Blog – Page 349 – Parsons Realty

Redding Home Prices – How Much is My Home Worth?

One of the most-asked questions we get is how much are homes selling for in Redding? As REALTORS we use a series of steps in determining a home’s value. One of the steps involves checking the recent sales price of similar homes, also known as comps or comparables. If you’re curious about the value of your home you can do a quick check yourself right now.

You can use sales data provided by www.Zillow.com to verify recently sold homes in your area (ideally, within 3-6 months) that are similar to yours. If you plan on selling your home, comparables are a critical piece of the puzzle when figuring out how to price your home for sale. If you would like to verify the number you come up with you’re welcome to contact Parsons Realty for the most recent home sales data in Redding and Shasta County.

The best sales data is always obtained through a REALTOR using the local MLS data. However, for a quick check you may find Zillow.com quite useful. Zillow offers “nearby similar sales” to a home, but you can take this list and create your own set of comparables. For a tutorial on how to use Zillow for this purpose check out the video here.

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VA Loans – Allowable and Non-Allowable Fees

Within the last 10 or more years, VA Loans have become more profitable and have facilitated the purchase homes by veterans. In some cases, without the VA loan certain veterans would still be renters and not homeowners. Since 2007 VA and FHA Loans have gone main stream and are providing the financing of or financial recovery. Unlike conventional loans, VA loans have certain fees that cannot be paid by the borrower. In the lending business they fees are often referred to as “allowable” and “non-allowable” fees. In this blog post I will attempt to clear-up some of the confusion surrounding VA loans.

As you may know, borrowing money cost money; not only the interest and repayment of the debt but the cost of obtaining the loan. There’s work involved when processing a loan and the cost for this work or service is referred to as “loan fees.” The Department of Veterans Affairs determines what closing costs the veteran (borrower) is allowed to pay. The local VA office determines the allowable costs based on local custom. Therefore, allowable costs may be different in different states. The VA provides lending guidelines which cover the fee names and categories. However, due to regional differences they don’t cover them all.

After an escrow is opened your mortgage broker or lender will send a request to escrow for an estimated HUD1 statement. A VA loan is backed by the full faith and credit of the United States Government. Because it is tied to Government money, federal bureaucrats decided which fees the borrower can pay and which fees must be paid by someone else. Among other things, the HUD clearly defines the fees associated with the transaction and allocates the fees to the borrower or someone else.

The rules become a little more complicated if the loan is being originated by a Mortgage Broker and not a direct lender. For example, if the Mortgage Broker is charging an “Origination Fee”, the Mortgage Broker is required to credit the Buyer/Borrower for all non-allowable fees.

Since all of the fees are in a sense a “hot potato” be certain your real estate agent or attorney clearly stipulates the allocation of fees in the Purchase Agreement. Otherwise, your loan and escrow could blow-up halfway through escrow. Not fun.

Let’s get to the point, what are VA non-allowable fees?

Document preparation
Loan closing or settlement(escrow)
Attorney services for anything other than title work
Preparing loan papers for conveyance
Locking in interest rate services
Mailing or postage charges, telephone calls, amortization schedules, general overhead
Escrow charges

Document preparation, notary, loan application, processing, loan broker fee other than your mortgage company, trustee’s fees or charges and tax service.

To obtain a copy of a more complete list of allowable and non-allowable closing costs please click here; VA list of fees

When making purchase offers using a VA loan you may find a seller will bypass your offer for another or, flat out reject your offer. This could happen if the seller has already reduced the price of their property to their bottom line. Accepting an offer with a VA loan contingency means the seller would end up paying most, if not all of the non-allowable costs. Contrary to popular belief, the seller has no obligation to pay the buyer’s/borrower’s non-allowable costs. The seller can decline your purchase offer all together or offer to pay a portion of the closing costs with other parties to the transaction picking up the difference. Sometimes the mortgage broker and real estate agents will decide to pay a portion of your closing costs. In summary, as long as a party to the transaction other than the buyer pays the fees, the loan can go through and escrow can close.

There are several strategies you can use when writing offer using a VA loan. A good real estate agent or broker will guide you through the process of writing offers that seller’s may not like but will be afraid to reject.

December 2010 Home Sales Redding & Shasta County

Home sales in Redding and Shasta County jumped quit a bit from last month. This is pretty typical for November and December. In November there were a total of 161 homes sold in Shasta County, and in December we had 196 homes sold. That is quite a jump, however that number is pretty close to December of 2009 which had a 200 homes sold in Shasta County.

We have been noticing a definite pickup in buyer traffic to the websites and more sign calls. Hopefully this trend will continue through the winter.

In the city of Redding there were a total of 114 home sold and an average sales price of $202,599. That is down from the average sales price of $231,624 in December 2009.

The average sales price for all homes in Shasta County for the month of December 2010 was $196,749, this is also down from last year’s average price of $208,158.

Inventory continues to drop as well, as of today there are 1,276 homes on the market. This time last month we were hovering around the 1,350 mark. The drop in inventory is normal for this time of year, however we have not been below 1,300 homes for quit some time.

Now that the holidays are over we expect that inventory will stay steady and probably creep up a bit. There were a total of 215 home listings that were posted to the Shasta County MLS in December. That is the same number as November .

Foreclosures continue to be a big percentage of the sales in the Redding area. According to a report from Foreclosure Radar, there are 732 homes that have been foreclosed, some are on the market and some are in the process of coming on the market. The other interesting number in the report is the homes scheduled for foreclosure sale, there are 457 homes scheduled for sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale canceled.

Selling Your Home? Don’t Make This Mistake

I’ll get right to the point. There’s only one reason a home doesn’t sell. It’s priced wrong! That is, the price is too high.

So, how does one come up with the correct price? Most people start by calling several REALTORS. Each REALTOR prepares a comprehensive Market Analysis and they each recommend a specific sales price.

Many times a couple of the REALTORS will have similar prices that you may not be too happy with. Your home must certainly be worth more and you suspect the REALTORS are low-balling your home for an easy sale. Then there’s the third REALTOR with a much more pleasing number. Now this person seems to know what they’re doing. In fact their number is very close to what you anticipated. Finally, you found your expert.

The question is, which REALTOR do you choose?

If you’re like many people, you’ll choose the REALTOR with the highest price estimate. This is the agent that’s really listening to you. Why not start out with a price that has some wiggle room. This way, you can drop the price later on if you need to. After all, this is what most sellers do isn’t it?

If you think this is good logic, think again. Putting your home on the market at too high a price can actually net you less money in the end. Here’s why: With a correctly priced home, the first few weeks on the market is when you’ll see the most activity. Buyers and their agents will be checking out the new inventory (your house.)

If your house is overpriced few prospects, if any, will be looking at your home. It’s not likely you’ll be able to convince the other agents in the community that your home should somehow be worth more than comparable homes in the neighborhood. Remember, the agents representing the buyers are professional home buyers and they know local market conditions, this is what they do every day. If your house is overpriced they will not waste their time showing it. Furthermore, they don’t want to risk hurting their credibility with their coveted buyer. Their time is better spent showing homes that are priced realistically.

By the time you realize the problem and you’re done testing the market, you may decide to drop your price. At this point you are usually too late as your house is “old news.” It’s rare you will ever recapture that flurry of initial activity you would have had with a realistic price.

In another scenario, let’s say you do find a buyer willing to pay your price because they love your home as much as you do. Generally speaking, the buyer will need to obtain a purchase money loan. The lender requires an independent appraisal of value before the loan is made to the buyer. If comparable sales and current market conditions don’t support your sales price, the house won’t appraise and your deal will fall apart. Of course you can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could go “back on the market.”

Should your home fall out of escrow or if you’ve been waiting for an offer for the last 60 days or more, it will be much harder to get a good offer. Potential buyers and real estate agents will think you may be getting desperate and may make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you may have received otherwise.

In conclusion, going with the REALTOR that suggested the highest listing price is a very human mistake based on hope. It’s only natural to hope for the highest and best offer when selling your home. To avoid this mistake, set an appointment to sit down with the real estate agent of your choice and actually view the multiple listing data and competing properties currently on the market. You will most likely go to the agent’s office and view the Shasta County MLS data directly from the agent’s computer. This will take an hour or more of your time but will pay off with a faster sale at the highest possible price. As with most things in life, trust but verify.

Which States Have The Longest Foreclosure Process

Once a home owner falls into foreclosure, the eviction doesn’t happen right away — in fact, it may take years before delinquent borrowers finally have to turn over their keys.

Data by LPS Applied Analytics shows that New York holds the longest average in the nation–mortgage loans in the foreclosure process in New York have been delinquent for 600 days on average.

Loans in foreclosure in Florida, New Jersey, Hawaii, and Maine have been delinquent for an average of more than 500 days. Close behind, California and Nevada’s home loans have been delinquent for 461 and 427 days.

Meanwhile, Nebraska and Wyoming were found to be the two speediest states — loans in the foreclosure process are delinquent by an average of 358 days.

What’s causing the long wait? Some states that use a judicial process have backlogged courts. Florida, which has some of the highest numbers of foreclosures in the country, has had to set up separate courts and bring in retired judges to help handle the skyrocketing foreclosure cases.

Government officials and agencies also cause foreclosure delays through temporary moratoriums, mandatory mediation sessions, and loan modification or assistance programs, experts say.

Plus, mortgage servicers may even cause delays, not wanting to take on the legal and financial responsibilities of owning any more homes.

“Foreclosure typically isn’t making a profit, it’s minimizing a loss,” says Rick Sharga, senior vice president at Realty Trac. “It’s hard to get the (investors) who own the notes excited about spending more money to execute a foreclosure. Ironically, the longer these things take, the more it costs.”

Source: “Foreclosure Process Moves at Snail’s Pace,” The Oakland Tribune (Jan. 2, 2011)

Shasta County Home Sales For November 2010

Shasta County Home Sales Chart Nov 2010 — Shasta County Homes Sales & Inventory Chart Nov 2010

Shasta County home sales were down when compared to the same time last year. In November 2010 there were a total of 160 homes sold in the Shasta County MLS, that is down from the 172 homes that sold in November last year.

In the city of Redding there were a total of 86 home sold and an average sales price of $225,000. That is down from the average sales price of $235,000 in November 2009.

The average sales price for all of Shasta County in November 2010 was $208,000, this is also down from last year’s average price of $210,000.

Inventory has been dropping as well, as of today there are 1,352 homes on the market. The drop in inventory is fairly normal for this time of year however, we have not been below 1,400 homes in quite some time.

REO’s and short sales are still a large percentage of the homes that are selling, 50% to be exact. We had a total of 66 REO’s and 14 short sales sold last month. That is a larger percentage of the total sales than the same month last year. November 2009 had 57 REO’s and 21 short sales close escrow making distress sales 45% of the total sales.

One would guess that inventory will continue to drop until after the New Year, most people are not going to be putting their homes on the market during the holidays. With the number of homes taken back by the banks continuing to decline (only 68 in November compared to the average of 98 over the last four months) we expect inventory stay around 1,400 until at least spring. Hopefully this will be some good news for home sellers.