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As printed in the OC Register / Saddleback Valley NewsWritten by Jim E. Flynn, Century 21 Beachside Realtors, Lake Mission Viejo
Sept. 11, 2009
Is the Real Estate market is really pulling out of the pit?
Q. Jack from Mission Viejo asked: I read where the Affordability Index for So. California was looking much better, so is it true that the Real Estate market is really pulling out of the pit?
A. Well Jack, I also read the Stats on the "AI" and according to Gary Twitchel, BofA. Sr. Lender who has long time experience in both L.A. and Orange counties, So. Ca. is pulling out of the pit earlier than most other areas of the country. He confirms that the "AI" is not only looking better but, is now the best in 21 years. Sales have been stronger and are expected to continue and that translates to property values going up quicker here. The unknown factor is the big buildup of possible default loans as 5 year ARMS - adjustable rate mortgages become due this next year. Last month there were 3,495 default loans in Orange county. So, even if the Affordability Index is the best in 21 years one of the big challenges Jack will be for appraisers to be able to justify and increase the appraisal values so buyers can obtain the needed loans for the increased home prices.
Q. Gina from San Clemente asked: Jim, what things can we do and what can we ask our Realtor/Broker to do to help shorten what we have heard is a long process for a short sale transaction ?
A. Good Question Gina. For a short sale transaction, the traditional 30, 45, or even 60 day Escrow closing time is a rare exception in today’s market. So, serious buyers like yourselves must first be prepared to quickly provide proof of funds if the transaction will be an All Cash deal or also include solid Pre-Approved lender documentation if not an all cash transaction.
One of the best checklist AI have seen for a successful short sale closing was provided by "Title Wave DAVE" Knox from Fidelity National Title. Their list recommended Realtors and their buyers review and monitor 6 items to help ensure a smooth closing:
Have the sellers filled a bankruptcy that is currently opened and needs to be addressed before closing?
Does the seller have any State liens, I.R.S. liens, or Judgments of record now or that may record during the transaction? (Such liens will stop a transaction)
Is there a trustee sale date already scheduled and if so is it being postponed past the closing date? (It is a myth that if you have a current demand that a sale has not taken place or will not take place before or at the same time as closing)
Is the short sale demand current and good through at least one day after the closing date?
Does title have enough funds to make the payoffs on the day of closing?
Title often does not have enough funds to make the payoffs on short sales and escrow should estimate and send funds the day BEFORE closing.And lastly Gina it is very important that you as buyers send in the Statement of Information ASAP for a smooth closing.
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Jim
Jim E. Flynn
CalBRE license #: 01215480
Phone: (949) 463-0739