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**WOW** Silicon Valley Real Estate Is MOVING FAST

Just in case you haven't heard the News...which, by the way, is always reported after the fact,
Real Estate sales have taken a sharp turn for the better! I saw this coming months ago and warned my clients that if they intended to take advantage of the slow market and low rates, they had better hurry up and find a home.

Though it's far from a complete recovery, homes that are priced right are flying off the selves with mulitple offers. The low end is moving the fastest and homes in Silicon Valley priced under 300K are disappearing. The Interest rates are low right now but seem to be moving up and down a little faster than before the increased sales began. The fed won't need to keep them down if the increase keeps going on as fast as it is now.

Due to multiple offers, prices are rising. These price increases are not reported as they actually happen. This is due to the fact that the reporting agencies are reporting closed tansaction and since many takes 30 -45 days to close, the public is getting the notice 30 to 45 days after the fact!

My advise....Get off the fence...Stop waiting.....the bottom is already moving up.

THE BIG BAILOUT! or... Loan Modification

What Do You Know About the Bail Out? Are You About to Loose Your Home??

Well like the rest of us you're probably getting mixed messages about the Government Bail Out . After checking with several of my clients and discovering that there is a lot of incorrect information floating around I decided to check with a couple of banks.

Each bank is handling the bail out differently. So... it's important to check with the bank that holds your mortgage.

Some banks told me that they are requiring good credit (685 fico score) a hardship letter, proof of income, and your bills can't be more that 35% to 40% of your income. Many people that need loan modification can't fit into these parameters

In some cases if you owe more that your home is worth the bank may reduce the amount you owe. However they are leaning more toward rate reductions and extended time periods. For example, if you have a 30 year mortgage they may extend it to 40 years and this would lower your payments.

"New Hope" Is the name given to the new "FHA Bail Out Program". It has some advantages but again it's not going to work for everyone. Be sure to ask at your bank about how the FHA program works and if it will work for your situation.

My advice is to go to your lender and ask questions. Most of the lenders have a form you will need to fill out to get started. The faster you act the sooner you may get help. Don't wait! The lines will form fast.

AUCTIONS :"What You Need to Know

You've heard about real estate auctions and you may be wondering if this is a good way to purchase your next home.

Some people have had a successful experience...some have walked away with what they thought was a great deal! Others have sorely regretted the experience.

I recently went to a real estate auction with one of my clients and I was greatly surprised. Here is what happened.

We arrived about 10:00 am. There were four huge buildings and a large tent outside. The auction was going on simultaneously in all the buildings. (and tent). The spotters were communicating the bids to the auctioneer via walkie talkies from each building. The properties were viewed by the audiences via big screen monitors and speaker systems in each building.

Before the day of the auction my client and I had gone to look at several of the properties that he was interested in. Most importantly, I had talked to a past client of mine who told me that his sister had worked for the auction company. She had hired him & several others to bid. He was paid a $100 each day. He was given a list of properties and told to bid on them if they didn't reach a certain price. He was a shill. These people are hired buy many of these auctions companies just to make sure that nothing is sold below the minimum that the seller wants for the property. I don't know if all auctions operate this way but how can you know?

When we had arrived that morning we ran the gauntlet of stacks of people all in line to get bidding numbers. First we had to show that we had a cashiers check for each property that we wanted to bid on. $5,000 for the first purchase and $10,000 for each subsequent purchase. It was required to have a check book for the balance of the deposit if you won a bid. Buyers are also required to bring a prequalification letter from their lender, and a valid ID (drivers license will do). I, as an agent for a client, needed a letter from my broker saying it was OK for me to represent my client at the auction (since I am my own broker I just wrote the letter my self). It had to be on the company letterhead. To complete my package I had to have a copy of my real estate license. And by-the-way don't think your going to go there with any of this package missing and be allowed to bid. The rules are very strict if you don't have your check book, I hope you're close to home because you will need to go and get it!

The buildings were so full of people that there was not a single seat left. People were standing along the edges of the crowd. The big tent outside had a couple of seat left so we sat there. After freezing in a drizzling rain for half a day, the properties we were interested in finally reach the auction block. As soon as my client began to bid one of the spotters move over into position right next to him. Every time someone else bid she would encourage him to bid higher, repeating what the last bid was and every time he bid she would throw up her hands as a signal to master spotter who would immediately send the message over the walkie talkie to the auctioneer. This went on for a very short time but was extremely faced paced. The first two homes went higher than my clients limit and so he decline to bid any further. The third one however... he seemed to really want so he actually bid higher than his limit and became the successful bidder. The property was his!

Think this story is over..not yet! By then it was nearly 5:00pm. Immediately the contract team moved in. These were the guys sent over to get the contract signed. The contract was another surprise. It was over 30 pages. All written in favor of the sellers. I saw nothing that could possibly protect my buyer...Nothing! This is a real "Buyer beware" situation. Here are some of the other things that I found disturbing..

1. Even though we had gone through all this trouble to buy this property the bank had the right to cancel our purchase within the next 15 days. (This is probably in case the shill was sleeping.)

2. There were absolutely no rights of inspection. If you hadn't gone to the open house you would not even see the inside of the property before you close. You are buying As-Is with no rights of inspection! What if the foundation was compromised or the plumbing was leaking throughout the structure.

3. You needed a 5% deposit on the first property. This included your cashiers check along with a personal check. If you buy a second property 15% deposit is required. On normal sales a 3% deposit is the maximum allowed under the default clause in normal contracts.

4. There was a 5% premium added to the bid. My clients bid was $370,000 so an additional $18,500 was added to the sale price. And this also increases your property taxes on the home.

5. There was a $500.00 per day penalty for not closing on time.

6. Thirty days later we went to close the escrow. The escrow office was so over taxed with all the auction properties that they couldn’t even give us an escrow officer to sign us off. Our questions were answered by a notary hired by the escrow company to do the signing. Several big mistakes were made and we had to return to correct them.

7. The escrow officer told me that the day after the auction many people had called and expressed that they had made a mistake and regretted their purchase. Could they change their mind? The answer was “No” not without losing their deposit. Have you ever tried to get back a cashiers check back after you signed it over to an auction company? It might be possible but I think you’ll need a lawyer!

If you still think it’s a good idea to buy your home at Auction… go head…. “Make their day”

Here are some things that will help you out:
1. Be sure to read all the fine print in the auction booklet.
2. Go online to view the properties.
3. Get the online disclosures. (The one for the property we purchased was not accurate)
4. Go to the open house scheduled by the auction company if you can.
5. Don’t forget to get a copy of the contract on line (if available) so you can review what you are signing.

A few weeks after the auction my client and I bought a nearly identical home in the same tract for $367,000. This house was roughly the same size and in better condition and cost $21,500 less than we paid at auction. It was a bank foreclosure.

Bottom Line….. I won’t go to any more auctions. If you want a great deal my advice is to buy foreclosed properties directly from the bank. Forget the middleman…. Auctions
....and by-the-way..... get yourself a good expreienced Realtor. It won't cost you anything and "experience counts"

NEXT ISSUE: What are the Differences Between a Bank Foreclosure and a Short Sale?

Silicon Valley Real Estate...At your Service

I have decided to start a Blog.

Why? Because there is so much I have learned in my very long career as a real estate professional. I would like to make myself available to the vast majority of readers out there that don't really understand the finer points of real estate. There are also a lot of misinformed buyers and sellers that have been caught in a quagmire of sorts. I hope that these people will contact me with their real estate problems so I can help them find the right answers.

So welcome to my Blog about the Real Estate Industry.

My name is Joy Engstrom and I started my real estate career in 1979. Before that I worked for the Alum Rock School District in San Jose California. Specifically, I worked with Educationally Challenged Youth. Generally children at least two years behind grade level with higher than average IQ's. Eventually I decided to try something different and studied for the Real Estate Brokers Exam. After trying a few different real estate offices I landed at Century 21 and continued working for Ed Zimbrick...my favorite boss..for nearly 20 years. I finally decided that what I really needed was my own business so opened my own Realty World Office.

It's been great! I love the freedom I have and enjoy making my own business decisions I have a great relationship with my clients and work very hard for them. I have a hands-on sort of mentallity and so I love to shoot my own photos & design my own ads as well working personally to find that special property for my clients.

I've had to become more technical. I've learned Photoshop, Microsoft Office, Excel, QuickBooks, MGI Photosuite, and a multitude of other programs necessary for real estate.

I manage my websites and a huge data base of clients. In short...I love my work!

I hope that you will feel free to contact me with your questions and comments and if you have any suggestions on topics that you would like to hear more about just click comments below and post them here or contact me.

Next Blog will be on:
REAL ESTATE AUCTIONS "What You Need to Know"

Thanks so much for joining me,

Joy Engstrom