Home Tours

http://www.bakersfield.com/...

In the Bakersfield Californian, there was a story about home tours. That is where an agent rents a bus or van and then takes a group of buyers out to look at houses. I have noticed a lot of activity lately, with buyers out there looking for bargains. Some are waiting to see when the market hits the bottom, but others are out there now, getting great deals, and having a lot of options to choose from, with so many houses on the market now.

I am reminded of the joke about, "No one goes downtown anymore. It's too crowded." We are seeing multiple offers now, mostly on aggresively priced REOs, but still. Multiple offers. There is a lot of demand in the $200-$250 range, and I would expect that is because they are first time home buyers who don't have to worry about selling their own house first. I wouldn't be surprised if the low listing price was used as a strategy. It looks like a great deal, so it gets multiple offers, and the price gets bid up, much like what happens in an auction. They end up paying more for the house than other houses that were originally listed higher.

Stock Market Tumble

http://www.latimes.com/busi...

Here is an article from the LA Times about the stock market tumble, I think as a reaction to the news about Bear & Stearns being sold at fire sale prices. The stock market is up, then down, then back up. It is like a roller coaster. Same thing with the mortgage rates. For the most part, the rates if graphed would be a soft curve, but lately, it looks like a roller coaster. Up and down, a jagged lightning bolt--some days they couldn't even set a rate, it was all in a state of flux. This is a highly unusual market.

Sub-prime mortgage watchdogs kept on leash

http://www.latimes.com/busi...

Here is another story from the LA Times, about the sub-prime watchdogs. It seems that the lenders weren't interested in hearing about potential problems coming down the pipeline. No wonder we are in such a mess now. This is a pretty good article if you are interested in hearing about how we have gotten ourselves into this situation.

Notes from a foreclosure auction

http://latimesblogs.latimes...

Here is a blog from the LA Times about what goes on at a foreclosure auction. Some of our REO listings are offered at these auctions, but I have heard that you might win the auction, and think you have a house, but the banks won't approve it, and will counter offer. This doesn't seem fair, if they only sell the houses that are market value or over bid. The whole point of an auction is to get a great deal.

A lot of the REO listings that went to these auctions didn't sell, and were back on the market a month later. Also, if they did sell at the auction, the commission paid to the sales agent was so small that it wouldn't be worth it. But that isn't a concern to the sort of person looking for a deal at one of these auctions. Just don't expect a Real Estate Agent to help you with it. You might think I am just talking it down because of self interest, but while sitting an open house for one of these auction properties, an investor came and told me that he had put in a low bid, the highest bid, so he should have gotten it, but then the bank backed out. Now, if he had gone overboard, swept up in "auction fever" and bid too much, they would have held him to it. In the case I was told about, it was a bid of $100,000 on a property that was listed at $160,000.

Bidding for a bargain on the foreclosure auction block

http://www.latimes.com/busi...

Here is a related story in the LA Times about the old auction block.

Finally, I just want to say that FHA Loans are looking better these days. Some lenders don't like to do them because of the extra work involved, but they offer a lot of advantages to the borrower. FHA loans have changed, and a lot of the reasons why people disliked them are no longer true.

If your credit score is not so high, and if you have a high debt to income ratio, and if you need some assistance with the down payment, then FHA might be the loan for you. Anyway, consider it as an option, and if your lender bad mouths it, it could be because they are not set up to do FHA loans. There is still some extra work and forms required, but if you get a lender who knows how to do FHA loans, they could have a lot of benefits for you, the borrower.

There are also some great VA loans out there for you veterans!