Nevada City Virtual Tour

Friday, January 27, 2012



The Governor signed AB 29 of the First Extraordinary Session (ABX1 29) into law on July 7, 2011. ABX1 29 imposes a $150 annual wildfire protection fee per habitable structure for property owners in the State Responsibility Areas (SRA). SRA lands cover about 31 million acres in 56 counties, and include an estimated 1.1 million to 1.5 million individual parcels, and approximately 800,000 habitable structures. Public Resources Code Section 4210 provides a legislative finding and declaration that the presence of structures within the SRA can pose an increased risk of fire ignition and an increased potential for fire damage within the state's wildlands and watersheds and that the costs of fire prevention activities should be borne by the owners of these structures.

The State Board of Equalization (BOE) is required to annually assess and collect the fee from property owners on behalf of the California Department of Forestry and Fire Protection (CDF) in accordance with the Fee Collection Procedures Law. CDF is responsible for providing the BOE with a list of property owners who are liable for the fire prevention fee, and the amount to be assessed. However, the BOE is currently waiting to receive funding from the State of California in order to begin its collection duties, so the BOE has not yet finalized its method for the billing procedure of the Fire Prevention Fee.

Thursday, January 26, 2012

Fed's Housing Fix?

Does Fed's Housing Fix Means Everyone Loses?

The Federal Reserve Chairman Ben Bernanke on Wednesday proposed policies that would force a recovery in housing, but cautioned that there was no single solution to the housing market's problems and that everyone from investors to taxpayers would need to feel the pain.
In a 26-page white paper, the Fed outlined ways to ease some of the pressures afflicting the housing market.

While some of the weakness was due to weak labor market conditions and poor demand, policies that would address the excess inventory of foreclosed homes, borrower access to mortgage credit and inefficient foreclosure procedures should be considered, the central bank said.

The large inventory of foreclosed or surrendered properties is contributing to excess supply in the for-sale market, placing downward pressure on house prices and exacerbating the loss in aggregate housing wealth. At the same time, rental markets are strengthening in some areas of the country, reflecting in part a decline in the homeownership rate," the paper noted.  
"Reducing some of the barriers to converting foreclosed properties to rental units will help redeploy the existing stock of houses in a more efficient way. Such conversions might also increase lenders' eventual recoveries on foreclosed and surrendered properties."

The regulator is considering issuing guidance to banking organizations and examiners to clarify supervisory expectations regarding rental of residential REO properties by such organizations while such circumstances continue (and within relevant federal and statutory and regulatory limits).

As of September 2011, U.S. commercial banks had $10 billion in residential REO properties on their balance sheets, while savings and loans had an additional $1.4 billion. But serviced-for-others REO portfolios managed by banking organizations are significantly larger than their owned portfolios.

The Fed also suggested that banks actively consider alternatives to foreclosures such as deeds-in-lieu of foreclosure or more and EASIER short sales, which can help reduce transaction costs and minimize negative effects on communities.  

The central bank warned that failure to take action would mean the adjustment process in the housing market will take longer adding to "deadweight" losses, pushing house prices lower and prolonging the downward pressure on the wealth of current homeowners and the resultant drag on the economy at large.

Tuesday, January 24, 2012

Government Foreclosure to Rental Plan Being Worked On

The White House is close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals.  

The Federal Reserve, Treasury, HUD, Fannie Mae and Freddie Mac are working out details of the plan, including what the pricing for such a sale would be, the government's role in the plan and identifying those with the operational experience to manage such properties, according to the report.  

The policy aims at reducing the foreclosure supply in the market.

Banks repossessed fewer homes in 2011, but much of the slowdown was because of foreclosure processing delays. The recent spike in "default filings" points to a fresh wave in foreclosures in 2012, which could hold prices down further. The number of properties in the foreclosure pipeline is more than four times the number of REO -- or real estate owned properties -- for which foreclosure processing has been completed, according to the Fed.

Families who have lost their homes to foreclosure also tend to move to single-family rentals, so a proposal to convert foreclosures to rentals will also make sense.

Investors have been snapping up foreclosed properties at bargain prices and converting them into rental units, but large-scale conversions have not taken place.

For one, investors are willing to buy bulk properties only at significant large discounts, partly because they are unable to get debt financing for such transactions. Mortgages are available for individual one-to-four family homes and multi-family units but not for a portfolio of single-family homes.

Bank Owners of foreclosed properties worry that selling in bulk will affect their recoveries.  
The Fed expects that providing investors with some sort of debt financing will improve the prices investors are willing to offer for the bulk properties and is debating whether such financing should be subsidized.
Banks are generally not allowed to engage in real estate property ownership or management and guidelines call for disposal of properties as soon as possible.

Still, recognizing the realities of the current market, banks have been allowed to rent properties directly or through third party vendors so long as they show good -faith efforts to sell the property. 

Finally, as the Fed itself acknowledges, not all foreclosed homes are suitable for rent because of their condition, their location or because rental cash flow might not provide adequate compensation for the cost of the property.

Still, compared to a tax credit, which has only a temporary impact, an REO-to-rental program might have a more "lasting effect" and could alleviate concerns about the effect of "shadow inventory" on the housing market over the next couple of years, the analysts said.

Could be helpful.... Or not.... depending on the buffoons implementing this..... IMHO

Saturday, January 21, 2012

Bay Area, Silicon Valley, San Francisco, Real Estate, House Price, and Mortgage Blog - Burbed

Hilarious Real Estate Blog that shows how agents and homes are marketed. Poorly....

Bay Area, Silicon Valley, San Francisco, Real Estate, House Price, and Mortgage Blog - Burbed

Wednesday, January 18, 2012

Simple Guide to Short Sales

Simple Guide to Short Sales

What is a Short Sale?

Recently, the "Short Sale" has become a mainstream way of buying and selling real estate throughout the Grass Valley area and beyond. Simply put, a Short Sale is a real estate transaction that is put together by the buyer and seller and presented, for approval, to the seller's mortgage holder. Due to financial hardship, the seller is unable to make payments to that lender. The lender is entitled to approve this type of sale since they may potentially suffer a financial loss.

Additionally, for a Short Sale to take place, the seller's primary residence must have fallen in value to less than the amount the seller currently owes to the lender. This is also referred to as being "upside down" on a mortgage. The negotiated selling price of the property will reflect that lower value.

How it Works

A Short Sale transaction is unique and involved in that the seller and buyer, with assistance from their brokers, actually collaborate on a Proposal that the buyer will present to the seller's financial institution. Generally, the lender is not contacted until the proposal is complete. Loss Mitigation and Resource Recovery Departments currently receive more proposals than they can handle. Those with insufficient information or inadequate offers are ignored. Here's where the knowledge of an experienced real estate broker becomes absolutely necessary.

Fair Market Value

The property can be a "bargain", and the proposal might request that the lender consider a price that's lower than what the seller originally paid. However, in order to satisfy the seller's lender, the current asking price should fall within the range of the property's "fair market value" . Fair Market Value is determined using several factors. Negotiating a property's current value can include comparable neighborhood sales, knowledge of the property's marketing history, appraised value, and thorough knowledge of any maintenance and/or structural issues.

As-Is Property

A Short Sale is an "as-is" purchase. This relieves the seller of any additional expense that could become apparent through inspections. If renovations or repairs are necessary they should be fully documented. A capable buyer may find these issues are beneficial in price negotiations with the seller's lender. A buyer who must depend on hired renovators should carefully consider the property's condition.

Is a Short Sale Right for You?

The experience of a broker comes into play in determining whether a particular Short Sale should be pursued. A seller who owns multiple properties may not be eligible for this type of sale. Buyers interested in a quick sale, may want to concentrate effort on "approved" (price is already set by the lender) Short Sales. A singly financed property will be more easily negotiated than one with multiple lien holders or equity lines of credit. A broker can also determine whether the amount of equity a seller has in the property will become fruitless or advantageous in working with the lender. Completing a thorough title search is necessary.

Lenders Make the Final Call

Every financial institution has an independent philosophy of what constitutes a reasonable Short Sale offer. Knowledgeable brokers will assist the seller and buyer in determining down payment, price, and whether a cash offer is beneficial to their proposal.
The buyer's broker will need to be especially attuned to the time restraints of arranging financing. Escrow closing dates, as short as 20 days, are determined by the lender, and are rarely extended. Because of this, all financing must be in place, early on, in negotiations. Both parties must be ready to move when the seller's lender approves the Short Sale.
Generally, the lender forgives the seller for the difference between the mortgage owed and the selling price, and assumes the loss. The advantage to the lender comes in recouping funds from that sale and thereby making them available for other lending opportunities. Also, the lender avoids Foreclosure and the subsequent responsibility for maintenance and sale of the property. But, it is the responsibility of the seller and buyer to convince the lender that their Short Sale Proposal is a win-win situation for all parties involved.
The seller should make sure their broker is familiar with the Mortgage Forgiveness Debt Relief Act of 2007 that will most likely relieve the seller from taxes due on the difference between a property's sold price and amount owed.

How Grass Valley's Alternative Realtor - Gary Tippner - Can Help You

A Short Sale, while do-able, is a complex real estate transaction. Gary Tippner is sensitive to the needs of sellers and buyers in this unpredictable, evolving real estate format. His team takes pride in having researched and educated ourselves so that we provide the best guidance and creative opportunities available to Short Sale home sellers and buyers in Sacramento County, Nevada County and Placer County.
We offer no-obligation, no-pressure advice. To speak with a broker about Short Sales, We invite you to schedule a consultation.

Request a Short Sale Consultation

email Gary Tippner at callgarytoday @

Monday, January 16, 2012

Should You Hire a Lawyer or Real Estate Agent

Although the commission is usually paid by the seller, the cost may be indirectly passed on to you. And real estate lawyers charge exorbitant hourly rates.

This raises the question -- do you need a real estate agent or attorney to help you buy a home?

What the Law Says
Every state has its own set of real estate laws. For the most part, a real estate agent's help is not legally required, though agents can help you with tasks that border on legal ones, such as preparing a home purchase contract. In some states, however, only a lawyer is allowed to prepare the home purchase documents, perform a title search, and close the deal.

Reasons to Hire an Agent
The process of buying a house is complex, and most people find it's easiest to get through with an agent by their side. Paperwork will be flying around like a small tornado, and it can be helpful to have someone familiar with the process to deal with it. Other parts of the transaction will be happening quickly too -- hiring inspectors, negotiating over who pays for needed repairs, keeping up good relations with the sellers (through their agent) and more. All of this is second nature to an experienced agent. What's more, experienced real estate agents usually have contacts with good inspectors, mortgage loan brokers, and others who can make your buying process easier. And they know what's considered appropriate behavior and practice in your geographical area.

Don't Use the Seller's Agent
One of the best reasons to hire a real estate agent is that the sellers are likely to use their own agent -- and you want to keep that agent from taking over the process. In fact, the seller's agent may pressure you to let him or her represent both of you, in a "dual agency" relationship that primarily benefits the seller. (The less scrupulous sellers' agents don't make it clear that they're working for both people, but if only one agent is involved in your transaction, it's fair to assume that the agent's loyalties are with the seller.) It's better to have your own agent than settle for dual agency.

Keep Control Over the Process
You're the only one who really knows what you want in a house. Even if your agent is scouting out homes for you, there's a lot to be said for scanning the listings and attending open houses yourself. You may find out that your agent doesn't understand your needs as well as you thought.

Educate Yourself
Even if you do use an agent (or a lawyer), it's wise to learn as much as you can about the home-buying process. For example, educating yourself about the market value of comparable homes in the area will protect you against over-aggressive agents who might urge you to bid high for a particular house. And you'll prevent misunderstandings and reduce the stress of being told to "sign here" if you study the contents of the various real estate documents in advance.

Reasons to Hire an Attorney
Except in states where it's mandated, an ordinary real estate transaction doesn't require an attorney's help. By now, real estate transactions are so standardized that most people in your state will use the exact same purchase contract, just filling in a few blanks.

However, if legal issues arise that your real estate agent can't answer, you'll need an attorney's help. Although good agents know a lot about the negotiating and contracting part of the process, they can't make ANY judgments on legal questions. For example, what if your prospective new home has an illegal in-law unit with an existing tenant whom you want to evict in order to rent the place to a friend? Only a lawyer can tell you with any certainty whether your plans are feasible. Or, if you're drafting any unusual language for the purchase contract, or are concerned about some language in your mortgage, you may want to have an attorney look the documents over.

Real estate agents normally work on commission, not salary. They receive their slice only after your home search is over, the contract negotiated, and the transaction complete. (In many cases, they end up doing a lot of work for nothing, perhaps because the buyers lost interest or can't close the deal.)
The seller typically pays the commission to both the seller's agent and your agent -- usually around 6% of the sales price, to be split between the two agents. This percentage isn't cast in stone, however. For example, the seller might negotiate the percentage down if the house is particularly expensive. (And in probate sales, the court sets the commission.) Some buyers' agents have even been known to offer the buyer a percentage of their commission at closing.

Agents paid on commission have a built-in conflict of interest
Even an agent who represents only you, and not the seller, has a financial interest in seeing the deal go through. While experienced, reputable agents won't let this interfere with their advice to you, it may cause less scrupulous agents to insist that you'll never get the house unless you bid high, to recommend home inspectors who make light of potential problems, or to otherwise compromise your interests.
I always tell it like it is.

How Attorneys Are Paid
Attorneys normally charge by the hour, at rates ranging from $150 to $350. You may also find attorneys who charge flat fees for specific services, such as preparing real estate closing documents. Although attorneys tend to prefer handling the entire case with a "blank check" from you regarding hours to be spent and tasks to be accomplished, you're hiring the attorney, and you can call the shots. If you prefer to hire an attorney for only a limited number of hours, or for specific tasks, such as answering a legal question or reviewing a document, you can negotiate this (and you should record your agreement in writing).

Please contact Gary Tippner for help at callgarytoday @

Saturday, January 14, 2012

Housing's Huge Supply and Demand Imbalance

Housing's Huge Supply and Demand Imbalance

"Pent-up demand."

That is the rallying cry of the housing bulls, as they forecast the great recovery of 2012. So many potential buyers are doubled up with family, stuck in undesirable rentals or just plain afraid to put their current home on the market, but that's about to change, say these optimistic prognosticators.  

Pent-up demand exists, no question, but it has nowhere to go right now for the vast majority of organic home buyers. When I say organic, I'm excluding investors from the mix, because that demand is high and building up cash like mad. I mean regular lower to upper middle-class Americans still struggling in today's rough economy.

"There are relatively few borrowers that can qualify for a mortgage given today's tight lending standards,"  "Aside from FHA and VA mortgage, you need 20% down, and that's very, very difficult for most borrowers."  

There is more distress in the housing market than some of the leading mortgage data providers portray. There might be eight to ten million more foreclosures over the next six years, because of borrowers currently in mortgage modifications.  

That includes borrowers who have never missed a payment before, but are deeply underwater and are apt to default because borrowers just like them are defaulting on a regular basis.

Plus household formation has been running very low of late, just 5-800,000 a year. A normal level is 1.1 to 1.2 million units a year.

The only way to re-balance supply and demand is to get investors into the market in force to buy up these properties and meet the huge rental demand that will continue for several years. Hedge funds are busy working on deals, but I think government needs to help guide if hedge funds are involved. Fannie Mae and Freddie Mac are currently sitting on a huge supply of foreclosed properties and facing even more down the pike.  

Thursday, January 12, 2012

Will Low Mortgage Rates Stop Foreclosure Wave?

I don't think low mortgage Rates will stop the foreclosure wave. 

Mortgage rates remained amazingly low for 2011, but that won't stop a coming wave of foreclosures in 2012.

Mortgage rates finished near all-time historic lows in 2011. Freddie Mac on Thursday released the results of its Primary Mortgage Market Survey. The 30-year fixed rate mortgage rate ended 2011 with an average 3.95% for the week ending Dec.29, 2011, up from the previous week's rate of 3.91 % but significantly lower than the 4.86% averaged in the year-ago period.

The 15-year fixed-rate mortgage averaged 3.24%, up from 3.21%, but lower than the 4.20% averaged a year earlier.

 Looking ahead, Freddie Mac economists expects mortgage rates to remain very low at least through mid-2012, as the Federal Reserve has indicated that it will keep the federal funds rate near zero till as late as mid-2013.

 They do expect housing prices to bottom in the later part of 2012. Sales volume is still low, even given the strong current affordability of housing. And ample distressed sales and sluggish home-buying demand will continue to keep prices soft in many markets: Expect U.S. house-price indexes to move lower before bottoming out in 2012, with modest appreciation forestalled until 2013."

With rents climbing and housing affordability remaining at its best level in years, some economists are predicting that buyers who have stayed on the sidelines will return to the market in 2012. Hedge funds are beginning to bet on a recovery in the housing market, the Wall Street Journal reported on Thursday.

Meanwhile, pending home sales, a forward looking indicator of existing home-sales activity showed signs of improvement, increasing 7.3% on a monthly basis to 100.1 in November, its highest level in 19 months. But there also is a higher than normal amount of cancellations before escrow finalizes.

Still, the biggest overhang for the housing market remains the significant foreclosure inventory that is yet to be cleared from the market as well as "shadow" inventory- properties that will ultimately wind up in foreclosure.
One in every 579 housing units received a foreclosure filing in November 2011, according to RealtyTrac. Overall foreclosure activity dropped 3% in November from the previous month, but a new wave of foreclosures could be coming in 2012.

 Bank of America, JPMorgan Chase, and Wells Fargo together account for more than 60% of the first mortgages in the country.
The three are among the big mortgage servicers that have been in year-long negotiations with federal regulators and the state attorneys general to reach a settlement over alleged improper foreclosure practices including robo-signing.

The robo-signing controversy and the ongoing negotiations have stalled the foreclosure process for banks. However, analysts maintain that banks need to clear their foreclosure inventory soon for housing values to fully correct and then make a stable recovery.

Bank of America has the most troubled mortgage portfolio. Real estate owned and repossessed assets amounted to over $2.6 billion in the first 9 months of 2011.

Tuesday, January 10, 2012

Gary's Predictions for Real Estate in 2012

These are my opinions....  At least I don't sugar coat like others.  I am always upfront with people.
These are based on national data. Your location might do worse or better. I hope better. Nevada County, Placer County, CA and Olympia, WA are desirable areas.

Home prices will fall another 5% through Q2 before bottoming toward year's end.
Prices are already on a downward trajectory, as foreclosure inventories rise. Banks/mortgage servicers are finally working through a huge backlog of delinquent loans, and as those distressed properties come to market, they will consequently lower home prices. With lower conforming-loan levels, as well as a tight lending environment and the possibility of rising mortgage rates, prices will bottom out in the fall.

Foreclosure inventories will rise while new delinquencies remain elevated.
 Inventories will continue to rise, as around three million distressed properties progress to final bank repossession. Banks will likely ramp up the process following the usual holiday slowdown, especially given positive rulings on the MERS front (the auto recorder for so so so many loans for years), and judicial states lifting their moratoria. Foreclosures will come quickly through the winter and spring months then abate toward year's end. The downward pressure on overall home prices will put more borrowers underwater and in turn keep delinquencies elevated, although not much higher than now. 

Rents will rise, as will rental occupancy rates.
Until the employment market really starts cooking, young employees and potential first-time home buyers will remain on the sidelines, waiting for home prices to bottom. That means continued high demand for rental apartments, especially in higher-priced markets. The big question is: When do rents get too high vs. the cost of home ownership and push people back to buying?

Housing starts to be a tale of two markets.
Single-family home building will struggle to stay above a 600,000-unit annualized pace, as builders continue to compete with foreclosed properties. Slight improvement in demand will keep them going, but not by much. Meanwhile, the minimal supply of multi-family apartment buildings will keep investors pouring money into new construction. Builders will respond with increased multi-family starts, not just in trophy markets, but also mid-sized ones where inventories are lower.

Inventories of homes for sale hit a new high this spring.
 They did bounce way up, from a 7.5-month supply in January to a 9.5-month supply in July, but didn't hit a new record. We had no way of knowing the robo-signing foreclosure paperwork scandal would bring foreclosure numbers down so far for so long.

The office and apartment sectors will gain again.
 In office, occupied stock rose in every quarter through Q3, the vacancy rate declined and effective rent was all in positive gains. The apartment sector is on fire, with rents rising every quarter and vacancies falling to a 2006 low.

Spring will tell.
 The season was muted -- at best. Sales didn't surge, nor did they plummet. The robo-signing foreclosure issues really skewed the numbers, as well as damaged consumer sentiment. Home prices gained seasonally, slightly, but fell back again. The tight mortgage market, along with appraisal accuracy issues, plagued real growth.

Just the facts. What agent is going to tell you the real truth? I am one of the few. Other agents may find me negative but someone has to be looking at all the data and tell the truth to others and stop sugarcoating.
But what some find to be bad news may simply find relief in having less uncertainty. While others can gain from information because they will know what to do. And some will really gain because they see opportunity.
Wanna talk? Just email me right now at callgarytoday @

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