Santa Barbara Real Estate Voice » Foreclosures & Bank Owned

Are Bank Owned Sales Prevalent in Montecito? August 2011 Update

kevinschmidtchen — Fri, 30 Sep 2011 16:13:03 +0000

Here are the latest statistics for real estate sales in Montecito for August 2011. The shaded area with an ‘X’ states whether the property was a bank owned (REO) sale or not. Although many people would love to find bank owned foreclosure properties in Montecito, the reality is that almost all of the sales are still traditional sales in Montecito. Additionally, most of the REO’s tend to be at the lower end of the price scale.

View: Santa Barbara / Montecito Real Estate $1-3 Million

View: Santa Barbara / Montecito Real Estate $3-5 Million

View: Santa Barbara / Montecito Real Estate $5 million and Above

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For information on Real Estate here in Santa Barbara, Montecito and/or our surrounding areas, as well as any other aspects of life in our area, please don’t hesitate to contact Kevin Schmidtchen at Sotheby’s Int’l Realty.

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What Part of the Santa Barbara Real Estate Market Sees the Most Foreclosures and Short Sales?

kevinschmidtchen — Mon, 20 Jun 2011 02:58:57 +0000

Since the peak of our real estate market in 2007 and 2008 (Montecito until 2008), property values have fallen on average here in Santa Barbara around 35-38%. Certain unique homes have fallen somewhat less in value, while certainly other pockets of the market have fallen more in value upwards of around 40-45%.

Because of this reality, many people have unfortunately lost all their equity in their homes and have had to go the route of foreclosing on their homes or trying to sell their homes as short sales.

Often I am asked about distressed properties here in our town and depending on what you are looking for, you might be hard pressed to find them as they seem to exist mainly in certain price points.

What parts of the market have the most Foreclosures and / or Short Sales?

Over the last few years, the majority of our foreclosures and shorts sales have taken place with:

single family homes generally around the $350,000 to $800,000 price point
condos and town homes generally around the $190,000 to $550,000 price point

I would say that upwards of 80% of our distressed properties seem to fall within this criteria. We obviously have distressed sales across the board at all price points, but as you go higher in value, they are much less common.

What this definitely does not mean is that as you go up in value people are not in trouble. It is simply the reality that most of what we are seeing on the market as distressed properties are overwhelmingly in the lower end price points.

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What are The Most Crucial Components when Buying a Short Sale or Foreclosure here in Goleta, Santa Barbara and Carpinteria?

kevinschmidtchen — Thu, 05 May 2011 23:49:14 +0000

The obvious lure from a buyer’s perspective of both short sales and REO (real estate owned) properties is the chance to get a property at a discounted price.

Here in Carpinteria, Goleta and Santa Barbara, this opportunity does exists, but not without its pitfalls. The best way to deal with these pitfalls is to get educated about the most common “issues/nightmares” that come with these deals. Although there are many factors to consider…the biggest for most tends to be TIME.

TIME - The most crucial asset we have in life. When dealing with both short sales and foreclosures here in the Santa Barbara area, time is of the essence.

When it comes to any type of distressed property, the transaction will most likely take anywhere from a few weeks to a few months (bank owned) longer than a normal sale. With the case of short sales, this can be 3-8 months longer…also unfortunately without even the guarantee that you will close on the property. The reasons for this are numerous from the extra signatures, to supervisor-level approvals, to apathy on the banks end as well as investor involvement required to get the deal done. Banks 100% do not have/show the same sense of urgency that individual home sellers do.

One of the biggest issues with this “time suck” is that if you are getting a loan, your terms are usually only good and your rate is usually only locked for 45 days.

The key for you if you go the route of looking to buy any distressed property is simply “Expectation Management”.

Other Key Factors seem to be:

Banks generally will not take “low ball” offers. Banks owe their shareholders and investors a duty to get as much as they can for these properties. Bank owned is not code for “I can get this at a fraction of what it is worth.” Banks will price homes at or just below the fair market value and if they do not sell they will slowly reduce the price, not take some far fetched low ball offer. You can and will waste a lot of time, spin a lot of wheels and lose out on a lot of properties making low ball offer after low ball offer on distressed homes.
Last minute cancellations or extensions. Distressed property transactions have an uncanny way of being delayed at the last minute or never going through at all. Things just happen and I could give numerous ludicrous examples.
The mystery of it all. When you submit an offer on a normal home, you are likely to know what the outcome will be within a day or two and sometimes even hours. If things happen to take longer there is usually a normal reason and you know of the reason. With REO’s and short sales, you live in a mystery sphere for sometime. Also, no amount of your agent calling, pleading, prodding or nudging will push things further along in getting you the information you need.
Double standards. In normal sales, both the buyer and the seller are obligated to meet various time lines and you will be informed of these by your agent. Disclosures delivered and returned on a certain date, home inspection and contingency removal on a certain date, loan completed on a certain date etc. With REO’s and short sales, buyers are often dismayed to find that while the bank has taken weeks or months to sign or handle its side of the deal, you will then be expected to handle many things on your end in just a few days. Also if it is not done properly and you have to go back to the bank, you essentially start over and cost yourself some more time and frustration.

These are just some points to keep in mind. In no way am I trying to persuade anyone either way on whether to buy or not to buy a distressed property. Information is key and the simple reality is that you as a buyer have to be patient and expect delays, frustrations etc. if you go the route of distressed properties.

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Where do I Find The Least Expensive Real Estate in Santa Barbara CA?

kevinschmidtchen — Wed, 20 Oct 2010 20:02:37 +0000

A few times a month I am contacted by people (especially from out of town) who are interested in the most affordable areas of real estate here in the Santa Barbara area. Most often these people are very aware of the higher real estate prices here in our town and are expecting the prices to be what they area…but this is not always the case.

To us that live here, real estate prices are high, but we do understand the quality of life that Santa Barbara offers. We understand that when you are looking at a home that will sell for $1 million, you are most likely paying 1/3 to 1/2 of this value just for the lifestyle and the reality of living here in Santa Barbara.

So where are the most affordable areas within Santa Barbara?

Not looking at mobile home parks, the cheapest options to own real estate in the Santa Barbara area are within condo complexes scattered around town as well as some single family homes here and there. Here is a list of the 10 least expensive sales in Santa Barbara since January 2010.

410 Camino del Remedio #F. Sale Price $207,000. This is a nice condo complex located between Santa Barbara and Goleta. Most of these units have County Affordable Unit Restrictions, but not all of them.
231 Cottage Grove. Sale Price $265,000. This was a bank owned property needing work located in the downtown area of Santa Barbara. It was located on a very small lot, but still an incredible price. Most fixers in the downtown area are selling for at least $400,000…again based on location and condition etc.
1216 East Montecito Street. Sale Price $275,000. This was a complete tear down and pretty much sold for lot value.
3914 Via Lucero #D. Sale Price $290,000 to $305,000. This is a small condo complex located off of upper State St. Most of these units were in foreclosure this year and needed cash offers…hence the lower prices. Units that lenders would lend on sold in the $400,000 range.
1233 East Gutierrez St. Sale Price $315,000. This was a true fixer located on the lower east side of Santa Barbara. Most of the sales this year in this area are ranging from about $450,000 to $600,000 based on exact location and condition. This sale ended up being the least expensive.
864 Highland Drive #7. Sale Price $340,000. The SB Highlands is a great larger condo complex located up near the Mesa. Many of the units have good city views and even a few with peak ocean views. Most units are 2 bed 1.5 bath and some 1 bed 1 bath.
2117 Castillo #A. Sale Price $342,000. This was a bank owned newer 1 bed 1 bath condo.
645 North La Cumbre Road. Sale Price $350,000. This was a tear down and again sold for lot value.
229 Por La Mar Circle. Sale Price $359,500. The Por La Mar condos are great condos located just a few hundred feet from East Beach. Wonderful location with tennis courts, lush pool area and walking distance to East Beach. Most sales in here are the 1 bedroom 1 bath or the 2 bedroom 2 bath. There are a few 3 bedroom units.
1233 Richelle Lane. Sale Price $370,000. These are the town homes across from Eilings Park and very close to Hendry’s Beach. This particular unit was a short sale.

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Are you an Ideal Candidate for a Short Sale here in Goleta CA?

kevinschmidtchen — Tue, 08 Jun 2010 20:57:50 +0000

Tips to Avoiding Foreclosure: Who is the Ideal Candidate for a Short Sale?

The reality for people that are unfortunately facing foreclosure is not something that is taken lightly. The prospect of not just losing your home, but dealing with all the emotional and financial realities that come with it can be more more than overwhelming.

Fortunately, certain people may be in a position to avoid this legal, financial, and emotional turmoil by going the route of a short sale.

Do you qualify to obtain relief through a short sale of your home?

Here are some of the qualifications a bank is looking for when determining whether you might be able to go the short sale route and get relief from your loan obligations.

Keys to what the banks are looking for are people who:

Have lost their job and are unable to obtain comparable employment.
Have serious long-term medical conditions that impact their current financial and future financial situation.
Have experienced a true family hardship.
Are required to care for a relative that has moved into their home.
Have not refinanced their original purchase loan.

Before you go the route of foreclosure and hobble your credit, find out if you are a candidate for a short sale by contacting the bank and asking the above questions.

If you have further questions and are looking for more concrete answers, please feel free to contact me. I will be happy to assist you in guiding you through the best course to take for your personal situation.

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Basics of a Short Sale with Regards to Real Estate in Santa Barbara CA.

kevinschmidtchen — Mon, 24 May 2010 03:56:34 +0000

If you are in a financial position that you are behind on your mortgage payments or are simply considering not making these payments because the value of your home has dropped below the open market value, then you are most likely considering the potential option of a short sale of your home. If so, then most likely you are also wondering how the whole process exactly works and how it will unfold. There is no need to feel confused as most of the steps are very basic.

Deciding that it is best for you to sell your home and get “out from under your payments”
Getting in touch with a Santa Barbara Real Estate agent such as Kevin Schmidtchen that has true knowledge of the short sale process
Put your home on the market at a low enough price to encourage buyers to make an offer on your home
Once an offer is accepted by you the seller, it will then be sent to the bank for consideration
Bank will then assign a negotiator to your “file”
Bank obtains Broker Price Opinion (BPO)
Approval process takes place
Bank determines if they are going to sell the property at the offered price
Once a short sale receives approval by the bank, the property is in a normal escrow that will close in roughly 30 to 60 days

Note…This entire process can require anywhere from three to six months on average. During this time, feel confident that as a short sale specialist, I will communicate with you and walk you through every step of the process. The goal is to make the process for you the least stressful and hectic as possible and to help you avoid foreclosure.

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Tips to Avoiding Foreclosure Here in The Santa Barbara, Montecito, Goleta and Carpinteria Areas

kevinschmidtchen — Wed, 05 May 2010 19:22:56 +0000

As a Santa Barbara real estate agent, one of my main focuses is to keep people first. As I have grown in this business the last 9 years and the community as a whole, I have become more dedicated to my clients than ever before. A great example of this is my desire to help clients who have found themselves in a financially distressed situation with the possible loss of a home that they have worked so hard to earn.

In order to help, I have tried to learn as much as I can about the foreclosure and short sale process over the last 3 years. Through all my research, study and hands-on experience, I have obtained a vast amount of tools and knowledge regarding the overall process and programs offered by lenders to help homeowners (you) keep possession of their homes.

If you find yourself in a position where you are struggling to keep your home, please feel free to give me a call if you would like to talk about the processes and introduce you to various options you may have. I will help however I can.

If you unfortunately do end up in a situation where a short sale or foreclosure seems the likely course, I can also guide you through the lengthy and complex processes so that you will not find yourself in a place that is potentially worse off than the one in which you are currently in now.

The possibility of losing your home is a huge deal, especially to you. If you would like to work with a Santa Barbara real estate agent like myself who has the knowledge and compassion to be of help, please feel free to reach me at anytime.

Trying to Avoid Foreclosure?
Contact Kevin Schmidtchen Today (805) 689-6877 or kevinschmidtchen@yahoo.com

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Positive Real Estate News – California Home Defaults Going in the Right Direction

kevinschmidtchen — Sat, 24 Apr 2010 05:19:54 +0000

A 40.2% drop in the first quarter foreclosures

A very much hoped for and somewhat surprising large drop in first quarter defaults suggests that the overall foreclosure crisis is easing here in California as a whole. New data suggests and supports evidence that the federal government and big lenders are doing their part in stepping up efforts to keep troubled borrowers in their homes.

“Mortgage default notices — the first step toward foreclosure — plunged 40.2% statewide in the first three months of the year compared with the same period in 2009″, according to San Diego research firm MDA DataQuick.

One of the big fears and almost suppressed real estate topics the last many months has been the so-called upcoming second wave of foreclosures. These current numbers suggest that the housing market might not after all become flooded by a fresh stockpile of bank repossessions.

“It is surprisingly good news,” said Gerd-Ulf Krueger, principal economist at Housingecon.com. “There is still a lot of supply lurking out there, but at this point, it looks like it is pretty much under control.”

“In coastal California, things are looking pretty decent,” said Richard Green, director of the USC Lusk Center for Real Estate. Santa Barbara Real Estate fits into this category as our market overall has seemed to stabilize the last 6-9 months in almost every area except the very high end. Sellers are realistic with prices and buyers are buying. On well priced homes in the last several months, we are also seeing a series of multiple offer situations across every price point.

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New Luxury Bank Owned Opportunity – Montecito Foreclosure with Great Views $3.5 Million

kevinschmidtchen — Mon, 08 Feb 2010 04:56:30 +0000

One of the few luxury banked owned homes to come onto the market happened this last week. The bank will be taking a look at offers early this coming week. Wonderful ocean, harbor and city views on roughly 1.3+/-acres. Currently under construction although much of the home is complete. 3 bedrooms, 2.5 baths with a guest home, 3 car garage which is still under construction and in the beginning stage of being converted into a 2 bedroom guest home. Can be converted back to garage or will need to submit permits to continue work. This is a true opportunity.

UPDATE: This home sold with multiple offers at asking price of $3.5 million.

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Pros and Cons of Buying Foreclosures in Santa Barbara, Carpinteria and Goleta CA.

kevinschmidtchen — Mon, 08 Feb 2010 04:44:46 +0000

As a home buyer in today’s market here in Santa Barbara, Goleta and Carpinteria, you may be able to get “deals” on foreclosures, but buying foreclosures can be risky as well. If you are looking at foreclosures as an option for a home purchase, it is crucial to understand the many potential cons associated with the one obvious “pro” of buying a foreclosure.

First, there are a few definitions of properties that are generally thrown around and become universally known as “foreclosures.” A “pre-foreclosure” for example is a home which is in danger of falling into foreclosure, but is still owned by the homeowner. An example is simply a homeowner that has stopped making payments and has received a notice of default. A true “foreclosure” is a property that has already been repossessed by a creditor or a lender to recover the amount owed on it and is being put on the open market. These foreclosures can be bought at either an auction or later on the open market as “bank-owned properties” (REO properties) from a lender.

The Obvious “Pro” of Buying a Foreclosure in Santa Barbara

The obvious potential to purchase a home at a lower-than-market-value price. DONE! That is that.

Banks are often willing to offer foreclosures at a discount simply because the longer they hold onto these properties, the more it will cost them in terms of taxes, maintenance, etc. Here in the Santa Barbara area, foreclosures can be found at all price points (starter homes, luxury homes, etc.), but the vast majority are situated in the lower end price range from about $250,000 to $750,000.

Some of The Not So Obvious Cons to Buying a Foreclosure in Santa Barbara

Since “good” foreclosures can sometimes be offered at significant discounts, you will almost undoubtedly face steep competition and bidding from other buyers. In a town such as Santa Barbara, often these buyers are all cash and are tough to beat. But this is not always the case.
If you buy a foreclosed home at an auction, you may also find yourself in a situation that you have to pay cash (that day!) and may not be able to do proper inspections of the home before purchasing.
Not all lenders offer loans for distressed properties.
Many foreclosures need serious and costly repairs. This, I personally think is the most important aspect that needs to be understood. I think many buyers (especially first time home buyers) are truly unaware of the costs to repair and update a home that needs “work”. I also believe that many uneducated real estate agents do not properly/can not properly inform their clients of these costs. Too often I hear Realtors and prospective buyers looking at general fixers and foreclosures that need a good amount of “work” and saying comments such as “But if you get this at $650,000, then all you need to do is throw in $50,000 to $60,000 and you are done.” In reality this $50,000 to $60,000 is almost always $100,000 to $120,000, if not more, plus the added stress, plus carrying cost, plus enormous amounts of time etc.
Foreclosures tend to sit vacant for periods of time and have been neglected which can lead to major maintenance issues.
Sometimes foreclosure buyers themselves have to start eviction proceedings and pay legal fees to get the previous tenants/owners out of the home.
Often foreclosures are bundled around other foreclosures and thus the neighborhood home values are very depressed and will take longer to rebuild.
Etc.

I encourage anyone who has the interest in looking at foreclosures to do so. Just be educated and hopefully work with an agent that understands the realities of these properties as well as the true reality of costs to fix up homes that need “work”.

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