Thank You!

As we wind down 2008, I just wanted to offer a sincere thanks to those I've had the priviledge to serve this year. You have referred me to your friends, family memebers, and business associates and for that I am very grateful. Repeat and referred clients make up 95-100% of my business and I thank you for putting your trust in me. By you doing that, I am able to focus on providing outstanding service and I don't have to cold call like all the other Realtors. That way, I can do an even better job serving you and those you refer to me. Your business and trust is something that I will never take for granted. Wishing you and your families a FINE 2009! And, oh by the way, I'm never too busy for your referrals.

How to Get a Good Interest Rate

As we've seen the pastr couple of weeks, interest dropped to as low as 4.5% for a conforming, 30 year fixed rate loan which is outstanding. But after a few days, the rates went up. What happened? This is a fairly common phenominon where the banks get flooded with requests for refinancing and can't keep up with demand. So they raise rates in the short term to choke off the demand for new loans. What do the smart people do? They meet with their mortgage lender and get all the paperwork set up now (applications, verifications of employment, etc.). Most people wait until rates come back down again. But when rates drop again, the demand shoots through the roof and the cycle repeats itself. Be smart, set your paperwork up now and have your trusted loan professional give you a call when rates hit your target mark. Need a trusted loan professional? I know a couple of great ones. Contact me and I'll be happy to refer you to one. I make no money on it, but I believe that good deeds do come back to you.

Choosing Your Lender on a Bank Owned Home

Yesterday I was showing a very nice bank owned property to clients who decided to have me write an offer for them. But before the bank would review their offer, they required that the buyers get preapproved by them first. Even though the buyers were already preapproved by another lender, it still was a requirement. A bank cannot require that you use a specific lender to actually purchase the home, but they can (and often do) require that you get preapproved with them first. They do that to ensure they 1) are dealing with a credible buyer and 2) are given an opportunity to get your loan business. So who should you have do the loan? Having been involved in a several of these in the past, I would suggest that you keep an outside lender as your primary source. That way you still have an independent source looking out for your best interest. Remember, when you have the Bank Owned lender do your loan, you are really working with the seller.

Is it a Seller's or Buyer's Market? (Don't be Fooled)

First, let's define each. An equalibrium market in real estate is when there is 6 months worth of homes on the market. That means if no additional homes were put on the market, it would take 6 months to sell the existing inventory. When there is more than 6 months worth of inventory it is considered a Buyer's market because there is more to choose from. When there's less than 6 months of inventory it's considered a seller's market because with fewer choices, sellers can command premium prices. So where are we today in Santa Clara County? It varies by area, but as a whole we only have 6.5 months of inventory on the market (present inventory is 5,267 homes with an average of 878 homes per month selling). In Santa Clara County, we're not used to anything but a seller's market so it may not feel like an equilibrium, but this is what it looks like.

Insider's Market Update

Here's an update from deep inside the real estate community. I just returned from an event in Arizona where many of the top agents from around the country meet to share information about their local markets. According to agents in San Diego, they are experiencing multiple offers on lower priced homes and home buyers are having difficulty getting their offers accepted. In many parts of Texas, the market is holding strong. Florida still has its challenges. Prices in Arizona have come down by about 35%, but rents are very strong there so investors have some opportunities for good cash flow. The forecast is that we will be out of the recession by mid 2009, but it won't be reported until the end of 2009. According to mutiple sources, there is $11 Trillion (that's right, TRILLION) sitting on the sidelines after being pulled out of the stock market. It's earning next to nothing for its owners. That money will go somewhere. Today, real estate is still on sale with some of the lowest rates in history. The smart money is getting in before the next run up.