Tina Schmitt

The current predictions, January 2 2012, indicate this will continue to be a buyer’s market until at least 2014. It seems to be pushed back every year since 2006.

This is not exactly uplifting news for anyone who wants to sell or for those of us in the business of getting the highest value for a client’s home or the lowest price possible for the buyer’s agent.

Home owners still believe their home is special and stands out from everyone else’s homes for various reasons.

Home owners want to explain all the things they did to their home like new carpet, paint, rebuilding a rickety deck or you name it.

If the foot print does not change the value isn’t going to be increased substantially enough to bring up the sales price more than a couple of thousand dollars at the most. The seller will never get back what they put into cosmetic improvements in a home unless the home was a disaster when they bought it.

A buyer may like the home a bit better but the problem is they would rather purchase what they consider to be a “fixer” so they can build some equity themselves. The goal is to increase the value to more than they paid for the home.

More than half the time they don’t’ get it either.

The fact is homes are competing with short sales and foreclosures. Foreclosures are dropping their price monthly until the home sells. Short sale owners are taking whatever the buyer offers just to keep it from being foreclosed on. When a short sale buyer makes an offer on a home and it is submitted to the bank and the foreclosure process is delayed until negotiations have completed between buyer and the bank. Unfortunately buyers think just because a home is priced so low and the seller accepts the offer they have a contract. They do not because everything is contingent upon acceptance by the bank and that is clearly stated in the Short Sale Addendum and the listing remarks.

Most banks do not want to take less than 10% of the current market value in a short sale situation. This is why they get a Broker’s Price Opinion or BPO, and then an appraisal. Rarely does an offer come in at that amount and when the bank counters the buyer’s offer at more than the listed price it is a shock to the buyer.

Homes under short sale conditions will also lower the price until an offer comes in on the home. It means nothing to the bank. When it is all said and done the agent representing the seller will at least know what the bank will now take for the home. Then they can change their listing to say they now have an approved listed price. It tells agents and buyers that this particular listed price is what the bank will accept so it needs to get an offer at that amount and no less.

We often say it is the second offer that will be accepted on a short sale.

All this information is to let the property owner, who wants to sell their home in this market, needs to compete with listed prices under market value. Those listings are the ones getting the most attention. If their property is very inexpensive this applies even more so as the bulk of short sales and foreclosures are for homes under $250K.

If a seller is not prepared to compete with the current sales in their area then they are wasting their time and the buyer’s time and all of the agent’s time. Harsh? Not really.

It is just the reality of the market.

Should you want to list your home for sale be prepared to continue reducing the price until it becomes attractive enough to a buyer that they want to at least write an offer. If the home is listed and not being shown, or called on by potential buyers, that is the biggest indicator that it is priced too high.

The only reason a home does not sell is the price. It has always been this way regardless of the market.

This restaurant is also an icon for Big Bear dining. Established in 1947 you might think some of the waitresses have been there nearly as long. I personally know of 2 that have been there for almost 30 years. The food is considered exceptional and fair in pricing. The salad bar contains a good variety but I will say if you are vegitarian the pasta leaves a bit to be desired. The majority of visitors love the experience. The ambience is warm and somewhat dark giving a nice romantic atmosphere to your visit. Many locals attend for happy hour.

In the Big Bear City Airport is a small restaurant the serves some of the best appetizers and food in the mountains. With a larger group of people  showing up at odd times the waitress was very cooperative and all the staff chipped in to help with extra chairs and service. Their selection is excellent and varied enough to satisfy everyone, Lots of light filled the room with the big windows on the air port runway side. It is usually pretty crowded so go early.

I know most people would never think of Chads as a restaurant and basically that is not their main business but when you decide to grab a quick bite to eat they have some of the best burgers and don’t mind if you ask for it your way. You can choose to sit at the round tables next to the dance floor in front of one of the big screen TV or on the lounge couches near another flat screen TV. But for more privacy there is a row of booths on the far end of the restaurant/bar where you can not only enjoy your meal but choose to play some pool while you wait or afterwards. The problem is there aren’t many good pool ques and the tables could use some leveling and new felt but for a lark and no serious games it is okay. Lets hope the owners show a little more pride and start to fix up the place as it is a central part of Big Bear entertainment with bands on the weekends and a dance floor that is usually full. There is also foosball and darts for a variety of fun things to do while you are there.

Sales in Big Bear are down for 2011 so far. Last year was down from the previous year and it is down further this year so far. We first thought it would be going up when a wave of buyers came into the valley and started opening escrows but statistics show we are down close to 10% over the past 2 years of sales up to the end of May. Buyers are scarce and usually buying in the lower end of the market and often with cash. This tells me that people have money but are hanging onto it for dear life. Fear is probably one of the most powerful motivators there is. Insecurity about tomorrow will turn a normally generous person into a financial hoarder. Sadly this can result in so many missed opportunities of sharing with one’s family and friends. Enjoying life to it’s fullest is put on hold but how much time do all of us have anyway. Those who can afford to buy generally can rebuild their stores in short order when they let go of some of them. And most of all, in my opinion, sharing moments and building happy times with those you love are worth far more than the satisfaction any savings can give to you. Big Bear is a place where happy memories are made that cannot be replaced by money.

As much as I don’t like having to deal with short sales due to the time and lack of money involved, it is still upon our market like a runaway train.I understand I’m supposed to have the attitude this is just another opportunity to handle what is before us and besides we have no choice in the matter.Well, I guess we can refuse to handle short sales but then we are cutting off our noses to spite our faces aren’t we.I just finished up the CDPE course. I am now among the elite group of Certified Distressed Property Experts. Another designation is hanging on my wall. I have added it to the Certified Residential Specialist, CRS, the At Home With Diversity, AHWD designation, the ABR Accredited Buyer Representative, SRES, Senior Real Estate Specialist, e-Pro, Technological wizard in real estate, and RSPS, Resort and Second Home Property Specialist. The Luxury Home Market Specialist is a course I also took but you can’t get the actual designation unless you have sold several very high end homes within a specific time frame and I haven’t. These past few years the market values have dropped not gone up but it was a very interesting class none the less. Many years ago Interact came along and that one class did more that many other classes could have as it worked on one’s approach and personality flaws instead of trying to manipulate people. Besides, psychology is the bomb especially when it is turned on one self.With less business I found it a great time in the past 6 years to update and upgrade my education. Each program has taught me something. Some far more than others I assure you.Something has to be said about each of the designations and certifications offered to the Real Estate community. Each one of them is meant to make you a better agent. Sure they want to increase your business but the way to do that is with better service, bottom line.The classes fine tune what you need to be doing “for” your clients. They hone skills in making sure an agent keeps their clients out of court, are represented in the best way possible and have the most advanced knowledge and techniques offered to them.This last class is meant to help property owners fend off foreclosure. Foreclosure will harm a property owners ability to recover their credit and purchase another home for years to come. Short sales will enable them to get back into a home in a few short years. That can mean something to someone who was sucked into the buy now and pay for it later effects in the explosion of property values market. It will give them the ability to purchase again while prices are still at a rock bottom and are far more affordable to make the payments. It also helps to salvage their feelings about themselves. Agents are taught to fight for the borrower to remove the debt from them forever and not have the banks come after them when it is over. That doesn’t always work for everyone but we still are supposed to fight for it and can succeed.Make sure your agent is educated and not just out to make a buck for themselves but to represent you as though it were their own lives they are handling.Make sure you ask your agent if they are educated in short sales. Sometimes just handling them is not education enough. Find out quickly if they have a system for getting your short sale presented and finalized quickly. If it is handled right the short sale negotiator should be assigned within 30 days

It seems the information coming out that more foreclosures are forecast to infiltrate our market these days has once again slowed down the influx of buyers much to the detriment of the real estate market nationwide.With all the talk about the way to make our nation gain economic ground would be for the housing market to show signs of recovery, one might agree that telling the whole truth may help facilitate that recovery. The fact is a great deal of foreclosures, in the Big Bear area, are the lower end homes.People, who purchased the most inexpensive homes in the valley only because that is what they could afford, are going to be more affected by a down market and a down rental market.As soon as they have any financial problem the first thing they want to do is get rid of the nonessentials in their lives. If they cannot sell their second home because they owe more than it is worth then they have another one or perhaps two choices. They can let the home be foreclosed on if the mortgage is a purchase money mortgage instead of a second mortgage or a refinanced mortgage and let their credit go for years to come. The second choice is to short sale the home, if they are in genuine financial straits and there is absolutely no way for them to either pay off the mortgage or make the payments. Then their credit is ruined but for a little less time.The banks don’t want people to do either of this because then the borrower’s borrowing power is hurt and they can’t make all that money on the credit card debt people manage to rack up. The banks also don’t want the borrowers to have loan modifications because Fannie Mae insured the home will be paid in full if the borrower defaults so there is no motivation for the banks to allow a loan modification or short sale. Since the banks allowed the borrowers to get into this kind of trouble the government has told them now they have to be more cooperative with short sales or they will get into some kind of hot water with the government.Okay, I’ve spouted off about the big bucks getting bailed out and those who don’t have it not being bailed out, such as the general population.So now we have this “shadow” inventory of prospective foreclosures.As far as I am concerned they should just go ahead and put them all out there at once and allow the people to buy them up so our normal market can start to recover. But that is just me. If they do that then they compete against themselves. Keeping them dribbling in will stop the values from falling even lower.It is going to take a good 8 years for the market to get back to the higher end with a measly 3% increase in values a year like it used to be.So we have all these cheap homes now getting multiple offers on them right and left. What is that doing to the market? It is making the lower end homes more desirable. What happens when something is a premium? It goes up in value. Where are the middle of the road Big Bear homes? They are pretty flat line right now. Most of those homes are not in trouble. At least the owners of those homes seem to be holding their own. The high end homes? They are in the least amount of trouble. It is quite rare, in Big Bear, for a really high end home to be foreclosed on or need to be sold as a short sale.They are still able to come down in price but the owners just don’t have to sell them so they won’t. Those homes sit there until some other high end buyer says okay that looks good and I have lots of money to burn so I’ll take it. They don’t care. Almost every buyer I talk to these days tells me the market is soft. Sellers are in trouble so they will come down more than their list price. They tell me they have the upper hand in any negotiations. The truth is in Big Bear owners of these second homes purchased them as toys. They didn’t need them. We have rare sellers who are taking a loss just to get the home off their books so they can buy something more expensive in an extremely high end area such as the beach. They are paying the difference in their mortgage losses so they can spend more money.I have high end buyers who think we have a ton of foreclosures available in their range. They are wrong. We hardly have any. For every seller who just wants to move on from a high end home there are 50 buyers who think our high end homes are in trouble. They are not. So where is the Big Bear market going? Cheap homes are getting snatched up. Middle homes have some negotiating room. High end homes will sell for what the seller is in the “mood” to sell them for. All this is going on while the banks are starting the bouncing ball effect of their interest rates.They are edging upwards. If you don’t buy that home now, you will possibly be paying the banks interest instead of paying down your mortgage balance. We all want to give the banks more money don’t we.

Driving in Snow ConditionsWe are still anticipating what may be pretty heavy snow fall before our winter is over sometime in May. The usual cut off is Mother’s Day.It is still possible for us to be large amounts all at once as snowfall has surprised us more than once in this dryer and often warmer winter of 2010 and 2011.With that kind of snow fall still possible driving on a weekend the roads may be difficult to navigate. There will likely be innumerable vehicles on the highways coming up from Friday until Sunday during the day and at night when snow is in the forecast.The Highways 18, via Arrowhead to Running Springs and up and Highway 38 from Redlands are going to be “packed”. The drive may be far more slow than anyone might anticipate. This past weekend it took up to 7 hours to come up to Big Bear from the bottom of the mountain.The alternate route is Highway 18 down the back through Lucerne. It may be the lightest traveled and it is the shortest amount of driving on actual mountain roads.The only problem with it may be from larger vehicles trying to come up. They have been known to get stuck because it is pretty steep and has tight switch backs. Ocasionally someone gets caught sideways in a motor home or bus when there is a lot of snow but you are looking at that possibility with any of the roads coming up during a storm.With 330 closed it increases congestion on the other routes. In my opinion, you will have to have chains on your car and at the least in the car as Highway Patrol will be stopping each vehicle to check coming up. My suggestion is to put chains on early before you are stopped and have to pull over to put them on while it is snowing outside.I don’t know if the snow will be light or heavy but the warmer it is the heavier it is.If it were me during times of heavy snow predicted I would take route 18 through the desert. The voice of experience is talking to you.When you decide to leave the same route is likely to be the best bet.If either 38 or 18 closes on the front side of the mountain due to accidents or rock slides you could be stuck having to go back or just end up stuck and waiting for whatever is causing the blockage to be moved or to move itself for a while.I always expect one or both of the main roads to have that potential in heavy snow conditionsYou want to be completely prepared, bring blankets and warm clothing and food in your car. Energy food, non-perishables and water. Bring a shovel and a bag of kitty litter in the back. Bring a sheet of Plastic to put on the ground if there was any reason for you to need to lay on the ground to take off a wrapped chain or dig out of a spot. The kitty litter will give you traction if necessary. You don’t need a ton of it but the front and rear of the tires need to be cleared of snow. Bring snow boots and a change of clothing from the skin out. More than one pair of gloves and head coverings.Drive no more than 20 to 25 miles an hour with conditions are bad. Don’t worry about the idiot behind you trying to get you to speed up.Don’t pull over unless you can easily see you can get back on the road again. Do not tail gate. Make enough room for yourself and the guy behind you to stop. If you start to slide put on your breaks gently and hold them steadily until they are on the floor if you have to. You should be able to stop. That is never a guarantee so drive slow. Sometimes ice conditions will prevent you from being able to stop regardless of what you do or don’t do.When you stop behind someone make sure there is a car length or two between you just to try and prevent the guy behind you from pushing you into the car in front of you. These are just in case that driver isn’t paying attention or if the driver behind him isn’t paying attention.If your wiper blades get clogged up snapping them on the windshield should loosen the crud and make them wipe clear again. I do it while I’m driving but I don’t recommend it to others. Don’t feel hurried or pressured by others. Take your time. Drive safely.

The best answer is when you are ready. Big Bear Valley is a whole different ball game when it comes to why someone buys a home. 99% of my buyers are second home buyers or investors. Very few are permanent home buyers. Everyone wants to see foreclosure lists when they speak with me for the first time. That tells me they are looking for a really off the charts cheap buy and they expect it to be a wonderful home far under valued than other homes in the same neighborhood. They want a bargain. Okay, I get that and totally understand that hope. The problem with Big Bear market is about 5% of our homes are foreclosures. So at any given time only a handful of homes within a specific price range are the cheapest of the cheap compared to the rest of them. Most of our foreclosures are under $200,000.00. Why? Because when a person borrows money by the skin of their teeth they are generally the first to find difficulty in paying for that home when it is crunch time. Most of our really low end buyers are buying that cheap because that is all they can afford. Nothing wrong with that at all. The larger homes are usually purchased by people who can afford more than what they are paying for the home and are making quite a bit of money in the first place. When it is crunch time they don’t have to sell. They just make a few adjustments in their payment scheduling and keep on keeping on. Say buying a new car every other year instead of every year, fewer out of the country trips, less high end jewelry and things like that. Short sales are out numbering the foreclosures in Big Bear now. One still gets a large discount for the home they are buying but the wait can be excruciating. I have had the most hearty of buyers tell me they don’t mind waiting since they are not in a hurry but when 6 months roll by and they still don’t have an answer they start to question what they are doing, if it is the right house for them, should they move on because they had hoped to be in the home already, when they first started looking. Working with the banks is pretty much the same be it a short sale or a foreclosure. They will do nothing. Problems with the home? Be prepared to pay for anything and everything that is found. The banks don’t care. Waiting for that long only to find out the home has more problems than you want to or are possibly able to absorb can be very discouraging. Right now interest rates are amazing, the inventory is up so there are lots of homes to choose from. All you need is good credit, a 20 % down payment and you are in. Sometimes better loans come available but they generally run out of money quickly for those government sponsored deals such as USDA loans for 100% financing and those are only for primary residences. If you believe you are in the market you may be caught up in the stampede for what is left over when interest rates start to creep up again. Anyone who is waiting for the bottom will suddenly realize they may have missed it.