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The revised stimulus plan increases last year’s $7,500 tax credit to $8,000 for homes purchased after January 1, 2009, and eliminates its repayment.  It is available only to first-time homebuyers, which is described as those who haven’t owned a house during the past three years.

Whoop-te-do.

Here’s the link to the press release:

http://www.finance.senate.gov/press/Bpress/2009press/prb021209.pdf

IMN is reporting “a restoration of higher loan limits for Fannie Mae, Freddie Mac and FHA loan guarantee programs appears to have made the cut.”   But I didn’t see it in the press release.

The reason I like doing contests is because they allow you to try out your theories – you can guess what will happen in the market, and we’ll follow along to see how it turns out.

I’m not making fun of BR.  Unfortunately it’s an area that has been hard hit by the RE downturn, and others deserve to know about it, and learn something from it.  In fact, everything you see on this blog is anecdotal evidence (def. ‘based on personal observation, case study reports, or random investigations rather than systematic scientific evaluation’).  Use what you see here to help educate yourself about what’s going on around you.

The biggest difference between the two REOs is that the first one has a finished backyard, and the second’s backyard is raw dirt but has a decent westerly view instead – and is listed $4,800 higher ($805,100 vs. $809,900). 

Somebody will find that these REOs are worthy of their investment – but at what price? 

Guess the combined total of the sales prices of these two REOs, and for a tie-breaker include your guess for combined days on market (MT on our MLS). The winner will receive four tickets to a Padres game!

(Jake Peavy was on the radio yesterday for the first time since the trade rumors. He expressed his affection for San Diego, and his intent to stay here as long as the team will have him!)

The folks in Bressi Ranch experienced a quirky event yesterday – not one but two REOs, both the same 3,815sf model and across the street from each other, came on the market on the same day – for almost the identical price!

Here is the history of these two:

6344 Huntington: Sold for $958,500 - May 2005, resold for $1,300,000 June 2007

6363 Huntington: Sold for $1,099,500 – April 2005, refinanced $1,125,000 December 2006

The resale of 6344 Huntington enabled 6363 to get their refi done, and probably a few dozen more in the neigborhood.  The fraud by what’s-her-name had a long reach, and there will be others caught in the cleansing over the rest of 2009, if not longer.

My original BPO on this Valley Center REO was $499,000, but, of course, the appraisal came in higher so we listed for $579,900 on December 23rd.

They lowered it to $546,900 on January 2nd, and a few days later an offer for $500,000 came in.  The bank countered full price.  The buyers thought I was joking.

Today, the bank lowered it to $499,900.

I went back to the offerees, but they said that they weren’t interested anymore, that they were sick of dealing with banks that won’t counter in good faith.

Anybody want a 4,469sf house on two acres in remote Valley Center for $499,900? 

It has high ceilings!             >> side view >>>>

The cash-for-keys program got a jolt with the new wave of foreclosures being processed.

It used to be that we’d offer a $2,000 reward to the occupants of REO for vacating the premises within 30 days, instead of the usual 60 days.

Countrywide has upped the bounty – now we’re offering $5,000 to leave within 30 days.  The previous offer was accepted less than half of the time, but now the occupants are jumping at the chance to grab the free $5,000!

What a country!

Those of us who have been looking at REO listings have seen signs like this one in virtually every house.  Sure, the listing agents want to have a phone number available so they’ll be contacted in case the house burns down – but do you really think they want to be called if someone is trespassing? 

You can’t help but think that the listing agents are really looking to scoop the buyers themselves.

How often does it happen?

A review of five REO listing agents found that 132 of the 500 escrows closed since 7/1/08 were sold by someone in the listing agent’s office.

Only 26%?

How come it isn’t more?  Afterall, with the multitude of websites advertising the inventory around the planet, buyers are taking the search into their own hands.  Most will do drive-bys, and that’s where these listing agents hope to land them.  Many install their yard signs weeks or months in advance of the listing actually hitting the open market.

Wouldn’t you think that they’d represent at least half the buyers?

Here are the reasons they don’t:

1.  When you call the phone number, rarely do you you get the actual listing agent.  They have a team of buyer’s agents standing by to take your call, and they are buried with leads.  If you want to jump in their lap and pay list price, they’ll be happy to help.  But if you want to lowball, or get a rebate on the commission, it probably won’t happen.  They have too many other prospects that will go down easier.

2.  The listing agent is making plenty of dough.  If it ends up being a multiple-offer situation, they will be very careful about representing the bank/seller first, even if it means their own buyer may lose out to a higher bidder.  They aren’t going to risk being seen as pulling a fast one in the eyes of their sellers.

3.  Buyer’s agents are telling their buyers to pay too much – more than the listing agent is willing to inflict on their own buyers.  But the big REO LAs are taking listings all around the county, and often end up with the wrong list price – some too high, and some too low.  Their uncertainty of the real value can be trumped by a expert local buyer’s agent who knows the market better.

4.  The listing agents care more about volume.  They want to blow out more sales, and if solid offers are coming in from good buyers/agents, then they’ll make that deal, and spend their valuable time working on listing more REOs.

5.  The LAs aren’t pushing the product with advertising and open houses – just dump ‘em in the MLS and let others do the work with buyers.

I just had one where the REO listing agent told me to back off, that a buyer had contacted them directly, and signed a blank offer with the instruction to fill in the price, adding $1,000 to the highest offer.  I appreciated the candor, but I didn’t listen.  My buyer bought the property!

In summary, don’t think that going direct to the REO listing agent means you’re getting a better deal.  The work needed to do all your own searching and negotiating is time-consuming, and there is no guarantee that going direct is going to make a difference.  If it’s a hot property, there will be multiple offers, and the REO listing agents are going to do what’s best for the seller first.

Remember this one, with Santa’s note on it?  His sign has been out there for two weeks, we’ll see how long it is before it hits the open market.  Countrywide and most other lenders won’t accept an offer unless they see that the listing has been inputted onto the MLS, so if you wanted to buy this today, it’s not available.  But will the agent call you the day they put it in the MLS, and give you a clean shot? 

For those who didn’t see this at Calculated Risk, here’s the old running-pool trick. I mentioned in the video that it was a trustee sale, but forgot that later we found that it was an auction property – thanks nameless for the reminder.

Another ploy by sellers & agents is to crank up the music in an effort to drown out undesirable neghborhood noise. If you walk into a house for sale that has the music on, ask to turn it off, or do it yourself, because in the event it is masking an unwanted noise, you’ll want to know about it.

How does CR keep scooping me on these? It’s because it can take 3-6 hours to upload a video onto youtube, and I’m not always sitting around at the moment it goes live. He’s a subscriber, so he gets notified immediately, and has scooped me 3-4 times now!

It sounds like the stimulus plan might include another NAR-backed plan that has little or no chance of helping sell more houses – at least now around here.  Like someone said on CR, $15,000 is a rounding error in this part of the country.

I can’t imagine anyone who wasn’t planning on buying a house, who all of a sudden hears about the $15,000 tax credit and jumps in and buys because of it.  The 4% interest rate plan would have a better chance of exciting buyers, because that’ll benefit them for the duration.  But that plan already got shot down.

They should just take all the money they are willing to throw at this, divide it up and send each American a check – that would be fair, wouldn’t it?  Otherwise, the stimulus plan will unfairly benefit a few folks, and do nothing for those not buying.

The proposed tax credit is applied to income tax you would have paid over the next two years.  If you’d like to read more about it, this blog site has a discussion on it with a few examples:

http://www.stupidcents.com/274/opinion-15000-homebuyer-tax-credit-is-too-good-to-be-true/

This REO just listed yesterday, and if you been hoping to find 1,800sf under $400,000 in Carlsbad or close by, this might be worth a look.

At the 3:00 mark we’re in the upstairs bathroom, and there is a quick shot of white floor next to the toilet where the bidet used to be. The terracotta tile was installed right on top of the old white tile!

Fannie Raises Limit on Investor and Second Home Borrowers from 4 to 10 Financed Properties

At the urging of NAR, Fannie Mae announced a new policy on February 6, 2009, to allow investors and second home buyers to own up to 10 financed properties.  The new policy takes effect on March 1, 2009, and replaces the current 4-property limit.  The restriction applies to the total number of financed properties, not just to the number sold to Fannie Mae.

Investor and second home borrowers that seek to own between 5 and 10 financed properties must meet additional eligibility requirements.  Borrowers must have a credit score of at least 720.  The maximum loan-to-value ratio is 70% or 75%, depending on specified criteria.  Borrowers may not have any history of bankruptcy or foreclosure in the past 7 years, or any mortgage delinquencies of 30 days or greater within the past 12 months.  Reserve and other requirements also apply.

Fannie Mae Announcement 09-02 (2/6/09):

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf