Local News & Information: 2/9/2010

Articles from the Idaho Business Review

Canyon County defaults rise 70 percent in January
by IBR Staff
Published: February 8,2010
Time posted: 4:24 pm

Canyon County’s home defaults had dropped off in the last few months of 2009, but they came back with a vengeance in the first month of 2010.

The county’s foreclosures hit a high in January, rising from 214 filed in December to 365 filed in January for a total increase of 70.5 percent, according to IdahoDataProviders.com.

“What this all means is that you should brace yourself for a double dip in the housing market in 2010,” Charlie Nate, president of the foreclosure-tracking company, said in a release. “Look for local prices to still fall another 7% to 10% starting in the next few months. A bottom to the housing market and the beginning of a real recovery is unfortunately still at least one year away.” Read Full Article....

Representation as a Buyer is a Good Idea

The following is an excerpt from a letter my Broker (and father), Jon Gosche, has written about why it is important to use an Exclusive Buyer's Agent when purchasing your home. I think that it covers many facts that people may not know as well as misconceptions that people may have with reference to Realtors and representation. My company and I work primarily as Buyers agents. We do list properties as well, but generally they are past clients that we have worked with before, and often homes that we helped those clients purchase. We do not solicit listings but look to help buyers find their perfect home. I really love to work with buyers and it is exciting to help someone find a home that they will be able to enjoy with their family for years to come, or help an investor broaden his/her portfolio. Anyway, on with the letter excerpt (italics are my additions to the letter):

Many home buyers unwittingly harm their bargaining power, pay too much, pay unnecessary closing costs, miss important structural problems, and other things when purchasing their home because they do not understand Agency Law in Idaho. That is why the State Real Estate Commission REQUIRES that all real estate agents present a Brochure prepared by the commission to potential home buyers. This can be found online at http://www.idahorealestatecommission.com/consumer.html (Click on the agency Brochure link on the consumer information page). In spite of this, many people still fail to understand and weaken their position. It is our hope that in reading this you will be alerted to facts and myths about the home buying process. This is a list of many of the reasons to use an Exclusive Buyer's Agent, but by no means is an exhaustive list.

Myths:

1)The seller will pay less commission if you use the seller’s agent and therefore you can get a lower price for the house. The truth is that the seller signs a contract to pay a specific commission to the seller agent’s Broker. The Broker lists on the MLS (multiple listing) the commission and how it is to be split between involved agents. By MLS rules it must be clearly listed if the commission will vary if there is only one agent involved. The dual agent gets both sides of the commission and so using a dual agent almost never affects the commission. Fines are levied if the MLS finds this practiced. Therefore using the seller’s agent does not lower the price you will pay.

2)If you sign an agency agreement with a Buyer’s agent you are stuck with him and cannot get out of the contract. Even if he does a bad job for you, you have to buy your house through him until your contract runs out. The truth is that you are contracting with an agent to serve YOU. You may put in the contract that you have the right to discontinue the contract. Furthermore, the buyer’s contract is a mutual contract with responsibilities for both parties in the contract. The agent is responsible to serve you and if he is not fulfilling the contract specifications you can and should fire the agent. This doesn't mean that you are able cancel the contract with the agent if they are working hard for and doing a good job for you unless you both mutually agree, but if they are why would you want to discontinue using that agent in the first place?

3)You can get better service by shopping yourself because you will be able to buy anything that you find. You may find a for sale by owner and will not be able to buy it if you have an agent. The truth is that the reverse is true. Agents show the best properties they know of to clients first and to customers last. When you hire a buyer’s agent he is hired to help you find the property that you want. This includes for sale by owner! Most owners trying to sell their own houses fail. Most for sale by owner sales end up involving an agent. We can work with for sale by owners, (and often do)! Non-professionals often do not know disclosure rules and other important things. If you buy a for sale by owner home you are even in greater need of a buyer agent.

Facts:

1) Agents have a statutory (by law) responsibility to act in the best interest of their clients. Agents are required to hold client information confidentially. As a buyers' agent this includes keeping all financial information confidential as well as many other things. As a sellers' agent this includes revealing any information that they have concerning a customer buyer to their seller client. (For example, a buyer customer goes to an Open House, meets the seller's listing agent and reveals that they would want to make an offer of $200,000 on the house, but that they are approved for $220,000--the seller's agent has a duty to give the seller this information and has no responsibility to keep it confidential for the buyer.)

2) Sellers who have listed with a Real Estate agent are clients of that agent.

3)You, as a buyer cannot be an exclusive client of an agent who is also the agent of the seller for that home. You can enter a dual agent position, but before you sign a contract causing that arrangement you are a customer while the seller is a client. (The terms customer and client are confusing sometimes, but for quick clarification, a client is represented while a customer is not--see the agency brochure discussed above for a better explanation.) Anything that you tell that agent can be, and in many cases must be revealed to the seller. If you are a customer, and the agent knows how much you are pre-approved for, how much you can pay, how much you like the house, how soon you need to move, or anything else, that may affect your bargaining power he is required to tell to his client. Remember, the agent’s responsibility is to work in the best interest of his client.

4)You can sign a dual agency agreement. From that point on your vital information is to be confidential. But the dual agent cannot reveal any vital information that he may have concerning the seller either. He acts merely as a middleman.

5)An Exclusive Buyer’s Agent has a statutory responsibility to act in the best interest of the buyer. He must hold all of your information confidentially. He must not reveal anything that will weaken your bargaining power, like how much money you can spend, how much you will spend, how fast you must get into a house or anything that may give an advantage to the seller.

6)An Exclusive Buyer's Agent is to reveal any information that he may know about the seller that will help you. Often we find things out like the last sale price, what the seller owes on the property, why the seller has to move, if other offers have been made, the reason for the sale (divorce, transfer, pre-foreclosure, bought another house, etc.) and other things that may really help your bargaining position. A dual agent cannot do this for you.

7)An Exclusive Buyer’s Agent is required to do reasonable inspection of the property and to reveal know potential problems. This does not mean a Buyers agent is a home inspector. It means that any material facts that are know or reasonably should be know must be disclosed. We recommend competent home inspectors to check and protect buyers against such things.

8)An Exclusive Buyer’s Agent will alert you to closing costs that can be paid by the seller instead of you.

Contrary to popular belief, my job as a Realtor is to serve you, my client, and to do my very best to find you the home you want, get you the best deal and following through the transaction to a smooth close. I do care about my clients and your needs, as I know many other Realtors do as well. However, just helping you find a property is not a Realtors only job in a transaction. In fact, that is just the beginning. In a different post I plan to write about what services a full service Buyers' agent provides (or should provide.) Please, comment or email me if you have any questions on this post above (or anything else for that matter).

10323 W. Campville, Boise ID 83709

Home Path Financing - Fannie Mae Fact Sheet

3.5% Closing Cost / Appliance Incentive Fact Sheet

To encourage the purchase of REO properties, Fannie Mae is offering a new incentive beginning January 28 through April 30, 2010.

Overview of Incentive

During the offer and negotiation of an REO property, buyers will be offered an incentive of up to 3.5% of the final sales price to be used towards one of the following:
 Closing costs
 The purchase of new Whirlpool® appliances by Fannie Mae
 A mix of closing costs and appliances, at the buyer's discretion, up to the maximum 3.5%

No additional selling agent incentives will be combined with this incentive at this time.

Eligibility

To be eligible for the incentive, the:
 Offer must accepted on or after January 28, 2010
 Property sale must close before May 1, 2010
 Buyer must be an owner-occupant (second homes are eligible as long as they are owner-occupied) -- investors are excluded

Financing
Lenders and/or mortgage products may impose restrictions on how a buyer can use the incentive and may limit the amount of incentive a buyer can utilize. Buyers will consult their lender for guidance regarding specific caps on IPCs.

Fannie Mae has included the cost of the appliances in establishing the property sales price. Appliances in this incentive for HomePath properties are not considered a sales concession.

The incentive will be noted in Section 38 on the Real Estate Addendum.

For More Information
The incentive reinforces the organization's commitment to stabilizing communities and assisting buyers. For more information about this incentive, visit www.HomePath.com, read the press release on fanniemae.com

A Little Bit On Short Sales

This is an email that I have adapted and sent to a number of clients, so I thought that I may as well post it to the blog as well.....

Let me give you a brief rundown on short sales, REO ("foreclosures") properties and the process with each of those.

In a short sale situation, an owner owes more on the property than he/she may be able to sell it for to pay the lien holders back in full. With properties that are listed as potential short sales, the owner is trying to sell the property, but because they owe more than they are able to sell it for they have to get third party bank approval – meaning they (or generally it is the agent) have to go to the bank(s) and negotiate with them and get the bank(s) to agree to the sale of the property and ‘forgive’ the borrower (owner) of the remainder money that they owe to the bank (or in some cases have the borrower sign a promissory note or understand that they may get a deficiency judgement). This is where the listing agent is negotiating the short sale with the bank. In not all cases is a short sale a ‘pre-foreclosure’ property, but in most cases it is. If the sale doesn’t go through while the owner still owns the property it generally goes to foreclosure auction. The lienholder has the right to agree to a short sale or to say no and if they say no it will generally go into foreclosure unless the owner/borrow is able to keep up with the payments and just decides to stay in the house. In most instances this is not the case.

So to give you a property specific example, let's say we are taking about a property that has two loans on it. That means that the owner owes two different banks money, a first mortgage and a second mortgage. Short sales with two loans on it are a little bit trickier because you have to get two lenders/banks to agree to the terms of the short sale. Let's say the property is listed at $159,900. Let's also say that the last sales price was $270,000 back in 2006 (the peak of the market here). So, let’s say that the total amount owed on it is $270,000. Let’s also say that the first loan on it is $200,000 and the second loan on it is $70,000. So, at a listed asking price of $159,900 the first loan is losing $40,100 (plus closing costs of sale which generally run 6-10%) and the second loan is losing the entire $70,000. It is the listings agents’ job to get the banks to agree to this sale amount of $159,900. Generally the second will end up agreeing to $1000 to $5000 because they won’t make any money at all if the first loan forecloses and takes the property back. $1000 - $5000 is better than nothing. This is not, however, always the case and, is subject to change especially if the second loan is a HELOC (Home Equity Line of Credit) in which case they generally want 10-20% of note amount (or more). (Have you noticed how I am vague with a lot of my answers? It's because there are so many different variables in short sales there is no specific formula). Even though they are a second mortgage they are still players in the short sale and still have to agree to it and sometimes play hard ball. The first is losing between $40,000-60,000 so what they are trying to figure out is if it is more worth it for them to agree to this short sale price and get the house sold or if it is more worth it for them to move forward with the foreclosure and try to sell it as a foreclosed home in their own bank-owned inventory. Now, to make it even more complicated, the asking price is not necessarily what the sales price will be. The bank has the right to say no, or even counter at a higher price than what the seller & listing agent have it listed at. They are kind of tricky that way. However, my husband and I are able to maneuver and navigate them pretty well and there is a lot more I could tell you but I want to keep it as brief as possible tonight (though I’m afraid it is still going to end up long). Another thing you need to know looking at short sales is that they can take anywhere from a couple of weeks to even months (sometimes as long as 4-6 months or more) for the bank to review and approve (or reject or counter) a buyer’s offer. We have closed short sales as quickly as 6 weeks from offer date to close and as long as 5 months offer to close. Some banks have taken even longer recently and we have some in the 5-6 months of negotiations. They aren’t like a normal sale and you have to have much more patience and understanding of the process than a typical sale. Another thing that you want to know is that in many cases the seller continues to market the property, take other offers and present those to the bank as well, unless you put terms in the contract to state otherwise and the seller agrees to that. In those instances you may have put an offer in and waited a couple of months and then ended up being pushed out of the running by a higher offer. That’s a risk that occurs with short sale offers, especially ones in which you offer less than asking price. All that to say, even though the listed asking price is $159,900 and you offer $159,900 (full asking price) that doesn’t necessarily mean that your offer will me approved by the short sale lenders.

I know this is a lot of information all at once. If you have further questions please let me know. There are a lot of short sale properties on the market so it will all definitely come up again as you look at properties to purchase.

RE Designations Part 2

ALC-Accredited Land Consultant: ALC’s are Realtors who have specialized in land and areas such as farm and ranches, undeveloped tracts,, transitional and development land, subdvision and wholesaling of lots, and site selection and assemblage of land parcels. These Realtors must take course work, pass a comprehensive exam, service to the institue (Realtors Land Institute), show documented experience and pass an oral review all within a two-year time period.

CCIM-Certified Commercial Investment Member: A CCIM is a recognized professional in commercial real estate brokerage, leasing, asset management, valuation, and investment analysis. The CCIM busines network includes more than 7,500 designees. A CCIMis an experienced expert and is an invaluable resource to the commercial real estate owner, investor, and user. The Commercial Investment Real Estate Institute (CIREI) requires 240 hours of graduate-level curriculum. Professional experience requirements ensure that a CCIM is highly skilled in his or her field of expertise

CIPS-Certified International Property Specialist: CIPS is awarded by the CIPS Network through the National Association of REALTORS® and local REALTOR® organizations. CIPS specialize in the 'international market' whether they travel abroad to put deals togeter, assist foreign investors, help local buyers invest abroad or serve immigrant niche local markets, the CIPS designatees are the consumners' best bed to ensure an expert in these unique aspects of international real estate. CIPS network is comprised of 1,500 real estate professionals from 50 countries who deal in all types of real estate.

CPM-Certified Property Manager®: The CPM desgniation shows someone who has acquired valuable real estate management skills through educational that lead them to receive the CPM® designation. CPM® members have the competitive edge in every area of real estate management from residential to commercial to industrial.

Believe it or not, this isn't all.

Are you seeing that not all Real Estate Agents are the same? A part 3 to come. (P.S. I don't have any of these ones above)

RE Designations Part 1

You may often wonder what in the world are those letters and symbols at the end of a Realtors' name? These are Real Estate Designations. But, you are not alone if you don't know what they mean. Even as a Realtor myself I don't know what all of them stand for, as there are a lot of them. But, I will say that it is respectable for a person in the industry to have such designations. Real Estate is a pretty easy industry to get into. Getting a real estate license honestly doesn't take a whole lot of effort. I actually wish that it was a bit tougher because I do not believe that one becomes an expert in this industry just by the minimum requirements and classes it takes to get in. We are required to take continuing education each licensing period, which is good. Those who have designations have gone above and beyond the minimum required continuing ed and have actually taken specific classes to intentionally better themselves in the industry. When I was taking some of the required broker classes I thought to myself, "This is really stuff we should know as regular sales agents. This information is necessary to the industry and to our clients." All that to say, I've decided to give you a little help on just what these designations mean. There are a lot of them, so I am going to only touch on the most common ones that you see in the Treasure Valley area for now and may get to the others in another post. Here you go:

REALTOR®-Not all Real Estate Agents are Realtors. Realtors are agents who are members of the National Association of Realtors and must abide by a code of ethics within this membership organization. They (we) are suppose to be committed to a higher standard and knowledge of the industry.

Broker-A Real Estate Broker must complete 120 classroom hours including Broker Management, Real Estate Law and two elective courses. They must pass the tests at the end of each course as well as a separate national and state test once all classroom hours have been completed. In addition, to receive a brokers license, an agent must have at least 2 years experience in the industry, be able to prove full time (at least 30 hours per week) work as an agent in the past two years and a minimum of 2 million worth of sales under their belt.

GRI-Graduate Realtor Institute: According to NAR (realtor.org), Graduate, REALTOR® Institute, is "the mark of a real estate professional who has made the commitment to provide a high level of professional services by securing a strong educational foundation. REALTORS® with the GRI designation are highly trained in many areas of real estate to better serve and protect their clients." This designation requires 90 classroom hours including the 4 GRI module classes and Real Estate Law plus passing the tests at the end of each class.

ePro-The ePro certification began in 2000 by the National Association of Realtors®. It is a comprehensive Internet certification program presented online to teach agents the fundamentals of doing business online, ways of creating and maintaining online relationships, web marketing ethical and legal issues, and how to adapt to new ways of doing business online. Agents must complete the online course to be ePro certified.

SFR-Short Sales & Foreclosure Resource: This is a new certification that came about because of all the short sales & foreclosures flooding the current market. While I don't think that just because an agent has this SFR it makes them an expert, I do think it is a start. However, as a consumer, be careful. Just having taken the class and having the certification (which is a one day course) doesn't make an agent an expert. Agents need to have experience as well. For more informaiton on short sales go here.

SRS-Seller Representitive Specialist: According to SRS Council is "the premiere seller agency desigation." This designation requires a two day SRS Desingation course and a passing exam at the end of the course.

ABR-Accredited Buyer Representative: According to REBAC (Real Estate Buyer's Agent Council) this is the '"benchmark of excellence in buyer representation." This designation requires a two day ABR Designation course, a passing grade of 80% or above on the test, a one day approved elective course, and at least 5 completed transactions as a Exclusive Buyers' Agent. Completion of these classes, tests and required sales denotes a Sales Associate who is qualified to provide buyer representation and is familiar with buyer brokerage and buyer agency issues.

ABRM-Accredited Buyer Representative Manager: This designation is for brokers, owners and managers who have passed both the ABR and ABRM courses and who are able to provide documentation of past management experience, including having overseen a minimum of 25 real estate transactions involving a buyers' agent or having two or more years experience overseeing buyer representatives.

CRS®-Certified Residential Specialist:The CRS is the highest designation that can be awarded in the residential field. This designation recognizes experience and education that the recipient has accomplished. According to the Council of Residential Specialists less than 4% of agents hold this designation. Agents must complete 75 closed transactions or 25 million dollars worth of sales in a 5 year period and complete 2 two day courses or 25 closed transactions or $8 million dollars worth of sales and 3 two day courses PLUS 4 additional elective course, passed tests on all of these classes and one of the following designations already completed-ABR, GRI, ALC, CPM, CRES, CCIM, FRE or ePro.

And now that the last thing I listed were designations like ALC, CPM, CRES, CCIM and FRE which I am not defining in this post, I will most certainly have to do a part 2.

Which ones do I have you ask? I am a Realtor®, a Broker, and I hold the GRI, ABR, SRS, SFR & ePro designations and certifications. My next goal is to work on the CRS. I'll keep you posted.

Automatic Property Search

If you are a past client of mine chances are you are already well informated about the Automatic Property Search. If you have ever talked to me or emailed me I have surely explained it to you. So, this post is for those of you who don't know what an auto search is. Our MLS program has a fantastic feature for you to keep up on the Real Estate Market in this area with ease. Our website BoiseRealtyStore.com provides a search program with public access so that you can search manually yourself, which is great (see that here). But as good as it is, about 10% of listings are not anywhere on the web were the public has access. This is because some brokers and sellers do not allow their listings to be on the Internet publicly. Besides that, there is some information about the property (taxes, association fees, sometimes addresses & directions, sold & pending comps, etc) on the completed MLS database which is not available on the public access. Because of this you may want to have us search the original database for you. If you give me your criteria I will set up a search for you and email the detailed listings to you so you have ALL listings that fit your search criteria. Then you will get all new listings that ANY Realtor from ANY company lists immediately upon their upload into the MLS. You will literally get the new listings in your email before some Real Estate Agents have a chance to look them up! If you are looking for multiple types of property I can set you up on multiple searches. You will always be able to stop receiving listings by clicking OPT OUT at the bottom of your email or by contacting me and letting me know that you no longer want to receive the service. To sign up for an automatic search you can either go here and fill out the form, email me at kaseyboles@boiserealtystore.com and let me know what your criteria is or call me at 208-830-6186 and we can discuss it over the phone. It will only take about 5 minutes of your time and the advantage and ease of receiving new listings will save you time, effort and frustration. We can be very specific in the search, so be very specific when telling me what you are looking for. There are a lot of homes on the market these days, so you as a buyer have a lot of good choices. As a seller it is good to be on this search as well to see competition and pricing of homes within the same criteria as yours. And it's fun! It will make you want to check your email every day to see if there are any new properties. If you find something you like you can call or email me and I'll get you more information or set up an appointment so that you are able to view the property. Please let me know if you'd like to be set up on an automatic search.

Also, ask me about ListingBook, another great tool for home property searching.

Shopping for Homes Online and Buyers' Agency

Reposted from October 2006 with a few minor edits

More and more people are beginning their home searching online. It's convenient, it's easy and often you even are able to see the interior of a home through virtual tours without ever leaving your chair. A lot of things are changing in how Real Estate Agents market, assist people in finding a home, and even in how clients are represented. Buyers' agency may be a newer concept and isn't even fully practiced in some states. Idaho has very specific laws on how a customer or client should be represented and it is important for you to understand how you will be represented in a transaction. Read the Idaho Agency Law Brochure for a clear understanding of the different types of relationships a Real Estate Agent may have with a person they encounter in a transaction and vice versa. Now how does this all relate to shopping for Real Estate online? In today's Real Estate cyberworld many successful websites allow anyone to search a public access MLS site. This hasn't been the case for very long. In fact, my father's website and only one or two other well know Real Estate brokerages in the Treasure Valley had this access on their website as recently as 10 or 11 years ago. Today it has come to be a norm. What you do need to know about it is that more often than not the picture and information of the Realtor next to the listing that you've fallen in love with is not the listing agent on the home. He/she is one of the Realtors that is hosting the public access site for you to be able to search the MLS online yourself. However, what else you do need to know is that it is better for you if they are not the listing agent. You need your own representation and a Buyers' agent is able to not only get you all of the information that you may want or need on any given house, they can also get you more. The listing agent has a confidentiality agreement with the seller of the home. They are representing the seller. Your buyers' agent will be representing you. And that's important.

Questions You Should Ask Any Agent - Part 14

1)Why did you become a real estate agent and how long have you been in the business?

I was born and raised in Idaho, but over the course of college and marriage had lived in other areas for about 7 years. My husband, John and I were living in Tacoma - he was teaching and I was a waitress. The whole situation for a number of reasons wasn't working for us and so we looked into other options. My father had previously been a Chiropractor but had sold his business a few years prior and gotten his Real Estate license. He first got his license to do his own investing and then (somewhat unintentionally) his business took off. After two years (the minimum time required in the business) he got his Real Estate Broker's license and started his own company, Jon Gosche Real Estate. A few years later he was still working, his business was strong and he even had a couple of other agents in his company. The opportunity to come to Boise, get our real estate licenses and work with him came up and we decided to take it. Once we got our license and began working in the family business we realized that it was a good fit for us and that we were good at it! We have now been selling real estate since 2004 and have both been "top producers" and awarded the "circle of excellence" for production volume in every year that we've been in the industry.