REO stands for Real Estate Owned. It is a term banks use for property they have acquired through the foreclosure process. In California the foreclosure process takes about 4 months, and is usually initiated by the bank after a monthly payment or two is delinquent. When the foreclosure sale occurs, the opening bid is what is owed to the bank, which includes the original loan plus missed payments, late charges and penalties, foreclosure costs, taxes and more. The person who wants to buy the foreclosure property at this sale auction must have all cash (or cashier’s checks). The opening bid is often more than the current market value. Usually the property goes back to the bank and becomes an REO. Generally it is then listed on the open market and competes with other properties for sale.

Two of the old ranches, formally known as The Bargo Ranch and Corrales Ranch, sold last June in the prestigious Santa Ynez Valley as one. The over 3200 acres which was comprised of 18 legal parcels and sold for approximately $25 million with each parcel being recorded under separate LLC’s. This was reportedly the largest single real estate transaction ever for the area. There was a $24 million sale in 2006 and previous to that was Michael Jackson’s purchase of his 2800 acre Neverland Ranch, in the late 1980’s, which is believed to have been purchased for a sum closer to $20 million.

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Whether you plan to own your house long-term, want to fix up a dump and sell it for big bucks or are just looking for a little change in your surroundings, knowing what to improve, what to gut and where to start are always challenging decisions. It is best to examine every room in the house and address either the area you frequent the most or the one that has forced your hand (How much longer can you wash the dishes in the bathtub?). The first two things you need to consider are your budget and time line.

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For those of you who were fortunate enough to have been born or raised in Santa Barbara … KUDOS!

For those of us who have been fortunate enough to be transplanted to Santa Barbara … KUDOS again

Moving from Minneapolis, Minnesota, as it is termed with endearment as the “frozen tundra” of the Mid-West, to stunning Santa Barbara, was truly like the cocoon awakening! It was at first unusual to see shorts and shirt sleeves as year round attire; however very easy to become accustom to and duplicate.

The weather: stellar! The people: superb! The community, the culture, the arts: who wouldn’t want to take part?
If you have been considering Santa Barbara as a permanent destination … again KUDOS!

TRY SANTA BARBARA. YOU’LL LOVE IT!

Whether you live in a two-bedroom cottage, a ranch-style home, a condo or a large estate, a little greenery can go a long way toward improving the image that your home projects. Think about this … according to the American Nursery & Landscape Association, landscaping can add 7% to 15% to a home’s value—and that’s true for condo and town home owners as well. Patios, fountains, decks and foliage all add value to your home, while providing you and your family with recreation areas, privacy and a peaceful environment.

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It goes without saying that the person with the ability to grant or deny access to massive amounts of cash is a critical player on your team. Here again is where your relationships can pay off.

If you have never bought anything more substantial than a winter coat, it is time to hit the pavement. To be a star flipper, you need a friendly lender in your back pocket. Local banks are your best bet, as sellers frequently frown on offers from an out-of-town institution. That is not to say that you’ll never close a deal if you choose your sister-in-law in Hawaii as your financier. However, if yours is one of multiple offers, you want to do everything you can to make it as attractive as possible.
A quick word about money: A lender will take several factors into account (primarily your income, credit score, and the price and value of the property in question) to determine how much money you are eligible to borrow.

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If selling a home is on your list of “New Year’s Resolutions,” here is a checklist of things you can do to get started:

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If buying a home is in your list of “New Year’s Resolutions” here is a checklist of things you can do to get the process started:

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According to Chicago Title Company “Real Estate Market Watch” Grant Deed Recordings for Resale’s during 2007 were up 3% in the Santa Ynez Valley, but in the other North County areas  Lompoc was down 31% and Santa Maria was down 22%. It is interesting to note that on a month to month comparison from the previous year (2006) the SYV equaled or surpassed the previous year 6 times, whereas Lompoc only exceeded 1 month and Santa Maria did not exceed any.

“If you don’t like the weather, wait a minute”…That’s a saying heard often in places where the weather can turn on a dime, making it very difficult to forecast. And while the weather patterns can change direction quickly, the recent movement of stocks and bonds rivals the rides at an amusement park.

“Turbulent” and “volatile” best describe the action in the markets. Stocks and bonds have had wild swings of late as the possibility of a recession loom. The Federal Reserve is concerned about a recession, but doesn’t want to cut rates too deeply because it may stoke the flames of inflation. In a speech last Thursday, Fed Chairman Ben Bernanke signaled the Fed will step in with interest rate cuts as necessary in an effort to prevent a full-blown recession from taking place. It sure looks like the Fed will break off a 50 basis point (1/2%) interest rate cut in its battle to fight a potential recession when the Fed next meets to determine monetary policy on January 30th.

But remember that because Fed rate cuts may add to inflation pressures, home loan rates may actually increase after a cut by the Fed. We have seen this type of chilly response to Fed cuts many times before. Just back in September, the Fed cut by 50 basis points, but home loan rates worsened by 0.25% in just 3 days!

THE MARKET ACTION SURE IS HEATING UP, BUT IT MAY BE TIME TO PUT A FREEZE ON YOUR CREDIT PROFILE TO STOP IDENTITY THEFT. FIND OUT IN THIS WEEK’S MORTGAGE MARKET VIEW!

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