How can you increase your chances of having your offer accepted by the bank who owns the foreclosure you want?
1. If possible, pay cash. Cash buyers are considered “gold” to the lender and have the strongest chance of being accepted. Unfortunately, this makes it very difficult for first time buyers and buyers with little down payment. But don’t let that discourage you, because things could fall in your favor. We have been able to get offers accepted for our first-time buyers.
2. If you need a loan, get pre-qualified for it before you try to make an offer. It’s absolutely necessary.
3. Be willing to offer more than the listed price. With this much competition, foreclosures are often selling for more than the listed price. Be realistic with your offer. Don’t expect to get a “deal” on the “deal” when you’ve got this much competition.
4. Find an agent who knows how to negotiate, who has experience with bank-owned properties, knows how to advise you, and be loyal. Here’s why: Real estate agents are trying to make a living just like everyone else. It makes sense that they are going to work hardest for those who they know are loyal to them as it means they will be compensated for their efforts.

Not sure how this will impact the number of foreclosures on the market. Inventory of foreclosed homes for sale in Santa Maria and throughout the Central Coast is low, although we keep hearing that there will be many more on the market soon.

If you are considering this option, be aware that new guidelines are coming into effect that makes it more difficult to purchase a home as a primary residence with the intention of keeping and renting an existing residence.  The reason behind the new guidelines is due to what is now referred to as “Buy and Bail.” It is becoming a huge problem and FHA, Fannie Mae and Freddie Mac are dedicated to putting a stop to it. Buy and Bail happens when a borrower purchases a new primary residence and then allows an existing home to go to foreclosure once escrow closes on the new residence. 

To reduce the number of “Buy and Bails”, lenders are requiring that:

•You will need to have a minimum of 30% equity in your existing home
•You will need a copy of your new Rental Agreement on your existing residence and a copy of the tenants deposit check
•You will need to demonstrate the capacity to repay and be current on any debt obligations.

What if you do not have 30% equity in your existing home but still wish to
purchase a new primary residence?
The good news is you can still purchase but you will need to:
•Provide a down payment. The amount depends on the particular loan program in which you are applying for.
•Be able to qualify for both payments. The existing payment and your new proposed payment.
•Have sufficient funds left in the bank as reserves for both properties.

Although certainly more stringent, these steps are needed to insure the long-term health of the real estate market and the long-term health of your investment.

Aimee Ritz,Town & Country Home Loans & Shea Hutchinson, Century 21 Hometown Realty

Condotels make great second or vacation homes while giving you the benefit of someone helping you make the payment.  They are not sold as a primary residence due to the fact that the owner’s usage is normally limited because each unit is expected to be included in the hotel’s inventory of rentable units.  But one of the great benefits of this type of unit is that it is maintained and rented out for you, just like any other room in a hotel.  You don’t have to worry about advertising, collecting rent, cleaning or any of the stress that normally goes with having a vacation rental.  As owner, you’ll receive a percentage of the revenue that is generated, so you’ll want to do your research to determine what amount of income you can realistically expect.

Some of the advantages of this type of ownership:

a) Rental revenue to offset some of your ownership expenses (in some cases maybe all your expenses.)
b) A worry-free vacation home in a great location.
c) Hassle free ownership; no landlord issues.
d) Own instead of rent.

Some disadvantages:
a) Pets may not be allowed.
b) Your unit is subject to the same trends in the real estate market that affect hotels.
c) Your unit may not always be available on short notice (but most manager’s will try to work with you).

We are fortunate to have two hotel/condotels on the Central Coast.  And remember location, location, and location when purchasing this kind of unit.  We have one condotel that sits right on the sand in Pismo Beach and one that is only one block from the water in Oceano.

If you are interested in finding out more about condo hotels on the Central Coast, well be glad to answer your questions and help you explore your options.

Nancy Tucker, Realtor Associate
HomesCentralCoast.com Team
   

If you’d like to read it, here’s the link:
Santa Maria house bought with no money down goes into foreclosure

I am in support of this bill and believe that it is good for the Santa Maria area, which currently has the most number of foreclosures and short sales on the Central Coast (and many more to come.)  There are many home owners who have shown responsible decision making regarding their finances and who were simply victims of bad timing when they purchased their home.  I believe these homeowners deserve to own a property at a value that someone else would pay if it were sold in today’s market. 

Making provisions that allow financially strained homeowners to keep their homes is good for our community and neighborhoods.  Most distressed properties are left vacant, leaving yards and other features without care.  Instead of turning Santa Maria neighborhoods into ghost towns, this bill could be the “second chance” that many need to help boast confidence and restore pride in home ownership.

Looking at the statistics on the Central Coast Multiple Listing Service (MLS) – As of today, there were 961 total properties (for sale and in escrow) that were on the market in the Santa Maria/Orcutt area.  Of those, 685, or 71.2% were either pre-foreclosure or bank-owned properties.