Archive for November, 2007
What is a Good Faith Deposit, and Why Do I Need One?
November 25th, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico Sellers
I’m always a little surprised when I sit down to write a purchase offer on Chico CA Real Estate for a new buyer, and they don’t have their checkbook with them!
It seems that many buyers don’t know that they are expected to submit a good faith deposit with their offer to purchase a property. I often hear “Oh…. um… JEEZ! I forgot my checkbook!” Unfortunately, in California, a contract must have consideration (a deposit) to be valid.
A good faith deposit is an amount of money that the buyer submits with the offer to show that he or she is acting in good faith and intends to fulfill the terms of their agreement.
The deposit basically says to the seller, “I want your house badly enough, I’m willing to put my money where my mouth is!”
The amount of an acceptable good faith deposit varies widely by region.
In Chico, CA, a good rule of thumb is to offer about 1% of the purchase price for every 30 days in escrow. In other words, if you are offering on a $300,000 home and you are requesting a 60 day escrow, a $6,000 deposit will probably fit the bill. This is a very loose rule, however, and each transaction should be considered carefully. For instance, in a strong buyer’s market, it is likely that a buyer can offer a smaller deposit without too much grumbling from the seller. However, in a competitive situation where the property is bringing in multiple offers, a buyer can help make his offer more appealing by providing a more substantial deposit.
Your good faith deposit is typically held by the broker who is writing the offer for you. If I was acting as your buyer’s agent, I would accept the check on the seller’s behalf. Chico Homes would then hold it in a separately maintained trust account until your offer was accepted by the seller. Within 3 days of acceptance, the deposit is required to be deposited with the title company that will be handling the escrow. Your check should always be made out to the title company, not the agent you are working with, or the company where they are employed!
The seller is only entitled to keep your good faith deposit in the event that you, the buyer default on the contract.
It is important that you are very clear as to the terms you are agreeing to. If the contract says you have 17 days to complete your investigations, and you decide on day 25 that you no longer want the property because the house next door has barking dogs, you may sacrifice your deposit! Be sure to work with your trusted Realtor to adhere to the terms and timelines specified in the contract.
If the transaction proceeds without issues, the deposit is typically applied to the closing costs the buyer will incur during the escrow. In the event that both buyer and seller agree to terminate the contract, the buyer can receive his deposit back minus any inspection costs that he may have agreed to.
Have more questions? I’m happy to answer them! Sandi 530-864-5407
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
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What Am I Thankful For…
November 21st, 2007 Categories: Chico Buyers, Chico CA Real Estate Market Stats, Chico CA Real Estate News, My Opinion on Things
by guest writer Mike Wiegert, broker, Chico Homes
At this time of holiday cheer and good will towards men, I really feel the need to express my gratitude and thanks for the many blessings in my life.
First there is the love of a healthy family and friends. Next, I’m grateful for my own personal health and well being. I’m thankful that none of my sons are involved in an unnecessary war in a desperate land thousand of miles from home. I’m grateful that I live in a community like Chico, CA where a day never goes by without a hearty greeting from someone I’ve haven’t seen for a while. And I can’t forget to mention how thankful I am to be a Realtor in these times of prosperity and exceptional market conditions.
WHAT? WHOA! STOP! HALT! SCREECH!
What did that idiot just say? Is that the same market that we’ve heard about with desperate sales situations and real estate salespeople jumping off bridges or scurrying to find other skilled occupations. (Would you like fries with that?) Yes, that’s the market I’m talking about.
It’s all a matter of perspective.
We’ve all read horror stories sensationalized by our newspapers nationwide about the failing real estate market. We heard about how the bottom is falling out, and how families have lost tens and hundreds of thousands of dollars in equity in their homes. We know about foreclosures and short sales being on the rise.
Did you see, however, an article that stated that by Thanksgiving week, members of the Chico Multiple Listing Service had sold and closed $825,000,000 in real estate since January ONE?
That’s EIGHT HUNDRED AND A QUARTER MILLION, PEOPLE!
Gosh, that really sounds terrible to me. Did you also read that the highest sales volume in Chico MLS history was the record year of 2005 at a whopping $1,250,000,000? At the current rate, Chico CA Realtors are projected to sell $927,000,000 in Chico CA real estate or about 74 percent of the volume of sales of that highest, greatest real estate sales year of all time! Year 2007 is shaping up to be the third largest volume of sales in Chico Multiple Listing Service history.
I’m thankful that mortgage rates are staying at historical lows, often in the high fives to low sixes. At risk of sounding like your Grandpa, I remember selling (or trying to sell) real estate in Chico, CA in the eighties when interest rates were in the 18 to 20
percent range. The point is that interest rates are incredibly low, and it’s a fantastic time to buy. If you read my article last week about short sales, it was a shout out to all the buyers out there. We’re talkin’ OPPORTUNITIES, PEOPLE!
I’ll leave you with this thought: you can read all the sensational negative news available, but remember that our local market is strong, and it’s a great time to be involved.
Have you every heard anyone say, “I wish I hadn’t bought so much Chico CA real estate in my lifetime.” I didn’t think so. How about, “I wish I had bought MORE real estate!”
I rest my case.
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 8 Comments »
Foreclosures: What you should know BEFORE you make an offer, Part 3
November 18th, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 3 in a series of helpful hints to purchasing foreclosures in Chico, CA.
Did you miss parts 1 and 2? Read here!
Foreclosures: What you should know BEFORE you make an offer, Part 1
Foreclosures: What you should know BEFORE you make an offer, Part 2
Chico CA real estate buyers and investors LOVE foreclosures.
The problem is, there aren’t that many to go around! Many areas of California have experienced a high influx of foreclosures thanks to the recent mortgage meltdown. Chico, CA however has fared a little better in terms of relative numbers of repossessions.
Chico CA buyers are competing to snatch up the bank-owned (REO) property when it DOES come along. It’s important to remember, however, that purchasing an REO property can be quite a bit different than a traditional Chico CA real estate purchase.
Before offering on a Chico, CA REO property, you should know:
1. It’s important to have a preapproval letter from your lender. Most of the banks I’ve dealt with require that the preapproval be submitted with your initial purchase offer. Without it, they won’t waste their time reviewing your paperwork. While this makes good sense anytime you are offering on a property, it’s critical for an REO listing.
2. The bank also wants to prequalify you themselves.
They want to see the letter from your preferred lender, but they won’t necessarily trust it! Oftentimes, you will be required to fill out their credit application just so they can verify that you do indeed qualify for the loan amount, or are otherwise financially stable. Although they would be happy to process your loan, you are still pursue a loan through the lender of your choice.
3. The bank is picky when it comes to title companies.
Typically, a buyer has some say about which title company they prefer, and even which officer they would like to work with. The bank really doesn’t care if your friend Sue is the best title officer in the county and her office is only 2 blocks from your new house. Most of the time, they already have a title company and officer designated, and the point is non-negotiable. The best part? The title company is usually out of the area, and unfamiliar with local practices.
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Still want to be part of the foreclosure frenzy taking place in Chico CA real estate? Contact me, and I will work to find you the perfect Chico REO property for your needs.
Sandi Bauman, Chico CA Realtor: 530-864-5407.
Related reads:
Short escrow? Get your ducks in a row BEFORE you make an offer.
What is the Difference between Prequalification and Preapproval?
Why Should I Get Preapproved for a Chico, CA Home?
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 4 Comments »
Foreclosures: What you should know BEFORE you make an offer, Part 2
November 16th, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 2 in a series of helpful hints to purchasing foreclosures in Chico, CA.
Did you miss part 1? Read here.
Bank-owned property (REO) is some of the most sought-after Chico CA real estate of all time. In a market where many buyers are sitting on the fence waiting for the bottom to fall out, savvy investors are picking up REO’s as fast as Chico Realtors can churn them out!
It is important, should you be considering purchasing a bank-owned (REO) listing, that you understand up front what exactly you’re getting yourself into. For the uninitiated, a look into the world of REO can be quite surprising. (In case you’re wondering, I don’t necessarily mean that in a good way.)
Before offering on a Chico, CA REO property, you should know:
1. Most REO property won’t leave you feeling all warm and fuzzy.
First time home-buyers are often gleeful when they get their first look at the home they will eventually buy. “It’s just so CUTE!” they declare. They oooh and aaah over the carefully groomed, staged and scented home visualizing Thanksgiving Dinners and Christmas trees.
REO property often takes a little more imagination. You have to try to pretend that the yard is not dead, the house isn’t lime green, the walls don’t have holes in them, the kitchen appliances and fixtures are actually there, and the flooring isn’t all torn up. That is, if you can get past the unbelievable stench and filth of lives gone horribly wrong.
To be fair, there are nice, clean Chico REO properties to be had- there are. But oftentimes, an REO house is one that shows evidence of severe neglect and outright abuse on the part of an angry or desperate previous owner.
2. Don’t expect the bank to pretty it all up for you!
The banks usually prefer to sell “as is.” Minimally, they will do an initial “trash out” to remove the belongings left in or on the property. In addition, they will re-key, board up windows, and winterize. It is unlikely that measures will be taken to add appeal- if the sinks, lights, appliances and windows are missing, they are likely to stay that way. Exception: if the buyer’s lender requires a repair (or 10) to fund the loan, the bank may negotiate the cost of the repairs. In a competitive REO market, however, they won’t need to do any repairs- a cash buyer will snatch it right up in it’s current condition.
3. The bank won’t tell you what’s wrong with the house, because they don’t know.
A traditional seller is required to provide you with a laundry list of everything they know to be wrong with the property. In the case of an REO property, the seller has never even seen the property, let alone lived in it. The bank has no idea if the handrail is loose, if there are barking dogs next door, or if meth was manufactured in the second bedroom. Make sure that you do any inspections necessary to ensure that you have a good grasp on the condition of the property- very little information will be provided to you by the seller.
Coming soon! What you should know BEFORE you make an offer, Part 3.
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By the way, if you like the yellow house in the picture…. it can be yours for ONLY $79,900! That is $55,000 less than any other stick built home in Paradise CA!!
Give me a call right away 530-864-5407– it’ll be gone quick.
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 6 Comments »
Foreclosures: What you should know BEFORE you make an offer, Part 1
November 12th, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 1 in a series of helpful hints to purchasing foreclosures in Chico, CA.
“Foreclosure” sees to be the new buzzword around Chico, CA these days. Everyone wants to score that awesome Chico CA real estate deal, and people are looking to the foreclosures in Chico to make it happen. In truth, most people are actually wanting “REO” property. In other words… the bank now holds the title.
The process of purchasing an REO property can be significantly different than your average residential purchase. Not always, of course, but often enough that you should know ahead of time what you might run into.
Before offering on a Chico, CA REO property, you should know:
1. Not all REO’s are phenomenal deals!
Just because the listing agent labels it “foreclosure!” doesn’t mean that it is a steal. I work with a least one bank that takes the appraisal price and ups it by 5% to arrive at the asking price. Make sure that you are working with a competent Chico Realtor who can help you ascertain whether or not the property is priced competitively.
2 . The bank has no emotional ties to the property.
Unlike a typical homeowner, the bank is emotionally detached during the negotiating process- it’s completely impersonal. Truly, your offer is just one of many files sitting in a pile on somebody’s desk. The strategies that might help you score in a traditional transaction are unlikely to work with a bank employee located in Texas. They have a specific set of rules and time-lines to follow, and little else matters to them.
3. The bank operates on their schedule, not yours.
“Time is of the essence” in a typical transaction. If, as a buyer, you allow the seller 3 days to respond to your offer, they will usually respond as quickly as possible in order to facilitate the transaction. A bank may respond in an hour, or it make take several weeks to get an answer! Don’t make the mistake of thinking the bank isn’t considering your offer- sometimes the contract has to be approved by a series of 5 or 6 people at the company before you get the good news. Conversely, I’ve found that once an offer is approved, the bank will steamroll over anybody or anything that gets in the way of closing the deal on time. Usually, they want to close within the same month the contract is approved!
Coming soon! What you should know BEFORE you make an offer, Part 2.
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Have specific questions on the foreclosure process? I’m glad to help, whether you are a seller facing foreclosure, or a buyer looking to purchase. Give me a call! 530-864-5407.
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 8 Comments »
What’s All This Talk About Short Sales on Chico Homes?
November 10th, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico CA Real Estate News, Chico Financing
By guest author Mike Wiegert, Broker, Chico Homes
For Chico, CA homeowners that can’t afford to pay their mortgage, there is an alternative to bankruptcy or foreclosure proceedings – it is called the short sale.
The short sale really begins when you finally realize that your house just isn’t worth what it was just a few short years ago.
The next realization is that if you sell your house for what it’s really worth, you’re not going to actually get any proceeds back from the sale. That’s a big pill to swallow, but after you do, you might have the final realization that you’re really just starting from scratch like you did a few years ago. Back then, you’re credit was pretty good, you had your health, all your kids were fairly normal and you had a job. So rather than losing your home in foreclosure AND ending up with a terrible credit report, you think “I wish we could just be back to where we were back then.”
It’s at this point that a “short sale” might be the answer.
A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs such as property taxes, transfer taxes and commission.
In other words, what a buyer might be willing to pay for your home isn’t going to cover what you owe on it and what it’s going to cost you to sell it. Unlike a foreclosure, a short sale can keep the homeowners credit intact. The first step is to do some research a find a Chico, CA Realtor that knows the Chico real estate market and has had experience and success in the short sale process. Your Realtor will need special skills and a persistent attitude in dealing and negotiating with your lender.
Banks are not in the business of owning and marketing homes and many would much rather discount the current amount of their loans than have to go through the process of marketing and holding a property in a slower market. This lender attitude will certainly grow as the number of foreclosures and repossessions increase. Conversely, the popularity of buying in the short sale market appears to be spreading rapidly.
Be advised, before you contract with any Realtor to market your home utilizing a short sale concept, you should consult a real estate attorney for the legal implications of the short sale and an accountant about the tax liabilities involved in the short sale.
You must understand everything upfront before the short sale process begins- look to your Chico CA Realtor for assistance.
1. You must prove to your lender that you are unable to afford to pay your mortgage.
If your lender is aware that you possess certain assets such as stocks or bonds, or you have a high paying job, your lender may require you to sign a note promising to repay at a future time any discount of what you owe that they make in the short sale. If you do not possess these types of assets or your job clearly indicates that you would not be able to repay such a debt, it is possible it may be forgiven.
2. Next the lender will appraise the current market value of your home.
The lender, with the help of your Chico, CA Realtor will calculate the amount of the outstanding debt and the customary costs of selling. If the proposed short sale will bring them more money than they would get during auction, the lender will mostly likely agree to it. End result, you didn’t pull the equity out of your home that you might have thought you had, but your credit is still intact, you’re out of a mortgage payment you can’t afford and the dream of once again owning a little corner of this world still burns brightly!
If you find yourself in a situation where your payments are are becoming too much to handle, please contact us at Chico Homes! We may be able to assist you in selling your home and avoiding a credit-destroying foreclosure.
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 5 Comments »
Longs Drug Store opens, Terrace Pharmacy closes.
November 4th, 2007 Categories: Uncategorized
There is a new kid on the block (East Avenue, anyway): Longs Drug Store.
Located on the corner of East Avenue and Marigold, it will be a convenient stop for the Chico neighborhoods that line either side of East. The new store features a drive through pick up window, beer and wine, and a selection of grocery items. Of course shoppers will still find the pharmaceutical items and general merchandise associated with Longs Drug.The opening of the new store was a bittersweet event for longtime local residents. The opening brought about the closing of Terrace Pharmacy, which began serving customers in 1957. Terrace also collected PG&E payments and served as a U.S. Postal Substation over the years. Fortunately, many of Terrace’s employees can be found at the new Longs Drug, and customers can still enjoy the tradition of home delivery service offered by Terrace.
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 2 Comments »
Chico, CA Real Estate Market Report October 2007
November 3rd, 2007 Categories: Chico CA Real Estate Market Stats, Chico CA Real Estate News
Statistics for: Single Family Detached, Condo, Duplex, Mobile On Land
Date Range=10/2007-10/2007
Current Active Avg List Price Avg DOM
464 $404,743 105
Listed Sold Pct Sold Avg List Price Sold Avg Price Sold
123 53 43% $368,148 $349,222
Sale Price/List Price Ratio Avg DOM Sold Pct Expired
94.86% 79 34%
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
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Short escrow? Get your ducks in a row BEFORE you make an offer.
November 2nd, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Real Estate News, Chico Sellers, My Opinion on Things
There is no disputing the fact that Chico, CA is currently in what is commonly known as a “Buyer’s Market.”
That is FABULOUS news for all the buyers out there who have patiently been waiting for this day. The inventory is high, the prices have dropped, and the interest rates are still phenomenal!
Now is the time to get a great deal! 
A “Buyer’s Market” is a wonderful thing. A Chico, CA home that might have cost $400,000 in 2005 may only set you back $350,000 today. On average, prices seem to have corrected between 10 and 15 percent for residential properties.
I have noticed a growing trend with buyers. In an effort to get the absolute lowest price on a property, they attempt to entice the sellers with a very short escrow period. For some sellers, a quick sale in this market is a dream come true! They need out from under that house payment, and will gladly accept less than asking price just to be DONE.
However, when representing a seller, I have had to caution against signing the first contract we see, simply because the buyer promises to make it the pain go away with a 10 day escrow. The offer to close in 10 days is an empty one if the buyer has not done his homework.
The following items must be taken into consideration to close an escrow quickly:
- Is the buyer preapproved?
- Is the lender local and knowledgeable about our issues and resources?
- Is the lender willing to commit to closing on time?
- What kind of loan product is the buyer applying for? A VA loan, for instance, is highly unlikely to close in less than 30 days.
- What inspections does the buyer request? Well potability tests may require 14 days or more to obtain results.
- Can we get the appraisal completed immediately?
- Will repairs be required by the lender to fund the loan? If so, is there a contractor available to bid, complete, and final the work within a days notice?
An escrow that closes quickly can be a wonderful solution for both the buyer and the seller, but it doesn’t happen without forethought, preparation, and a willingness for all parties to be focused on immediate results.
If you are a buyer, hoping to get the best deal of the year by offering to close quickly, get your ducks in a row BEFORE you make an offer. No seller in their right mind will accept your offer if you aren’t prepared to close the deal.
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Shopping for Chico foreclosure property? Give me a call- I’m currently working with several REO departments on bank-owned Chico property. Sandi Bauman 530-864-5407
Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 6 Comments »
Sycamore Beach Park in Chico, CA
November 2nd, 2007 Categories: California Park Neighborhood, Chico California Photos
I just couldn’t resist stopping at Sycamore Beach Park yesterday to get this picture. I was driving through the California Park neighborhood in Chico, CA to preview a new listing. (It should be a nice Chico foreclosure property if you’ve been watching for something in this area! Drop me a note, and I will be sure to let you know when it hits the market.)Let me get back on track… Sycamore Beach Park is one of several beautiful park areas located in the California Park neighborhood. There are three green areas located on Idyllwild Drive alone! The Sycamore Beach Park is one of my favorites because of the large grassy area and gorgeous view of California Park Lake. The area is usually wide open- you feel like you have the whole place to yourself!Be sure to stop by and enjoy the fall colors reflecting in the lake… they won’t last much longer!More on the California Park neighborhood:The View from a Canoe- California Park in Chico, CA
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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email sandibauman@sbcglobal.net. Specializing in REO, residential, relocation, investment & ag property.
| Discussion: 5 Comments »
