Others have suffered  harrowing personal circumstances that resulted in losing their home as it was returned to the lender.

Some try to do a short sale on their house, where they sell their house on the market to a willing buyer and attempt to negotiate with the lender(s) to accept less than they’re owed.

AP writer Derek Kravitz wrote an article that appeared in the San Francisco Chronicle on August 25 that offered the stark percentages in our current market.  Keep in mind that he includes short sales in with foreclosures:

“Foreclosures made up roughly one-third of all home sales this spring.    While that’s a smaller share of sales from the previous quarter, it’s six times the percentage of foreclosures in a healthy housing market.

Foreclosure sales, which include homes purchased after they received a notice of default or that were repossessed by lenders, accounted for 31 percent of the market in the April-June quarter, foreclosure listing firm RealtyTrac Inc. said Thursday.

The share of the market would likely have been larger this spring if not for a state and federal investigation into faulty paperwork by banks and servicers.  The probe has led many banks to delay foreclosure sales.  Once that is complete, foreclosures will likely surge later this year.

As a slice of all home purchases, foreclosure sales peaked two years ago at 37.4 percent.  In the second quarter, they declined from 36 percent in the January-March period.

In all, 265,087 homes in some stage of foreclosure or owned by banks were sold in the second quarter, down 11 percent from the same period a year ago.  Sales of all other types of homes also declined, according to RealtyTrac’s figures, which differ from other home-sales estimates.

Bank-owned homes, which are sold after being repossessed, accounted for nearly 19 percent of all sales.   That’s unchanged from the previous quarter.

Distressed properties, often in need of repair, typically sell at big discounts and weaken prices for neighboring homes.

A bank-owned home this spring sold for 40 less than the average price of other homes, according to RealtyTrac.   That’s up from 36 percent in the previous quarter and 34 percent from the same quarter one year ago.

Sales of homes in the foreclosure process or short sales went for 21 percent less than the average home sold, the firm said.   That’s up from an average of 17 percent in the first quarter and 14 percent in the second quarter of 2010.   A short sale is when the lender(s) agree to accept less than what is owed on the mortgage.

The average sales price of a foreclosure property was $164,217, down less than 1 percent from the January-March quarter and nearly 5 percent from the April-June quarter in 2010, the firm said.

Nevada led all states with foreclosure sales, accounting for 65 percent of all home sales, RealtyTrac said.

In Arizona, foreclosure sales represented 57 percent of all home sales for the quarter, up 16 percent from a year ago.  In California, foreclosure sales accounted for 51 percent of all home sales in the second quarter, virtually unchanged from last year.

Several other states had foreclosure sales that accounted for at least one third of all home sales in the first quarter:  Michigan, Colorado, Florida, Illinois and Oregon.”

Emeryville and Piedmont’s private sewer lateral ordinance became effective on August 22, 2011.

Oakland is now scheduled for a January 16, 2011 implementation date.

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Buyers and sellers in the East Bay should be aware of a new ordinance that could involve significant costs and liabilities.  If you’re buying a home before the first of the year, you’ll want to be sure you’re not taking on a possibly large liability on an uninspected sewer lateral.  Read on…

Oakland, Piedmont, and Emeryville will soon join several other local communities in having a sewer lateral ordinance that requires homeowners to repair, upgrade, or replace the sewer lateral line that runs from their home to the publicly-maintained sewer line that’s in the street.

El Cerrito, Berkeley, and Alameda have had similar local ordinances for years, but starting January 1, 2011, the East Bay Municipal Water District (EBMUD) will require that homeowners conduct a sewer lateral inspection and make any repairs necessary to bring it into proper repair in three different circumstances:

• If  the owner is selling the home,
• If the owner is obtaining a permit for building or modifying a property where the cost is expected to be more than $100,000.
• When the owner is increasing or decreasing the type of EBMUD water service and a new water meter is required.

If the inspection shows the sewer lateral is OK, or once the required repair or replacement has been made, a Compliance Certificate will be issued.  Where the owner has done a total replacement of the sewer lateral, the Compliance Certificate will be good for 20 years.  Where repairs (not replacement) have been made to the line the Certificate will be good for 7 years.

If the owner’s home is less than 10 years old from the date of its sale, remodeling, or change in water service, the Compliance Certificate is not required.

You can expect further refinement of the procedures for this new ordinance by the local governments of Oakland, Piedmont and Emeryville, but this is the gist of the new changes.  You can find more detailed information from EBMUD starting at their page 34 at:

http://www.ebmud.com/sites/default/files/pdfs/WASTEWATER%20CONTROL%20ORDINANCE%20NO.%20311%20AMENDMENTS%2002092010.pdf

Mom had lived there 30+ years, and while the house had great “bones,” and its major systems had been maintained through the years, it was in  need of a myriad of cosmetic repairs.  It had a 1950’s era kitchen and an original vintage bathroom that, while functional, were dated, and new owners would likely want newer versions

As a Realtor, I know how competitive the market is, and how good a house has to look in order to command the attention of local agents and buyers.  In our market, houses need to be totally clean, painted, spiffed up and staged to be competitive and to get top dollar.  I had a good idea of the changes that would need to be made since not only have I been in real estate for 10 years, I had also spent 5 years as a stager, and had remodeled and done quite well selling several of my own homes.

My clients and I had numerous conversations about what work to have done.  My recommendation was not to do the major remodeling of the kitchen and bath, since new owners would likely want to use their own style in effecting those changes, but rather  do the repairs and upgrades that would make the house shine to the broad market of “turn-key” buyers who want to move right in now, keeping in mind that they can make major changes later.

My clients had considered putting the house on the market “as-is,” doing only clean-out and clean-up to avoid the hassle of fixes and repairs, but after I told them they might lose up to $200,000 of the sales price by choosing that route, we came up with a game plan; we’d paint and polish the kitchen and bathroom , leaving them mostly as they were, and upgrade the rest of the house entirely.  Here are some of the things that were done to prepare the house for the market:

• Remove the acoustic tile ceiling in the living room.  Apparently, Mom had gotten tired of cracks in the coved plaster ceiling in the living room, so she’d had someone install a dropped, acoustic tile ceiling below it.  It was intact and nicely done, but was jarring to the eye in this beautiful, sun-filled room.
• Paint the entire interior and exterior of the house.  My stager, Nancy Nash, spent days coming up with lovely color combinations for the house, ranging from tones in the golden/tan range in the formal rooms to a dark taupe with black and white trim for the exterior.   The new colors made a huge difference in the home’s presence.
• Remove the old, soiled carpeting that covered the stairs and upper hallway, exposing the hardwood floors.
• Remove the worn cork floors in the back hallway.
• Replace all electrical outlets and switch plate covers to a neutral white.
• Replace sink fixtures in the vintage bathroom and kitchen.
• Replace light fixtures throughout the house and outside.
• Reactivate the gas line in the kitchen.
• Put a brand new refrigerator and gas stove in the kitchen.
• Replace the dated plastic wavy covering over the back deck and porch with a new clear, more modern covering.
• Stain the back deck.
• Paint the driveway and the stairs in the front.
• Clear out the back yard of ivy and other overgrown vegetation and debris.
• Refinish the existing hardwood floors, replace boards where floors were damaged, and put in new hardwood where the old cork floors had been taken out.  My clients chose a lovely medium brown for the floors with an eye to complimenting the gumwood wainscoting in the formal rooms, and the floors looked  amazing when they were finished.
• STAGE. Nancy did a tremendous job with the staging, bringing in traditional style furniture, accessories and artwork, and finishing it off with spectacular custom tabletop orchid arrangements as well as large scale indoor and outdoor plants.  We also replaced the pots that were on the newel posts on the stairs outside with fresh arrangements.

The house was entirely transformed at the end of this.  I loved working on this project, because there’s a real satisfaction in bringing a house from tired to fresh and stunning.

The response from Realtors was positive, although the listing price was an issue, as it frequently is in this market.  After a price drop, we got an offer which was lower still,  because the potential buyers were figuring in the amount they would need to spend to bring the kitchen and bathroom up to current standards.  My clients rejected the offer, spent a sleepless night thinking about it, and woke up the next morning knowing that they wanted to move into this now lovely home.  It had been transformed from Mom’s old house to a perfectly desirable home in a great neighborhood that they could make their own.

They recognized how much time and effort I’d put into making this house over, and we came to an agreement financially, so that was good.  They’re now doing the kitchen and bathroom remodeling and getting ready to sell their current home.  We just never know what the twists and turns will be in the real estate world, but this one closed out with a happy ending.

The good news is that you may be able to have your home’s property taxes decreased due to that decline in value.

Here in Alameda County, the Tax Assessor’s office has a website with detailed information on how to determine if your home qualifies for  lowered property taxes.   Here is Alameda County’s site:  http://www.acgov.org/assessor/reassessments.htm, and examples that they have provided on that site to help you determine if it makes sense for you to apply for a reassessment:

• Decline in Value Qualifying Examples

  Example 1

  • I purchased my home in the early 1990s
  • The assessed value on my property for 2010-11 is $454,082.
  • The market value of my property as of January 1, 2010 was $660,000.

  Your property in this example does not qualify for decline in value relief, as the assessed value is lower than the market value.

  Example 2

  • I purchased my home in May 2008 for $600,000.
  • The assessed value of my property for 2010-11 is $610,548 ($600,000 x 1.01758).
  • Similar model homes in January through March 2010 sold for $575,000.

  Your property in this example qualifies for decline in value relief, as the sales of comparable properties indicate that the market value on January 1, 2010 is lower than the assessed value.

  Example 3

  • I purchased my home in September 2007 for $700,000.
  • As of January 1, 2009 comparable sales indicated a market value of $650,000.
  • I was provided a temporary reduction for the 2009-10 year because the market value was less than the assessed value.
  • As of January 1, 2010 comparable sales indicate a market value of $625,000.

  Since the property qualified for a temporary reduction for 2009-10, our office will automatically review the assessed value for 2010-11 and based on the indicated value the property qualifies for a further reduced assessment of $625,000.

 

If you’re not in Alameda County, you should be able to find similar information on YOUR county’s website.

If you need help determining your home’s current market value to see if it makes sense for you to apply to lower your taxes, call me at (510)  250-6702, or email me at MMitchell@apr.com, and I will provide you with sales prices of recently sold comparable homes.  

And remember, unless you’re comparing  homes within tracts with identical floor plans, online real estate sites such as Zillow.com can provide wonderful data, but their projected market values can vary greatly from actual values due to the wide variation in styles and amenities of  homes within a community

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Still, there are indicators on which you can rely to determine whether your home’s value will rise.

KEEP THIS IN MIND:

• The unemployment rate in an area can help you determine if your home’s value is likely to rise. As the unemployment rate rises, fewer individuals are able to purchase homes, decreasing the demand, and driving down prices. To find your city’s unemployment rate and whether it’s rising or falling,  you can visit the Bureau of Labor Statistics’ Web site at;

http://www.bls.gov/lau

•  On average, foreclosed homes sell for 30 percent less than similar homes in the same area, however, that figure varies by housing market, according to an executive at RealtyTrac.com, which tracks foreclosures.  As foreclosures increase, the average price of homes in the neighborhood decreases.  To view  properties in various stages of foreclosure, including foreclosure filings, auctions, and bank repossessions, visit:

http://www.realtrytrac.com

•  Your  neighborhood’s  supply of homes for sale is also a good indicator. A supply of five to six months is considered “normal.” For the most extensive inventory level comparisons, you should contact a Realtor who specializes in your local neighborhood to provide a detailed analysis

• Following the list-to-sale-price ratios of your neighborhood can help determine the direction of home prices.   If the price difference is shrinking, that suggests the real estate market is improving.   Some real estate Web sites offer this information, or, once again, you can contact a local Realtor who can provide the average list-to-sales price ratio and a historical comparison for your neighborhood.

To read the full story, please click here:
http://www.smartmoney.com/personal-finance/real-estate/6-signs-your-home-will-increase-in-value/

When lenders do not receive payments, the first action taken by the lender is to report the missed payment to the credit bureaus by the first day of the next month. Sometimes this can happen in as little as two weeks from the due date, depending on when the payment is due. Generally, this action will leave a negative mark on a credit report and decrease the homeowner’s credit score by as much as 200 points.

Because of the negative mark on the homeowner’s credit report, within the next 30 days, homeowners can expect their other creditors to take note of the late payment and to take action. Credit card issuers may raise interest rates, lower credit limits, or close credit card accounts. The borrower’s auto insurance, student loans, and other forms of credit also may change, as these are tied to the borrower’s credit score as well.

If the homeowner does not pay for 90 days, the lender likely will start calling, trying to persuade the homeowner to enter into a loan modification. If a loan modification cannot be agreed upon between the homeowner and the lender, and the homeowner continues missing payments, the homeowner likely will be served with a foreclosure notice.

After the foreclosure notice is received, the lender asks a court to issue a
judgment against the homeowner, and a county sale is arranged.  Homeowners at risk of defaulting on their mortgages, or those who already are behind, should contact their lender immediately to work out a repayment plan and/or loan modification.

To read the full story, please click here:

http://www.modbee.com/business/story/913445.html

The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline.  First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500.  Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years.  The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively.  The purchase price of the home is capped at $800,000.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit, provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers.  According to C.A.R. research, nearly 40 percent of first-time home buyers surveyed said they would not have purchased a home without the federal tax credit, and approximately 70 percent said the tax credit was “the most important” or a “very important” factor in their decision to buy a home.

To read stories about the extension and expansion of this valuable home-buying incentive, please visit the following:

Aid for jobless, homebuyers clears Congress
To read the full story, please click here.

Congress Extends Jobless Benefits, Home-Buyer Credit
To read the full story, please click here.

Congress passes bill extending unemployment insurance, home buyer tax credit
To read the full story, please click here.

Piedmont: Called “the City of Millionaires” in the Roaring 20s because it contained more millionaires per square mile than any city in the U.S., Piedmont is still the upscale, desirable place to live in the near East Bay. With its architecturally classic homes, and the lovely tree-lined streets, Piedmont has the feel of a Midwestern town with the sophistication of the big city. Its stellar school system only adds to its allure.

Berkeley: Home of the University of California, Berkeley also has wonderful neighborhoods and attractions. From the winding streets of Thousand Oaks to the large, stately homes of the Claremont, from the spectacular views in the Berkeley hills to the charm of the Elmwood, Berkeley has it all. Do you want to ride a steam train? Try Tilden Park. Do you want to eat the freshest, most creatively prepared food anywhere? Reserve a table at Chez Panisse, birthplace of California cuisine. Try 4th Street for hip shopping, then splurge with a spa package from the Claremont Hotel. Berkeley’s charms will have you hooked.

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