Mark Wisterman's Paradise & Lake Oroville Real Estate Blog

Don’t panic everyone!!!! These numbers do not appear to be accurate this week due to the Oroville Association of REALTOR®, The Chico Association of REALTORS®, and Paradise Association of REALTORS® switching to a new multiple listing service. It appears that some sales have not yet been reported into our new system by some of the Lake Oroville REALTORS®. By the looks of the numbers, I certainly hope that is the case.

Don’t spend much time on this but be sure to check back in next Tuesday to see how we are really doing.

Those of you who know me, whether you are a client, or another REALTOR®, or a friend, know that I take the business of negotiating and successfully completing real estate transactions very seriously. You also know that I do not believe for a moment, that just because someone may have a real estate license or calls themselves a REALTOR®, means that the particular someone is competent, or educated enough to properly represent their clients best interests. Let’s face it, it is way too easy to get a real estate license in this state.

It takes more than a license or the paying of dues to the National Association of REALTORS® (NAR)  to acquire the proper level of competence to do the job. Above all else it takes education and the desire to stay informed of the latest trends, rules, laws, etc.

This is why I am very pleased to announce that each of my associates have thought it important enough to spend the time necessary to join me in completing the educational requirements set forth by NAR  in order to obtain our Short Sales & Foreclosure Resource Certification. This is the ONLY “distressed property” certification recognized by NAR. A certification that, at the time we received ours, had been attained by only 2,500 of the nearly 1 million REALTORS® nationwide.

Through the attainment of this certification we have gained valuable knowledge and have access to the resources necessary to counsel and better guide our clients through the foreclosure and short sale processes. In fact, (here comes the commercial), we are the only office in the Lake Oroville real estate market, and maybe the entire Butte County real estate market, where every associate in the office has earned the certification. Are we “experts” yet? Nope. But, knowing my associates as I do, we are going to be as close as you can possibly be as this market begins to move away from foreclosures and more into the short sale arena.

Oh, just a side note regarding “experts”  in this business. If someone calls themselves that, in most cases you should probably run away as fast as you can. Case in point-There is one REALTOR® in town that claimed in her advertising that she was a “Short Sale Expert” and yet had never, ever negotiated a short sale transaction of any kind.!!!!!!!!!!!

Newly released national existing home sales numbers, by the National Association of REALTORS®(NAR) for November, show exactly what we have been discussing on this Lake Oroville real estate blog for the past few months. The rush to beat the previously set deadline for the federal first time home buyer tax credit pushed sales numbers up for the month.

Nationwide sales we up over 7% compared to last month and a whopping 44% over last November. Keep in mind though that last November we were in the throws of  “financial panic” as the banking crisis continued to grip our attention. The panic caused by the media and the government sent almost all buyers to the sidelines as they waited to see what the next “Great Depression” was going to look like.

In the West, the numbers were also positive. Existing-home sales increased 10.6 percent to an annual rate of 1.46 million in November and are 28.1 percent above November 2008. The median price in the West was $231,100, which is 4.1 percent below a year ago.

With the frenzy to beat the tax credit deadline now behind us, it will be interesting to see if we get the same “clunker effect” hangover from which the auto industry is now suffering. I heard a report on the radio yesterday that said that it may take 5 years for auto sales to return to their pre-recession levels. This after billions of dollars were paid to buyers to bribe them to buy a new car. Hopefully this is not a sign of things to come when the homebuyers’ tax credit expires in April.

Even the NAR is unsure of the effect this tax credit will have over the long haul. Here is a quote from NAR’s cheif economist which I think is interesting. Lawrence Yun was quoted as saying: Read the rest of this entry »

So you just had your offer accepted on a property in the Lake Oroville real estate market that is owned by a bank. Your agent opens escrow with the title company and advises you that the bank’s agent will be sending the appropriate disclosures for your review.

When you finally get the disclosures all you see written across them are the words, “Bank owned, Seller Exempt.” You ask your REALTOR® about the lack of disclosure and he or she tells you that the bank is not obligated to provide disclosures to you because the home was taken back in foreclosure.  Only problem is, that this is not exactly true.

While it is accurate that the banks are exempt from providing some disclosure documents, they are not exempt from ALL disclosure requirements. And your REALTOR is not exempt from ANY disclosure requirements. Unfortunately what I am seeing is banks, and agents alike, ignoring their disclosure obligations by hiding behind the “bank owned”  excuse.

Here is an example of what I am talking about.  The following link will take you to a disclosure a BROKER from another office sent to one of my associates as part of the broker’s disclosures. By the way, I really wanted to leave the broker’s name and office information visible but thought  that even though it demonstrated his incompetence, I don’t want to appear unprofessional.

Click Here to See “Disclosure” 

This document is a form that most REALTORS® are now using to fulfill their duty to perform a diligent visual inspection of a home and report their findings to the buyer. Writing “exempt” across the front of this form does not relieve the broker of his LEGAL duty to disclose and is not a correct use of this particular form.

As a buyer you, and more importantly your REALTOR® need to insist on getting the required disclosures from the seller, whether it be a bank, or not. Don’t continue with your transaction if you are being deprived of your legally required disclosures.

We’ll review what these disclosure documents are in upcoming posts.

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I’m sure that after 8 months of reading my blog posts you I know that I am pretty much a numbers guys. I don’t take much stock in what I am told about the condition of the real estate market by media types because I know that they provide no perspective on that about which they are reporting. Drama and gloom and doom is good for ratings, so for the most part, that is what we get.

As your self appointed interpreter of real estate news and information for the Lake Oroville real estate market, I find it important to dive into the data provide to you with what I think is really going on in this market. Every once in a while, though, I get hold of a report that does a whole lot better job of explaining the situation than I can. (I know…that is just hard to believe).

The report I am providing a link to today comes from Jim Moll of Wells Fargo Advisors. As a longtime Oroville financial advisor, Jim is gracious enough to send reports to me and other Oroville REALTORS®from time to time to assist us in keeping our clients informed of market conditions. Fortunately for buyers and sellers in the Oroville, Chico and Paradise areas, this is the only real estate site on which you will see reports of this nature.

Either click here to see the report or click on the graphic. And remember, always read or listen to the story behind the headlines.

5:19pm – Attention buyers and sellers in the Lake Oroville real estate market.

The California Association of REALTORS® (CAR) just announced that the U.S. Senate has passed the unemployment extension bill which also contains an extension and expansion of the homebuyer tax credit. According to CAR the bill now moves to the House of Representatives for their consideration.

As usual, I will update you as more information comes available.

5:35 pm- Here are more specifics on the bill that passed the U.S. Senate earlier today. Click here for report

My e-mail box and most of the social networking sites I belong to, including Facebook, are all abuzz with real estate agents trying to be the first to report that the first time home buyer tax credit has been extended.

It is great that they want to get news of the extension to the consumer as soon as posssible. The only problem? It hasn’t been extended yet.  What we actually have at this writing is an agreement in principle to extend and enhance the credit. An agreement that has yet to be voted on and an agreement that can possibly be changed before getting to the President’s desk for signature.

I have provided a link to an article published just hours ago by U.S. News and World Report that gives an in depth look at what is being considered and what the status is.

Click Here to See Report 

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With the expiration of the Federal First Time Home buyers tax credit looming, along with discussions over extending the deadline and expanding the program, I thought now might be a good time to consider what the impact and future  consequences of these programs may be.

Loyal readers of this blog know that I believe that free market forces are a much better tool than government intervention when it comes to solving this real estate market downturn. Unfortunately though, the current state of the real estate market was created by government intervention. Banks being told by Congress to loan to less than historically credit worthy borrowers and monetary policy that flooded the market with “easy” money created a real estate bubble that burst with such force that it sent a “nuclear” mushroom cloud of foreclosures raining down on every community in this nation. We are now dealing with the fallout of these foolish mandates and policies by expecting Congress to fix what they screwed up in the first place.

So here were are, some 3 1/2 years into this correction, and it seems that the more things change, the more things stay the same. Not only do we have the Fed keeping interest rates artificially low, we have cries from REALTOR® organizations and other groups to continue to provide a sort of “housing welfare” program by paying someone to buy a house. Not only that, but the call has now gone out to pay MORE money to people to buy a house. 

I know that my view of this is not going to be popular with my brethrens of real estate, but as you know I do not blog in order to espouse the populist view. I blog to share my perspective about real estate issues facing my fellow Americans.

The big question in my mind is how do we reform this housing welfare system that has been created without causing greater harm to the market and property values? When will we be able to end these programs and how? What happens when the Fed decides to end the cheap money gravy train?

As I look at the Oroville real estate market stats each week I see who is really benefiting from the current incentives..THE BANKS!!!  Virtually the only segment of the real estate market that is being impacted by these policies is the foreclosure (read bank owned) market.  I grant you that shrinking the inventory of foreclosures is an important part of the cure but is not the only part. The greater urgency is home valuations. The market cannot return to health until a floor is put under prices and we have significant price appreciation that enables those who own a home to have sufficient equity to either refinance or sell. 

Until that happens I consider these credits more of a bank bailout than a housing stimulus plan.

I welcome your comments on this.

The saga continues with the Lake Oroville PUD.

District management continues to make plans to implement Ordinance 01-09 which will halt the sales of many Oroville homes in the district while requiring testing of sewer laterals and any repairs they deem necessary.  Repeated meetings with the district by members of the Oroville Association of REALTORS® have resulted in nearly no progress in having  the Point of Sale provisions of the ordinance repealed. In fact the only progress that has been made is that LOAPUD has pushed back the implementation of the point of sale provisions to January 1, 2010. Not because they are looking at alternatives that actually address their problems, but to, according to the official minutes of their board meetings, ”provide a window for the effected parties (REALTORS® and title companies) to develop the District’s policy into their  business plans,” so that the “program could be implemented by the first of January, 2010.”

It has carried no weight with District officials that their policy will result in a time frame of over 35 years to fix a problem in the Oroville real estate market that I feel they have characterized as a perilous problem with inflows to the undersized sewage treatment plant.

The fact that many other sewer districts have agreed that the point of sale approach is the least effective way of maintaining the integrity of their sewer systems, and protecting the environment, has also been of no assistance in trying to educate our district officials that their policy, while noble in its attempt, will take far too long to affect any change in unnecessary sewage plant inflows, and will continue to threaten the environment.

Even knowing that many sewer districts, that have  implemented point of sale mandates, have subsequently rescinded these same mandates because of their ineffectiveness and burdensome drag on the housing market, and the economy in general, has not swayed LOAPUD.

The Oroville Association of REALTORS® is continuing to talk with LOAPUD to get this provision repealed. But, I must say,  having set in on these meeting with the District, I see no indication that they have any intention of changing course.

This is why I am calling on each of you to get involved in this issue. At this time this the only public forum where this issue will be continuously discussed until LOAPUD sees the error they are about to make and backs away from the point of sale mandates.  This blog however will not get the job done on its own. It is now your turn to let your voice be heard. Contact the District’s office by phone, e-mail, letter, or in person at their next board meeting and let them know that this policy is not a good idea.

 To some of my fellow REALTORS®, and probably to LOAPUD too, I am seen as a “loose cannon” in this debate; choosing to go directly to the public instead of keeping things “private” so as not to create any “bad blood.”

Once again I want to be PERFECTLY CLEAR. My intention is not to impugn the integrity of anyone at LOAPUD. I have no reason to doubt that they are trying to do the best they can with what they have to work with. The simple fact is that the point of sale is not a solution, it actually causes more problems.

And if stating one’s opinion publicly about an issue that directly affects the public is being a “loose cannon”, then maybe we need more loose cannons in this world.

Host:  Welcome everyone, to the premiere of America’s newest blog show, Who Not To Trust. Where we interview some of the most unsavory people in the the real estate business. Today’s show is coming to you from the real estate market of  just about Anywhere USA.

Today’s topic: How some  buyer’s agents are putting their commission ahead of their duties to their clients.

Our special guest today is one of the areas self-proclaimed “top producers” of real estate for buyers, Mr. I.B. Greedy.

Host: Welcome I.B.

Greedy: Oh, please,  just call me Greedy.

Host: Ok, Mr. Greedy, welcome to today’s show. My sources say that you have devised a new way of increasing your commission in this very difficult market .

Greedy: Well yes, as a matter of fact I have. But how did you find out about it?  This was supposed to be a secret among the Greedy family.

Host: I am not allowed to reveal my sources but, trust me, they are very reliable. So tell me about this new plan.

Greedy: Well,  if you insist. Here is how the scam, er, I mean plan works. I am sure that you have heard that appraised values for some homes are coming in less than the contracted purchase price.

Host: Yes, I am aware of that.

Greedy: Then you must also know that an appraisal that comes in short can threaten my deal. In the past there have been three options when this problem arises. 1. The seller accepts the lower price, 2. The buyer agrees to pay the higher original contract price, or 3. The transaction is cancelled because neither party budges.  Recently, though, we have resurrected a long forgotten 4th option.

Host: What would that be?

Greedy: Finding a way to get the appraised value increased by researching comparable sales to see if there are any sales that the appraiser may have missed that would support a higher value.

Host: So the seller’s agent does this research right?

Greedy: No, I do it too.

Host: But you are representing the buyer, right? 

Greedy: Right!

Host: Do you tell your buyer when the appraisal comes in low?

Greedy: Only if I can’t figure out a way with the seller’s agent to justify a higher value.

Host: You mean you “conspire” with the seller’s agent to come up with a higher value.

Greedy: In our family we call it “cooperating”.

Host: So wouldn’t the lower price benefit your client?

Greedy: Oh, sure. But the lower price means a lower commission for me. Or, if the deal dies, I don’t get any commission at all! I can’t let that happen, no matter what.

Host: Don’t your ethics……

Greedy: My what?

Host:  Your ethics.

Greedy: What are those?

Host:  You know, the duty to put your clients needs above all else?

Greedy: Heh, Heh, that’s funny.

Host: So to sum this up, you and the rest of your Greedy family are more concerned about your commission than your clients well being.

Greedy: Yep, you get the picture.

Host: Well, thank goodness your family is small.

Greedy: We’re not a small as you might think!

Host: Well, there you have it folks, another reason to be careful when choosing a real estate agent to represent YOUR interests. Remember, not all REALTORS® are like this, but there are just enough of them that they unfortunately taint the rest of the industry.

OROVILLE REAL ESTATE, HOMES, CHICO, PARADISE, FOR SALE, LISTINGS BUTTE COUNTY, NORTHERN CALIFORNIA, CA