How to buy a foreclosure in Marin

Many buyers, especially first-timers, hope to purchase a foreclosed property at a bargain price, according to CNN Money.  While purchasing a foreclosed home can be a wise choice for some buyers, it is important that buyers understand the differences in buying at different stages of foreclosure and be prepared to take on the challenges typically associated with each.

• There are three basic stages of foreclosure in California: Pre-foreclosure, trustee’s sale, and repossession, often called an REO or real estate owned by the bank.
• Pre-foreclosure homes are in the foreclosure process, but have not yet been auctioned.  Owners of pre-foreclosed homes often try to sell the properties because they are “underwater,” meaning they owe more on the mortgage than the home currently is worth.  Many homeowners attempt to sell via short sale, where the lender must agree to accept less than the amount owed on the mortgage.  Buying at this stage of foreclosure often is a complicated and slow process. However, buyers of pre-foreclosed properties often are given the opportunity to inspect the home prior to purchasing, whereas this is not always the case when buying at other stages of foreclosures.
• The second basic stage of foreclosure is the public auction at a trustee’s or foreclosure sale.  Homes in this stage often are well priced, but also come with challenges to buy.  These homes may not be available for inspection and buyers may later discover the property needs numerous repairs.  As a result, many of the homes at auction are purchased by investors and contractors who have experience working with homes needing numerous repairs, or taken back as REO by the foreclosing lenders.
• If a home does not sell to a third party at the trustee’s auction, the bank takes the property–the final stage of the foreclosure process. Although homes in this stage typically do not offer buyers the best prices, buyers generally can perform a thorough inspection of the property prior to closing.

People we know who have been on the Marin County Courthouse steps for years tell us that many “newbies” have jumped in, and prices are being pushed up to the point where bargains are scarce now. To get the full story, Call Me or please click here.

Amid Market Torpor, Mill Valley Prices Tumble

The Marin real estate market continues to mirror the sluggish national economy. And while most cities saw solid increases in the average sale prices in the third quarter over the previous three months, Mill Valley average price plummeted twenty-six percent. See chart below.

Marin All Residential Q3 Sales Report

	AverageSale Price	MedianSale Price	UnitSales	AvgDOM	% Change from Q2 Average Sale Price
All Marin	$882,084	$696,000	609	100	3%
Belvedere	$3,179,167	$2,932,500	6	116	11%
Corte Madera	$978,328	$917,500	26	73	7%
Fairfax	$711,842	$645,000	19	106	3%
Greenbrae	$963,907	$929,000	19	71	2%
Kentfield	$2,378,688	$1,612,500	16	84	25%
Larkspur	$1,261,577	$1,252,900	13	142	10%
Mill Valley	$966,984	$870,000	73	88	-26%
Novato	$546,394	$481,000	178	104	5%
Ross	$2,645,654	$2,120,890	9	89	2%
San Anselmo	$889,767	$731,500	32	84	13%
San Rafael	$676,252	$625,000	140	93	5%
Sausalito	$888,516	$710,000	31	102	-1%
Tiburon	$1,753,153	$1,335,000	28	135	-4%

In the absence of a natural disaster or localized economic perils, there is no easy explanation for Mill Valley’s price crater. About the same number of homes changes hands in July – September as in the second quarter, and the ration of condo to single family is the same. If the drop was a reaction to mortgage availability or stock market activity, why would it not affect all of Marin? Sausalito and Tiburon were the only other towns to post a drop, but theirs were very modest.

Mill Valley saw a huge shift, as buyers migrated to the less expensive homes in large numbers.

	Mill Valley Prices	2009
	Q2	Q3
# Homes Sold <$1M	28	53
# Homes Sold >$2M	7	3

Does this mean your home has lost value? Not necessarily. The market is quite robust in Mill Valley, with 25% of the 181 available homes in escrow. Buyers are continuing to focus on the low end, however, and they are resisting the high end, with only three homes priced above $2M are in contract.

Call me now for a free price analysis of your Marin home – 415.300.0432. Get real-time market data on Twitter.

Cloudy With a Chance of Realtors

As the Marin real estate market continues to tighten, competition among agents for sales is becoming more intense. Sometimes it seems that they (we) are falling out of the sky like rain – or meatballs. While all agents share certain characteristics, like state licenses and business cards, the results we produce can vary significantly. After thirty years in the business in Marin County, I am happy to share a few tips to help you dodge the meatballs and choose the right agent for you.

But first, set your priorities and your goals. What do you want to get out of your real estate transaction, and by when? Get real.

-                      If you are selling, research the recent sales in your area so that you will make an educated choice in pricing. Do at least the superficial, cosmetic improvements that will make your home appeal to prospective buyers. Ask yourself, what’s more important to us, the money or the time? Do we want to hold out for our price, no matter how long it takes, or are we ready to price at the market and move on?

-                      Buying? Meet with a qualified mortgage professional and provide her with all the information she needs to get you a commitment from a credible lender. Then search the internet to get a general idea what you can buy for the money: in Marin, try www.GreatHomes.org. Ask yourself, what’s more important to us, the money or the time? Are we going to insist on stealing a home or waiting for the bottom of the market? Or are we motivated to make a fair deal and get on with our lives?

Here are some qualities you need to look for:

Market knowledge. Knows the inventory and keeps up with local trends. You want the person who represents you to have the facts at her fingertips and the skills to use them in negotiations.

Peer credibility. Marin is a small town and in this business you live or die by your reputation. Make sure that your agent is well known and respected in our local real estate community. Tag along on broker’s tour (Wed. or Thurs. mid-day) and observe how the other agents respond to your host, because his/her standing is critical to your success.

Seasoning. More than half of Marin agents were not even in the brokerage business five years ago. And while a newer agent may bring skills from another business or a youthful enthusiasm, this is their first experience with a down market. A few years ago, if they could fog a mirror they could sell homes. Today it takes deep skills learned in past recessions to produce results for you. Go with the grizzled veteran over the shiny newbie on this one.

Productivity. There are about 2,075 paid Marin members of the local multiple listing service, and in the past year only 313 have closed one or more sales (See, already our job is getting easier!) Remarkably, many agents advertise themselves as being Number One. Ignore the hype, and find an agent who actually listens to you, and asks you the e right questions to get your project moving forward. From the get go, your agent needs to deliver real value, in terms of market data and advice targeted to your needs.

Networking. Today there are two distinct markets where homes are offered for sale in Marin County.

-                      The traditional multiple listing service is available to all its members, and most of the MLS properties can be found on the internet at various aggregator sites. While you will find fairly-priced homes and realistic buyers, much of the activity here is distressed or bank-owned homes in lower price ranges, and bargain-hunting buyers tussle with stubborn owners who are living in the past. It can be difficult to sort through the clutter.

-                      Many of the choicer houses in Marin today change hands privately through a network run by the top agents (TAN). Your job is to work with an agent who has access and skills in both markets.

With more agents chasing fewer sales, I hope this helps you avoid most of the meatballs. Of course, call me direct with questions, 415.302.7787 or jmclaughlin@fhallen.com.