like the ability to access these listings on behalf of their clients to answer questions about what is available in another area of the state. The agent can provide the client detailed data and possibly make a referral to an agent outside their market area.
The upside for sellers utilizing the services of a real estate agent is enhanced tremendously. Not only will the agents within the area a home is listed have the listing information on the property, now hundreds of thousands of licensees statewide will be able to expose the seller’s property to their clients. In Shasta County, the 500-600 agents currently able to access listing data will be expanded to several hundred thousand agents (there are more than 500,000 individuals licensed statewide but only 300,000-400,000 are actively practicing).
Rocklin-based Concentric has been awarded the contract to develop the software that will drive the statewide MLS. Two representatives demonstrated the software for agents at the Shasta Association of Realtors office Thursday. 72 of California’s 117 MLS’s have signed a Letter of Intent to participate in the new statewide MLS according to Scott Kucirek , a CAR staff member charged with implementing the statewide MLS.
Initially, many MLS’s will retain their existing software vendor and run the CalRedd software parallel. If a majority of MLS’s across California adopt CalRedd and agents like the system, eventually Cal Redd may replace the individual MLS’s with one universal system.
Other states across the country are following our progress closely because they may want to take California’s lead and implement a statewide MLS of their own. This has been a long time coming and politics have slowed the progress. Agents will have to change their entrenched ways of doing business and adjust to sharing their data with fellow agents.
Chico, Paradise and Oroville merged their MLS’s a couple years back and comments I’ve heard from agents in those areas have all been positive. Many fears of dissenters were unfounded. The bottom line was enhanced exposure of listings that ultimately benefited the clients of real estate professionals.
Many early adopters wish to be the first on board with the new system but it may take several years before it’s known if the new system will be embraced by all associations in California. The success of CalRedd will hinge on acceptance by all MLS’s within the state.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Local Lender Warns of Credit Tightening
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
A reputable local mortgage broker noted in a recent email that he is finding that many of the banks he brokers loans to are bumping the minimum credit score upward. This would not be a big deal except more Shasta County residents already have credit scores below the national average.
He cites as an example that 25% of the nation’s population has a credit score at or below 620, the new bottom number for borrowers seeking loan approval. For Shasta County, his experience indicates roughly 35% of the people he sees have credit scores at or below this threshold.
The bottom line recommendation: buyers on the fence with credit scores in this realm get off the fence and buy before credit tightens further! Considering the large supply of available homes and interest rates hovering around 5%, now may be the last chance for many buyers to qualify unless they take action to significantly improve their credit score or offset the new underwriting limitations by making a larger downpayment.
One bit of positive news is FHA loan limits have once again been raised to $417,000. This will aid buyers wishing to make a minimal downpayment of about 3.5% with lenient underwriting.
Contact me for details.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Major Banks Halt Foreclosures
HOME LOANS, INDUSTRY NEWS, TIPS FOR SELLERS
In response to the Obama administration developing a plan to aid the ailing 
housing industry, several lenders announced a temporary suspension in foreclosure actions. Specifically:
- Fannie Mae and Freddie Mac is suspending all foreclosure sales and evictions for occupied properties
- Citigroup Inc. is expanding its halt to foreclosures it started in November 2008
- JP Morgan Chase and Bank of America will halt foreclosures until March 6
More than 2.3 million homeowners faced foreclosure actions in 2008. These temporary suspensions of foreclosures primarily apply to owner-occupied homes and not those properties owned by investors.
Lenders are waiting for details on how the $50 billion Obama has set aside to prevent foreclosures will be spent. Fannie and Freddie have already devised plans to determine which loans should be modified and which should be foreclosed upon. It appears the government and banks wish to help those that bought a home they could afford but got stuck with a bad loan.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Local Business Offers Extraordinary Service
REDDING LIFESTYLES, SHASTA COUNTY
Everyone, sooner or later, finds themselves taking their vehicle somewhere 
to have body repairs completed. Over the years, I have used several different body shops (or panel beaters as they are known in Britain), but last week I had an exceptionally good experience.
My wife’s car was hit while parked in our office parking lot and fortunately the other vehicle owner’s husband immediately contacted her to report the accident. Armed with the insurance information we were ready to start the process of selecting a body shop.
My last experience at a dealer’s body shop in West Redding was good, but they have since moved to the far east end of town near the airport. I asked for a referral from a friend who had his high end sports car repaired recently. He was happy with their work so I stopped by for an estimate.
The estimator at Blvd Auto Body promptly and professionally worked up an estimate. I learned they were on the preferred list of the insurance company that was paying the claim. They spoke with the insurance agent and arranged for a loaner car and ordered the part. Upon dropping the car off they indicated it would be few days to complete the work. Less than 24-hours later my wife got a call- the car was ready for pick-up! We were both amazed they completed the job so quickly.
Upon picking up the car, I inspected the work and was impressed the new bumper was color matched perfectly and I could see they took the time to realign the fenders and hood with the new bumper. What a surprise!
They followed up with a nice thank you card and we were left with a very favorable impression of their professional customer service. They under-promised and over-delivered. I have found this level of service a rarity in Redding. They have certainly earned my trust and respect.
A couple days later, I gave them another opportunity to show me their stuff. My old Land Cruiser was damaged when I closed the garage door on the open rear hatch. The plastic nameplate was scratched and I had ordered the part years ago but never had it installed. They said it could be done for a minimal charge of $60, the cost of one hour labor. Again, they completed the job promptly and the bill was almost half the estimate. They could have charged the quoted amount and I would have paid it, but again, they delivered the promised service at a lower cost. How refreshing!
Although I hope I never need their services again, but know if I do, they will get the job! From one that strives to deliver exceptional service to my customers, congrats on a job well done!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
CALIFORNIANS SCAMMED BY PROPERTY ID MAY GET NOTHING
Last summer, HUD settled a lawsuit with Realogy and Property Id regarding
an unlawful kickback scheme that lined the pockets of real estate corporations with millions of dollars bilked from more than 300,000 home sellers in California. Now, it appears Property ID will be insolvent if they paid the judgement. Realogy and Property ID have maintained all along they did nothing wrong.
This could mean the clients of the real estate firms involved who recommended purchasing the overpriced Natural Hazard Disclosure reports through Property ID will receive little or nothing. The settlement required a refund of the report cost of either $100 or $114 for the Natural Hazard Disclosure reports. The attorneys representing more than 40,000 claimants in the class action suit stand to pocket nearly $10 million in attorney fees.
Terms of the HUD settlement required Property ID to disclose the addresses of the victims but not their names. The settlement administrator had to do some detective work to track down the victims. Too bad Property ID was not more forthcoming with all the information to aid locating those duped in this scam. The attorneys have used print ads in 130 newspapers and mailings in attempts to track down more than 330,000 Californians who bought the reports. Thus far only 42,566 have filed claims. They guesstimate about 77% of California homeowners have been reached by the campaign. The deadline for filing a claim is only a few weeks away.
Property ID used $50 of the report fee to cover expenses and split the remaining $50 profit with referring brokers, according to a report in Inman News dated Feb. 12,2009. The real estate companies involved in the kickback scheme include Coldwell Banker, Prudential California Realty,ERA, RE/MAX and Century 21.
Locally, firms under these names have denied any involvement. This could easily be verified if Property ID or Realogy made the addresses available to the public. Some of these franchisees are independently owned and operated.
“The settlement would require Realogy, the “deeply indebted” parent company of Coldwell Banker, Century 21 and ERA Real Estate, to pay $21 million to reimburse clients who purchased Property ID natural hazard disclosure reports between July 31,1996 and June 30, 2006″ according to Matt Carter, writer for Inman News. Perhaps Realogy will follow Property ID’s lead and claim this will make their debt laden company insolvent.
Thus far, the settlement favors the attorneys that brought the class action suit and with Property Id’s inability to pay it’s share, less than $30 million is available for reimbursing victims.
The settlement, as it currently stands, requires:
- Realogy pay $27 million
- Prudential California Realty pay $4.34 million
- RE/Max pay $498,474
- Property ID pay $7.5 million
According to the Inman News article, the attorneys are entitled to 25% of the settlement for fees and expenses. Any unclaimed funds, which will be substantial, will revert to the defendants or their insurance companies, based on the small percentage of victims that have filed for claims. I guess crime does pay!
This legal mess is likely to continue for years because some potential claimants may appeal and other victims not part of the class action may pursue separate litigation against the companies involved. This could hold up the settlement for quite some time. Stay tuned for updates as this drags on.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Fannie/Freddie Deliver Unwelcome News
HOME LOANS, INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
Politicians agree that solving the housing crisis is key to turning the economy of our country around, yet the top two government sponsored enterprises (GSE’s) announced guidelines that penalize all but the most creditworthy and cash flush borrowers. Whether you are a home buyer, seller, real estate agent or lender, the new rules will impact your bottom line.
Since these GSE’s set the rules for loans they will buy from lenders, these rules will immediately impact consumers, potentially dulling the effectiveness of President Obama’s stimulus bill just passed by Congress. The tightened underwriting guidelines will ultimately exclude thousands from realizing the dream of home ownership.
In a nutshell, here are the changes according to a recent article in SFgate.com:
- Interest rates will be higher for those that tender less than a 30% down payment ( The previous threshold was 20%)
- Borrowers with credit scores below 740, will face higher up front fees. A credit score of 739 will mean an extra 1/4 point, 700-720 score-add 3/4 point, 699 score will pay a 1.5 point “delivery fee”.
- Duplex buyers will face a 1% flat fee add-on, even if they occupy one unit and have a credit score over 800 and put 50% down.
- Cash out refinances could see up to 3 points added to the loan cost if their equity is “modest” and have “low” credit scores.
- Condo buyers will face an automatic 3/4 point add-on penalty if they can’t make a down payment of 25% or more, even if they have a top-notch credit score over 800.
A point is 1% of the loan amount. One point works out to $2,000 on a $200,000 loan. Major lenders are already adjusting their fees upward to reflect the additional costs charged by Fannie/Freddie. Reasons cited for the higher fees are to offset higher risks resulting from low credit scores or skinny equity.
Ironically, just a few months ago, credit scores over 680 were considered good. Credit scores over 740 were excellent. Borrowers with scores over 800 were automatically approved with limited or no documentation. Now, the rules are changing. The main reason these changes are being implemented is due to government take over of Fannie Mae and Freddie Mac last September. For years, GSE’s management answered to no one.
These new rules target certain loan products that “default at four to eight times” the rate of other loans. However, these fees are an example of one branch of government’s belt-tightening undermining the efforts of another trying to kick-start the housing industry.
In my opinion, lax oversight of GSE”s is to blame for the entire collapse of the financial markets. Had CEO’s at Fannie Mae not cooked the books in 2002-2003 (misstating a profit of $10 billion), to assure themselves multi-million dollar bonuses, The Department of Treasury would not have stepped in, freezing their operations until the true status of their operating profits were ascertained, which created a vacuum in the money supply for home mortgages, which was quickly filled by Wall Street’s way of doing business-easy loans with risky terms for anyone who could fog a mirror, then, when Fannie Mae was allowed to get back to the task of buying mortgage-backed securities, they were forced to buy up unsavory toxic mortgages that were financed by Wall Street investment funds, which were then repackaged and sold around the world. Whew! What a Mess!
Now these GSE’s are determined to tighten the noose around the necks of borrowers that wish to aid the recovery by buying a home or home owners that want to refinance out of a loan they never should have been offered had the GSE’s been minding their p’s and q’s all along.
Now, I will step off my soap box!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
VACANT COMMERCIAL SPACE NEARS 1 MILLION SQUARE FEET IN REDDING
Kent Dagg addressed Realtors Wednesday morning regarding construction projects in
the area served by the Shasta Builders Exchange. Due to an excess of vacant commercial space(over 900,000 sq ft) in Shasta County, contractors have switched gears bidding and building infrastructure projects. Approximately 2500 plans were put out to bid the past few years and this year is no different. More than 190 projects were put out to bid in January.
Only 27 members out of 850 have dropped out of the builders exchange. Some contractors have merged with one another, others have retired and some are bidding on projects out of their prefered geographic area. Others have moved to Texas where work is more abundant.
Kent is hopeful some of the stimulus package funds will filter down to Redding. Redding city officials have targeted funds to improve the Oasis Road area as one of their top priorities. A portion of the funds will be used for street overlays. The developer of the commercial retail center planned for Oasis Road will have to foot the bill for most of the I-5 interchange improvements which are estimated at more than $30 million.
One benefit of the construction slowdown is more contractors bidding on projects which usually results in lower winning bids for the entities soliciting work. Some contractors are expanding the types of construction projects they will bid on to secure work for their firms. Kent cited Guiton Pools as an example-their firm just completed a wall along Hwy 299 in the Round Mountain area.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
OBAMA BUMPS BUYER TAX CREDIT TO $8000
HOME LOANS, INDUSTRY NEWS, REAL ESTATE LEGISLATION, SHASTA COUNTY, TIPS FOR BUYERS
First-time buyers that buy a home during 2009 may qualify for a tax credit 
of up to $8000 or 10% of the selling price, whichever is less. The tax credit, which is much better than a tax deduction, will not need to be repaid if the buyer stays in the home for more than 3 years. Last year, President Bush’s stimulus package contained a $7,500 tax credit that required repayment over 15 years.
Check with your tax adviser for details as there are income limitations and repayment obligations if you sell the home in the short term. The stimulus bill also raises loan limits which could help buyers in high cost areas.
More details should be available soon as the 1100 page bill is reviewed by analysts. Interest rates have dropped back to the 5% level according to local lenders that reported at yesterday’s Shasta MLS meeting. Also, investors can now have up to 10 loans out on investment properties, up from 5 under previous underwriting guidelines.
Locally, sales and inventory remain steady with 1520 homes listed for sale and more than 320 homes pending. Nearly 50% of home buyers in 2009 are expected to be first-time buyers. Investor/speculators will be the next largest group, followed closely by single women. Estimates place the sales volume for 2009 at over 5 million units nationwide. Less than 10% of the units sold will be new homes, according to industry experts.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
REDDING HOME SALES IN JANUARY ON PAR BUT PRICES STILL FALLING
SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
108 homes sold in the area served by the Shasta MLS including 54 in Redding during the month of January. The units sold is on par with January 2008 when 107 homes sold. However, the average price and average cost per square foot continues to slip.
All but 12 of the homes that sold in January 2009 were priced below $350,000. Only one home sold above the $550,000 price point. According to a local appraiser, the average cost per square foot for a home in Redding is $138.44. The average price was reported to be $244,803. The median price, as per the local paper, is closer to $190,000.
The average price per square foot for Redding in the last quarter of 2008 was $148.16. Unfortunately for home sellers, January numbers indicate an acceleration of price erosion. Home owners need to take this into account when pricing their homes for sale or estimating value for refinancing. The average home size is about 1768 square feet.
Bad news for sellers is good news for home buyers. Lower home prices and interest rates combine to make the dream of home ownership a reality for many buyers frozen out of the market during the recent market bubble. Many buyers are reluctant to jump off the fence due to concerns of not being approved for a mortgage in a tighter lending environment and falling home values.
The stimulus package being hammered out by Congress may provide some relief if stemming the tide of foreclosures is adequately addressed. Otherwise, expect more price declines as banks unload properties they have taken back in foreclosure.
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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