Erin Attardi's Blog

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Dodged a bullet this week on one of my short sales.

For those of you who have not noticed, it seems like everyone and their mother is refinancing right now to take advantage of the low interest rates. Great. This has pushed loan processing, underwriting, document drawing, and funding timeframes out because lenders have not added staff to meet the increase in volume...each step is taking several business days to complete, making 30-day escrows for purchase transactions pretty tight.

Erin, why is this a problem?

Generally speaking, when a short sale lender approves a short sale, per my experience about half the time the short sale lender allows 30 days from the date of approval to close the transaction...the other half of the time, they allow LESS than 30 days to close the transaction.

So...I have a short sale listing that received approval from the short sale lender on April 28th. The approval expires on May 28th. Cool, right?

In theory, that should be adequate time to close this escrow. The buyer's agent was really on the ball, however the loan officer for whatever reason did not share our sense or urgency. The appraisal was ordered within a couple days, and the buyer's loan went into underwriting within less than a week of the short sale lender's acceptance. Under normal circumstances, underwriting would have taken 3-4 business days, and documents would have been drawn and sent to escrow within another day or so. In this case, it took 9 business days to underwrite the loan. Then, as if that were not long enough, it then took 5 business days to draw loan documents.
The loan officer's attitude? "Oh - no big deal. The short sale lender will just grant an extension to expiration date on the approval documentation." WRONG!

Loan documents were FINALLY received by Placer Title on Friday after the buyer's agent and I escalated our efforts and went above the loan officer's head.

So tell me...what do you think would have happened if the buyer were unable to close escrow on time? Extensions to the expiration date of a short sale by the short sale lender are NOT AUTOMATIC. Some short sale lenders will require you to start the process over if you can not close on time. Some short sale lenders will charge you a per diem penalty for each day past the expiration if you can not close on time...I have seen this as high as $200/day. If there is a Trustee Sale date set for a day soon after the short sale expiration date, some short sale lenders will allow the property to foreclose.

The moral of the story? Don't test these waters. Do everything humanly possible to close on time. Buyers - make sure your lender is prepared, and has a complete file so all that is needed is an appraisal to turn the file into underwriting.

While working on my short sales today, I made my way through the automated system for Aurora Loan Servicing, when the prompt informed me that my expected wait time was - one hour, nineteen minutes, and fourty-four seconds. No joke.

Obviously I had my work cut out for me.

I am particularly proud of this creation during today's bout listening to hold music while negotiating short sales. This required some manipulation of the image of my face within the hole provided...

If you do not recognize the body of this photo (sorry fellas, not my real body!), this was a shot of Britney Spears a few years ago, pre-children, for the cover of a magazine.

If anyone was wondering, that one hour, nineteen minutes, and fourty-four seconds of estimated hold time turned out to only be 48 minutes. Lucky me. :-D

I am not ashamed to admit that yesterday I did a little "happy dance" when I learned from Placer Title that one of my transactions went on record (closed escrow).

To set the stage...I was the listing agent for a really nice property in South Land Park Terrace...this was one of my few non-short sale listings. If you are not familiar with South Land Park Terrace, it is a neighborhood just to the south of William Land Park / Sutterville Road. The homes were built primarily in the 1940's - 1960's and are generally ranch style...a much different look and feel than their neighbor to the north, Land Park. Being geographically so close together, they have do some neighborhood amenities in common, however values and market trends are a bit dissimilar.

Anyway, we were able to get the property into contract with a buyer...however there were literally no "like kind" recent sales in South Land Park Terrace within the last 90 days. Like kind comps are a key component of what an appraiser needs to justify the value of the property for the buyer's lender, so the buyer can obtain financing for the purchase. In fact, the highest sale in the last 90 days in SLPT was $335,000. That home was on a relatively busy street, was in inferior condition, and was over 500 square feet smaller. Not at all of "like kind" to my listing, which was in contract for $485,000, superior condition, superior location, and much larger.

UGH...if ya'll have been reading my blog for a while, you will know that appraisals in general have been really hairy lately. Not only have the processes for ordering appraisals for most types of transactions changed recently (thanks to the HVCC, which is crappy legislation by the way), but appraisals live and die by the comparables used, and are subject to review and generaly beating up and re-valuing by the loan underwriter.

Needless to say, all parties -- listing agent, buyer's agent, buyer, and seller -- involved in this transaction were really sweating the outcome of the appraisal because although we all knew the value of this property was indeed the contract price of the property, we had very little proof. The most recent like kind comps sold back in September 2008.

By some act of god, the appraiser assigned to this file was familiar with the area. He used the most appropriate comps he could find (went to comparable outside neighborhoods), made the appropriate monetary value adjustments, and wrote LOTS of narrative comments justifying the value of the house. When the appraisal report was received by the lender, it came in at the contract price!

Ok...that was the first hurdle - next we had to get that appraisal through the fine toothed comb of the underwriter. If ya'll remember, in one of my past transactions this year, an underwriter used Zillow to second-guess the value of an appraisal. So the underwriter reviewed the file, and did not question the value assigned by the appraiser!!! Loan documents were drawn and sent to Placer Title!

Anyway...so the end result - we closed escrow yesterday! I was sitting in a committee meeting at the Sacramento Association of Realtors when I received the email from escrow that the transaction was officially on record. I got high-fives from others sitting at the table!

Want to know another little tid-bit? During the escrow, I received calls from three separate agents, engaged in three separate transactions, wanting to know if we had any appraisal issues and when our close of escrow was scheduled...they were not so fortunate to have a local and knowledgeable appraiser assigned to their transactions. They desperately needed my listing to close so they could use it as a comp. Any potential refinancing in that neighborhood will likely benefit from this comp too. I wish them all well.

It's been a while since I wrote a long blog post, so I figured today while I spend some time as the "agent on duty" I would write a novel...or at least maybe the first chapter of a novel. Ok, make that the prologue to a novel. Whatever...

So if any of you follow me on Twitter, you already know that this last Friday morning I was lucky enough to attend a presentation by Nancy Bui, one of the elected Directors for the Sacramento Municipal Utility District (SMUD).  Each month, the Sacramento Association of Realtors hosts a "Public Issues Forum", and Ms. Bui was nice enough to talk to us...

A couple fun facts about SMUD before I get too far into this...did you know that SMUD is the sixth largest community-owned electric system in the US in terms of the number of customers served? I didn't! SMUD provides services to more than 550,000 customers (more than 1.3 million residents) over a 900-square-mile area that includes Sacramento County and a small portion of Placer County. 

Anyway...we are very lucky to have SMUD in Sacramento. Why?

• They are making their "carbon footprint" smaller. They are planning to meet the new greenhouse gas emmission standards set forth in legislation AB 32 ahead of schedule (before the year 2020).
• Currently 17% of their energy generation is done via "renewable" energy sources.
• As a SMUD customer, you can choose to have your energy come from mother earth. You can choose to buy energy from natural sources of energy as the sun, the wind, or methane gas through SMUD's Greenergy® program.
• SMUD is helping local builders plan energy efficient home communities. They have partnered with 11 local home builders to construct over 4,100 new "Smart Homes."
• SMUD offers financing and rebate programs for energy efficient upgrades. You don't have to purchase a brand new home to have one that is energy efficient! You can finance new central heating and air conditioning, dual pane windows, solar / photovoltaic installations, etc. and get rebates for things like purchasing new Energy Star appliances, sealing your HVAC ductwork, installing a whole house fan, etc.
• They are rolling out "AMI Meters." These "Smart Grid" meters will be rolled out to all SMUD's customers over the next few years, and will replace the meters in your main panel. Through a web interface, SMUD customers can log in and view their energy consumption in real time, and modify they way they are using electricity in their homes to save money and energy.
• SMUD offer free shade trees for your home! They are a long time partner of the Sacramento Tree Foundation and according to SMUD, tree roots help clean rainwater and add stability to the soil, they produce oxygen and help cleanse the air we breathe, and if properly placed they can cut your home cooling costs by up to 40 percent.
• SMUD has a really neat online energy consumption calculator that any SMUD customer can use to help determine your current energy usage, and that suggests strategies to make your household more energy efficient, and suggests ways might save on your bill.

SMUD is looking for ways to make Green, energy efficient technology more accessible to its customers. We Sacramento residents are truly lucky to have such a forward-thinking and progressive local utility provider on the bleeding edge of this movement!

In light of the fact I am completely annoyed that the Giants' bullpen somehow managed to blow their 3 run lead this evening, rather than watch the rest of the game, I have decided to write a blog instead. I had a really long day and was hoping to relax in front of the tube and watch the Giants win...but I find blogging very therapeutic, so here we are.

So lately, the vast majority of my buyer clients have been first time home buyers. This is truly an exciting time to be a first time buyer! Why?

In many cases, your monthly mortgage payment will be roughly the same as your monthly rent payment. The median home price in Sacramento County in April 2009 was $165,000. Using an FHA loan program, $165,000 with the required 3.5% downpayment ($5,775), the monthly payment comes out to approximately $1,132...that is the fully loaded monthly payment for a 30-year fixed loan at 5%, including your principle, interest, property taxes, homeowner's insurance, and mortgage insurance.

There are some very advantageous tax credits available to first time buyers at both the state and federal level. The California state tax credit is up to $10,000 spread out over 3 years, applies only to new construction homes purchased until March of 2010. There is a cap on the total tax credit of $100M...so the money runs out, and all that make qualifying purchases may not be able to take advantage of the credit. The federal tax credit is up to $8,000 for any principle residence purchased before December 1, 2009. Please check with your CPA to see how you may qualify for these tax incentives.

There are several first time buyer grants and downpayment assistance programs available. Many are based on your profession, household income, number of people in your household, and the city or county where the home is. These programs change all the time, and availability of funds changes all the time too...be sure to work closely with your loan officer to see if you qualify.

All good stuff...the combination of these circumstances is just too much for most first time buyers to resist!

Anyway, in the time it took me to write this post, the Giants LOST to the Mets 8-6! What a joke...Starting pitcher Tim Lincecum got a no decision. GRRR.

Hmm...what's going on here? The median real estate price point in Sacramento County has been pretty even for the last four months in a row.

Supply and demand is a pretty basic economic principle...if you look at the number of homes on the market versus the number of homes that closed escrow in April 2009, there is only a 2.5-month supply of homes on the market. These inventory numbers are really interesting if broken down into different price ranges...in the $200k and below price range, last month there was just 1.6 months of inventory. Between $200k - 500k, there was 3.3 months of inventory. Over $500k, there was 13.6 months of inventory!! The market is very brisk and competitive in the lower price ranges. For a reference point, 6 months of inventory is widely regarded as a market with buyer/seller equilibrium.

Just to flash back...in September 2007, the overall supply of homes in Sacramento County had reached / peaked at 15 months.

Please keep in mind that not all areas and neighborhoods are affected in the same way...if you would like me to email you statistical graphs for a specific zip code, feel free to email me at erin@erinattardi.com.

 

I attended a presentation given by a representative of Fannie Mae last week at the Sacramento Association of Realtors "Real Estate Finance Forum" and learned some great information about an FHA program that many folks are unaware even exists!

The FHA Streamline Refinanace is pretty slick...if you have an existing FHA loan on your home and you have made on-time payments for the last 12 months, you may qualify for a refinance of your existing loan if you are not taking cash out, and if the overall goal is to lower your principle and interest payments. 

According to their guidelines, your credit score itself is not a factor. The value of your home is not a factor as no appraisal is required if your new loan amount does not exceed the previous loan amount!

If you are interested in finding out how to refinance your existing FHA loan to take advantage of the really LOW interest rates we are experiencing in the market today, call me and I can put you in touch with someone who can assist you!

Light and bright 3 bedroom, 2 bath Rosemont home is ready for a new owner. You will absolutely love the fresh interior paint, open layout, cozy fireplace, big backyard with newer fencing and landscaping, newer composition roof, and central heating & air. Don't wait! Subject to lender approval of short sale. Visit http://4116applegatedrive.com/ for more detail and photos.

3 bedroom, 1 bathroom fixer located on a quiet Fair Oaks street. You will love the large lot (.23 acres per assessor) with two storage sheds. Updated bathroom with newer tub/shower enclosure and tile flooring, updated kitchen with newer cabinets, tile flooring and stainless appliances. Sorry - no FHA or VA financing on this property...offered at $125,000 subject to lender approval of short sale. Visit http://8542AlmazAvenue.com.

As is the case with short sales, sometimes the buyers in contract back out part way through the process...perhaps they tired of waiting for the lender(s) approval and found another house in the meantime?...had a change of heart?...

I have TWO approved short sales on the market right now just waiting for lucky buyers!

5837 20th Avenue

2754 - 2756 Lerwick Road

WELL - WHAT ARE YOU WAITING FOR!?!?!?