Upcoming Foreclosure Listings in Chico, Oroville and Willows
May 31st, 2009 categories: Chico Buyers, Chico CA Foreclosure Listings
The following foreclosure properties are in “pre-listing” status with The Sandi Bauman Team! at Chico Homes.
1. 2496 Streamside, Chico CA DUET 3/2
2. 2280 Moyer Way, Chico CA SFDET 3/2
3. 2923 Greenville, Oroville CA SFDET 2/1
4. 806 N Lassen, Willows CA SFDET 3/2
If you are interested in receiving more information on any of these properties, please forward your name, phone number, and email address to: sandi@sandibauman.com.
As soon as list prices become available, you will be notified immediately!!
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Chico State University Condo Rental Unit For Sale
May 2nd, 2009 categories: Chico Buyers
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Chico Home Buyers Get Off The Fence and Into the Real Estate Market
June 27th, 2008 categories: Chico Buyers, Chico CA Real Estate Market Stats, Chico CA Real Estate News
by Mike Wiegert
On a national level, existing home sales increased in May as buyers are reacting to lower home prices according to the National Association of Realtors (NAR). May figures indicate 4.99 million existing home units sold, up two percent from April’s sales of 4.89 million sold units. This number is still a far cry from May 2007 sales at 5.93 million units. The reason for the latest increase in national home sales was summed up by NAR President Richard F. Gaylor, “Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages,” he said. “Today’s buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth.”
NAR Chief economist, Lawrence Yun, indicated last week that there is a significant inventory of homes. “The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,” he said. “Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.”
So what do the statistics mean to homebuyers in the Butte County area? At 472 active residential listings in the Chico area market, our local inventory is significantly lower than the national average per capita.
With an urban area population of 106,000 residents, the number of available homes compared to the number of residents is substantially less than most cities across the nation. In a nutshell, although the Chico real estate market is a “buyer’s market“, a less than generous selection of listings in our area diminishes the possibility of buyers coercing sellers into accepting cut-rate offers.
Local homeowners have indisputably seen their home prices drop over the past year. With a median sales price of $308,750 in June 2007 compared to $272,000 in June of 2008, year over year statistics appear to indicate almost a 12 percent decrease in median home prices sold for our area. And with the subsequent losses of equities following these price drops, many sellers are not in the position to accept bargain prices on homes that they owe more on than these proposed offers. I can’t really count the numbers of sellers who have expressed an unwillingness to go out of pocket to sell their homes. Instead, they are bunkering down and waiting for the market and prices to stabilize. Is this a good or bad strategy? You’ve heard it before, “real estate is a long term investment.” For many, it might be prudent to wait out bad times. For others that need to sell to relocate, hopefully many redeeming real estate opportunities exist in their new location.
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FHA Announces Changes to Lending Guidelines Effective July 14, 2008!!
June 16th, 2008 categories: Chico Buyers, Chico CA Real Estate News, Chico Financing
by Ken Phillips
For the first time in history, FHA will begin using borrowers credit scores to determine risk based pricing and mortgage insurance premiums.
Up until now credit scores were not really a factor used in FHA risked based pricing. With FHA relaxing some of their strict requirements recently it was easier to qualify buyers with credit scores low enough to prevent them from qualifying for “conventional” financing. As a matter of fact, with 100% financing a thing of the past basically, FHA financing has become very popular among lenders looking for high loan-to-value loans as FHA financing, which can cover up to 97.75% of the purchase price if a buyer is paying their own closing costs on a purchase, still carries low interest rates compared to high loan-to value conventional financing. FHA is a great loan for first time Chico home buyers with little money to put down and/or with low credit scores that prevent them from qualifying for a conventional loan. On July 14, 2008 FHA will begin implementing these changes and it will affect qualifying for many of borrowers.
Here’s a look at the ten major changes to the FHA guidelines:
1. Borrowers with either no score or at least a 500 score may get an LTV >90%.
2. Borrowers with a score less than 500 get a maximum LTV of 90%.
3. Borrowers without scores will require manual underwriting. What this means is no automated underwriting is available i.e. DU, LP, or DO and will require more time to give the realtors/agents a TRUE pre-approval letter.
4. Upfront Mortgage Insurance Premiums will range from 1.25% to 2.25%, depending on score. These upfront MI premiums will still be allowed to financed into the loan.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on the borrower’s credit score.
6. The premium is based on the borrower with the lowest score.
7. If one of the borrowers has no score, then the Non-Traditional credit grade is used. Non traditional credit is having trade or credit lines added to the borrowers credit report and obtaining a credit rating. These non-traditional trade/credit lines can be utility bills such as water, cable, electric, gas, phone, etc., cellular phone service, and rental history to name a few.
8. Credit rescoring is allowed to improve a borrower’s credit score. There are fees associated with credit rescoring and each bureau charges fees for each tradeline disputed.
9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI.
10. Along with purchases, these changes will apply to cash-out, rate & term, and non-delinquent FHA Secure refinances.
Feel free to call Ken 865-769-6420 if you have any questions regarding FHA financing or any of Countrywide’s many loan programs .
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Chico Buyers and Sellers: Is a Lease Option the Right Option?
April 11th, 2008 categories: Chico Buyers, Chico Sellers
by Mike Wiegert
“Mortgage Meltdown” or “current mortgage crisis” are terms we commonly hear these days to describe an astonishing lack of real estate financing options. 100 percent financing, stated income and loans for borrowers with marginal credit, once common two or three years ago are now a thing of the past. In fact, these frivolously used loan programs were largely responsible for the hyperinflation in real estate prices seen during the first five years of the new millennium and the now subsequent alarming rate of foreclosures and short sales. Due to a lack of “easy” financing programs, we’re starting to see some of the creative techniques of home selling once popular in similarly slow real estate markets creeping back into use. One of the most commonly used methods of acquiring real property in times of stringent financing requirements has been the Lease Option Purchase.
A lease option basically means you are leasing or renting a Chico property with an option to buy it at a future date. The future price of the property should be fixed at the time the lease-option is signed.
Usually there is an up-front payment of some amount to purchase the option. The amount can vary. Sometimes the monthly payment is larger than normal and the excess is used to purchase the option. In some cases, the option money can be applied toward the down payment for the later purchase of the home.
The problem with most lease option agreements is that although most buyers using this type of sales agreement actually do intend to purchase or execute the agreement within the stipulated period of time, they rarely end up buying the home. Buyers using the lease option agreement most often do so because they cannot qualify for a home loan. Although they expect their financial issues to change, most of the time they find that they still cannot qualify. The process of qualifying for a mortgage requires a gamut of components, ie., credit, documentable income and savings verification. A would be buyer using the lease option agreement means well, but frequently is unable to resolve adverse credit issues and subsequently is unable to complete the transaction and loses the option money consideration.
BUYER BEWARE: A buyer wishing to enter into a lease option agreement may do so with all good faith. A well written lease option agreement will include a provision whereby upon the onset of the agreement, a Preliminary Title Report is issued by a Chico Title Company disclosing all the known liens, encumbrances and legal claims that may be attached to the property. The best title report in the world isn’t going to reveal that the Seller may be in financial trouble and a foreclosure may be just around the corner. Although the lease option agreement will stipulate that the Seller is to continue to make the monthly payments and taxes and maintain the property insurance, it’s certainly conceivable that a less than honest Seller may elect to accept a buyer’s option money and discontinue paying on the property.
A few months down the road, an unsuspecting buyer may find that the home in Chico is now in foreclosure and after the title reverts to the bank or an auction buyer, they may be faced with an eviction notice.
Of course, the buyer will have legal recourse against the seller but may not have the financial means to proceed against the him. In most cases, the seller will have used the option money deposit to resolve other financial difficulties and not have the resources to remedy a judgement against him. A possible solution to this dilemma, is for the parties to agree to leave the option money in a neutral escrow, until such time that the option is either executed or the lease option agreement is terminated.
Whatever creative proposals are considered, as always, when engaging in a complicated real estate transaction, do so with a trusted real estate professional or attorney who can explain all the ramifications of the sale.
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