Todd & Lisa Sheppard
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Archive for May 2011

How To Make An Offer That Will Be Accepted

May 31st, 2011   by lisasheppard

You have finally found the house of your dreams. It is priced right and is receiving a lot of attention from other buyers. You don™t want to miss this opportunity so you are ready to put in an offer with the real estate agent immediately. What can you do to guarantee your offer is the one accepted? Financially, offers can be broken down into three categories:

1.) An All-Cash Offer

Obviously, a cash purchaser is always favored by any seller. In today™s real estate market, an all-cash offer is even more enticing. Last month, one in four real estate transactions were impacted by a low appraisal. An all-cash buyer eliminates the need for the bank appraisal.

2.) A Non-Contingency Offer

If you don™t have the cash reserves for an all-cash purchase, the next best thing would be to make a non-contingency offer. To do this you should be already pre-approved for a mortgage and have your current house already in contract. This gives the seller the confidence that you are already a qualified buyer who will be able to complete the purchase.

3.) A Contingency Offer

Some buyers start the process of looking for a new home before their current home is sold. This could be a big mistake. If you find the home you were hoping for (perfect for your family AND priced right), it will be very difficult to get your offer accepted because you are not actually qualified to buy.Asking a seller to wait for your home to sell is somewhat unreasonable in today™s environment. One of the reasons you would want the home is because the seller priced the home at a value to sell it NOW. They want to know it is sold when they accept an offer. They normally will not even entertain a contingency offer.  

Bottom Line

Unless you have the ability to purchase with cash, the best thing to do is to be pre-approved for a mortgage and have your current house already in contract before looking for the home of your dreams. That guarantees you will get the home you love at a price that makes sense.

Why You Need A True Professional To Sell Your Home

May 27th, 2011   by lisasheppard

Many people ask me whether they should hire an agent to sell their home or whether they should first try as a For Sale by Owner (FSBO). In today™s volatile market,  I believe this is an easy decision: you need an experienced professional!

You need an expert guide if you are traveling a dangerous path

The  field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a buyer willing to pay fair market value for your home at a time that there are mass inventories of foreclosures and short sales will take a true real estate professional. Finding reasonable financing can also be tricky in today™s lending environment.

You need a skilled negotiator

In  today™s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way “ from the original offer, to the possible re-negotiation of that off after a home inspection, to the possible cancellation of the deal based on a troubled appraisal “ you need someone who can keep the deal together until it closes.Realize that when an agent is negotiating their commission with you, they are negotiating their own  salary; the salary that keeps a roof over their family™s head; the salary that puts food on their family™s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

I believe that famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney,  a good agent  will save you money¦not cost you money.

Do You Own The Foreclosure You Just Purchased?

May 25th, 2011   by lisasheppard

Back in February, we posted a blog titled MERS: a MESS We Should Know About. In that post, we warned that MERS, a system most mortgage entities have used in transferring the ownership of mortgages, might turn out to be rather problematic. It seems MERS is now creating challenges in the foreclosure process. DSNews reported last week that the state of Michigan is not recognizing some of the foreclosures completed using the MERS system:As a quasi-judicial state, Michigan recognizes both judicial foreclosures that go through the courts and œforeclosure by advertisement, which gives creditors™ the right to foreclose after they post a notice of the default in a newspaper for four consecutive weeks when the mortgage includes a power of sale clause. The appellate court ruled the latter is not a valid function of MERS because the company does not own any interest in the debt. The judgment does not apply to judicial foreclosures conducted by MERS.If the courts have determined that  certain foreclosures  will not stand, do the original owners of the property still own the home? What about the new buyers who have purchased the foreclosure? The article says:  ¦the court™s decision could void thousands of foreclosure actions in the state, including properties that have already been sold to new buyers.

What about future foreclosure sales in Michigan?

If they involve a MERS™ foreclosure by advertisement, title companies may be afraid to issue clear title:The Detroit Free Press says it™s received reports from local Realtors that title companies are canceling closings on some bank-owned homes in light of the appellate court™s ruling. According to Randall S. Miller, Esq., of the law firm Randall S. Miller & Associates in Bloomfield Hills, Michigan, œTitle underwriters are taking a very conservative stance on the issue and will not insure any property that was foreclosed in the name of MERS to be insured at REO sale unless the foreclosure was performed prior to 2005. Michigan has a five-year statute of limitations period in which to bring litigation challenging a foreclosure.  

Bottom Line

It appears that some states are taking a hard line stance on certain MERS foreclosures. How much confusion will this create? We™ll have to wait and see.

Appraisals: Why You Must Now Sell Your House Twice

May 24th, 2011   by lisasheppard

Banks have become very conservative when lending mortgage money today. With the current foreclosure challenges in the country,  we can™t really blame them. The requirements now necessary to qualify for mortgages have gotten much more stringent and it seems will get even more stringent as we move forward. The banks want to make sure the prospective buyer has the ability to repay the loan. However, this does not just involve the borrower buying the property.The second way a bank can protect their investment in the mortgage is to make sure that the collateral backing that mortgage is secure. That is where the appraisal comes in. The bank wants to make sure that, should the buyer not be able to make their payments, the house they will be forced to take back will sell for an amount at least equal to the balance left on the mortgage. For that reason, the banks seem to be getting more conservative with appraisals also.This past week, the National Association of Realtors (NAR) released their Existing Homes Sales Report. In that report, they said:œ11 percent of Realtors ® report a contract was cancelled in April from an appraisal coming in below the price negotiated between a buyer and seller, 10 percent had a contract delayed, and 14 percent said a contract was renegotiated to a lower sales price as a result of a low appraisal.One out of four real estate transactions was either cancelled (11%) or renegotiated to a lower sales price (14%) because of a low appraisal!!

Bottom Line

Every house now has to be sold twice: first, to a potential purchaser and then to the bank appraiser. And, it seems that the second sale may be the more difficult of the two. Sit with a local real estate professional and make sure you put together a plan for both sales.

Fun Information about Sonoma County

May 23rd, 2011   by lisasheppard!/video/video.php?v=755368134244&oid=78860658848&comments

National Housing Survey-What America Thinks

May 23rd, 2011   by lisasheppard

Each quarter, Fannie Mae releases their National Housing Survey. They survey the American public on a multitude of questions concerning today™s housing market. We like to pull out some of the findings we deem most interesting each time it is released. Here they are for the most recent report:

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:1.             It means having a good place to raise children and provide them with a good education2.             You have a physical structure where you and your family feel safe3.             It allows you to have more space for your family4.             It gives you control of what you do with your living space (renovations and updates)

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes their is a money component to homeownership. Here is what they said on this issue: § 66% of the general population (and 71% of homeowners) believe that homeownership is a ˜safe™ investment. This is the first time since the studies inception in 2003 that this number increased. § 57% believe that homeownership has more potential as an investment than any other traditional asset class. § 67% think that now is a good time to buy a home

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning. § 65% of renters have aspirations to someday own their own home § 74% of renters think that owning is superior to renting (up 6% since the last survey) § 96% of homeowners see homeownership as a positive experience (3% see it as a negative experience) while 82% of renters see renting as a positive experience (16% see it as a negative experience) § 92% of homeowners live in a single family residence while 48% of renters live in a multi-unit building

Bottom Line  

Our belief in the value of homeownership grows each time this survey is released.

Look Past the Headlines…..

May 20th, 2011   by lisasheppard

Earlier this week, Trulia and RealtyTrac issued a press release regarding a survey completed for the two companies by Harris Interactive. The press release, American Expectations for Housing Market Recovery Falters , reported:œAs more cities across the nation experience double dips in home prices, more than half (54%) of U.S. adults believe recovery in the housing market will not happen until 2014 or later, according to the survey released today.And both organizations that commissioned the survey addressed the reasons Americans may feel this way:

Rick Sharga, SVP of RealtyTrac

œOur survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off. Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover.

Pete Flint,   CEO of Trulia

œMost Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process. Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate¦ In my eyes, we have another 18 months until we start to see signs of price stability in the housing market.These findings created a rash of sensational headlines declaring the housing market™s further decline.While we are not sure how people defined ˜recovery™, we don™t disagree that the housing market still needs time to heal. How much time? What do other experts predict? We™ll leave that to another time.Today, we want to mention other parts of the press release that didn™t receive the same coverage as the the parts that created those strong headlines. Mr. Flint addressed the nation™s concerns (above) but also said:œOn the flip side, mortgage rates won™t stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market.And Ken Shuman, a Trulia spokesperson said:œAccording to our latest data, it is more affordable to buy a home than to rent in 78 percent of major U.S. cities. With concerns of rising inflation and the potential for rising interest rates, now is a good time for people to buy and we may not be in this environment for much longer.

Bottom Line

There is great data about today™s housing market being released almost every day. Let™s make sure that we read not only the headlines but instead study the entirety of the information.

Mortgage Money IS Available….For Now….

May 19th, 2011   by lisasheppard


3545 Fairfield Court, Santa Rosa….a MUST SEE!

May 18th, 2011   by lisasheppard

Where Are Mortgage Rates Headed?

May 18th, 2011   by lisasheppard