New Solution: e-Signature The e-Signature has been in place for ten years, but it was not widely known or used. That has all changed now, as the California Association of Realtors has made one of the two main providers of e-Signatures available statewide to all its realtors (ziplogix Digital Ink). Most of the biggest brokerages have endorsed it: Coldwell Banker, Century 21, Re/Max, etc. Now signing a new document is as easy as: sign in, approve and click. The best part of all, you don't need to be at home. This can be done from anywhere you have access to a computer, including on vacation, one of the most common challenges for people in the process of buying or selling a home. So now it will be faster and easier for you to sign and you'll have better protection of confidential information. There will be fewer mistakes requiring corrections. In some cases this will lead to a faster closing. And best of all, you can avoid driving, faxing, printing out and the costs associated with those previously necessary activities. Realtors need to be trained in this, so be sure to ask about it when interviewing your realtor. Here's more about it from RISMedia
What Are the Banks Doing? Most news reports show that the big banks are not cooperating with the HAFA program and are still very reluctantly cooperating in short sales. Therefore they allow properties to go to foreclosure. Some experts have claimed that on average it costs the banks between $30,000 and $50,000 more to foreclose on a property than to accept a short sell. Then we sometimes hear that the banks are after the property or are out to get the little guy. This is not credible because most banks are publicly owned and must answer to a board of directors, as well as to share holders. Banks, like any business, exist to make profits. Therefore, it should stand to reason that if a bank chooses to take the foreclosure route instead of the short sale route, it must be more profitable. After all, it's business. One possible reason is that the banks do make more money by foreclosing on homeowners. If a bank forecloses on a property that has mortgage insurance, the bank is likely to be reimbursed up to 80% of the value of the home, many times leaving the bank with the other 20%, and the home. The home will probably sell at more than 20% of its original value, and the bank will write off the loss from the defaulted loan and costs to repossess it. This will add up to more than 100% and many times can more, much more than cover the costs incurred to take the home back and resell it as is and with minimal repairs. So by throwing people out of their homes, by blighting neighborhoods, by cashing in on their insurance (driving some Mortgage Insurers to the breaking point) and by having you and I (taxpayers) reimburse them for their losses (and TARP), they can exit the situation better than ever. This is business and that is profit for shareholders. Banks do not exist for the general welfare of the public. One Innovative Solution Where Everyone Wins Enter non-profit Boston Community Capital (BCC). Here is a non-profit that makes good business decisions. BCC started a highly successful innovation by taking look at people in foreclosure. The first thing it noticed was that they were still employed. After running the numbers they also discovered that the homeowners had tried to modify their mortgages and were denied. Many tried to do the short sale and were denied. Yet at current market prices they could pay the mortgage. What's the profitable business decision that BCC made? They bought the foreclosed homes and sold them back to the homeowners without ever evicting them. This resulted in the neighborhoods being preserved, no families being thrown out of their homes (and on the public dole) and to date not one single mortgage has defaulted, so now there is stability, leading to recovery out of this tragic mess. There is a way, but the short-term profit hunters are still blind to it. Boston Community Capital is making money and with its money it is able to buy more foreclosed homes and help more people. A for-profit institution could do the same. This is pro-America and it is pro people. It defends property ownership and increases stability. This story is available through many sources. The following article seems to be the most thorough. Click here to read
The truth is, unless your realtor is a practicing economist, he or she is not going to know more than anyone else. The house I just sold does not tell me if the next house is going to sell or if there will be any qualified buyers looking to buy in the near future. The crystal ball A crystal ball approach is heavily used by people, going on a hunch or a feeling. Sadly, many realtors fall into this trap, although I don't believe deliberately so. Our experiences with tens of people is not statistically valid against a market of millions - and I am just talking about Southern California, which is made up of markets as different and diverse as Long Beach, Glendale, Moreno Valley, South Central and Palos Verdes. Who can predict? When the market started its downward trend, it was the lower priced homes that were hit first. But in 4th quarter of 2010 it was nearly the opposite, with 1 in 12 homes in financial trouble (in default or foreclosure) under the $1 million mark and 1 in 7 suffering the same problems costing more than $1 million. In fact there is even a form which realtors are encouraged to have their clients read and sign: the MCA or "Market Conditions Advisory." This document informs buyers that their realtor cannot predict what will happen with prices. Homes were never meant to be a short-term investment, although that is exactly what happened from 2003 through 2007 and beyond, due to artificial increases in the prices of a home. What I had learned is that in Southern California, as a rule of thumb, no house was worth less than it was paid for in any 10-year period. That holds true even now. We'll have to see if that will still hold true in 2015, and it may. Now that it is clear that we don't know, what are the opinions of the experts? Those opinions are varied, and they vary by the type of work the experts do. If you flip homes, buying low and selling high, you are a type of expert, but your perspective will be different than an economist or someone in the state government. The Los Angeles Times put out an article on the 1st that seems to represent a spectrum of expert opinion on real estate in 2011. Take a look by pressing here.