Monthly Archives: September 2011

Joyce’s Voice…Pumpkin Patches in Snohomish, King and Pierce County

Pumpkin Patches great fun in Fall

SNOHOMISH COUNTY

Baylor Farm: 360.793.0822

28511 Ben Howard Rd, Monroe

Bob’s Corn: 360.668.8630

10917 Elliott Rd, Snohomish

Carleton Farm: 425.334.2297

Sunnyside Blvd SE, Everett

Craven Farm: 360.568.2601

13817 Short School Rd, Snohomish

Foster’s Pumpkin Farm: 360.435.5095

5818 State Route 530 NE, Arlington

Hands-on Pumpkin Farm: 425.743.3694

15308 52nd
Ave W, Edmonds

KING
COUNTY

Fall City Farms: 425.222.4553

3636 Neal Rd, Fall City

Mosby Brothers Farm: 253.939.7666

12754 SE Green Valley Rd, Auburn

Remlinger Farms: 425.333.4135

32610 NE 32nd St, Carnation

Serena Farms: 253.261.8789

22431 84th Ave S, Kent

Serres Farm: 425.868.3017

20306 NE 50th St, Redmond

The South 47 Farm: 425.869.9777

15410 124th St, Redmond

Two Brothers Pumpkin Patch:

71103 310th Ave NE, Carnation

PIERCE
COUNTY

Maris Farm: 253.862.2848

24713 Sumner-Buckley Hwy, Buckley

Scholz Farm: 253.848.7604

12920 State Route 162 E, Orting

Spooner Farms: 253.840.2059

9710 State Route 162 E, Puyallup

Take Root Farm: 253.891.FARM

24416 Buckley-Tapps Hwy E, Buckley

Terry’s Berries: 253.922.1604

4520 River Rd, Tacoma

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Joyce’s Voice…Sellers Who Bought Post-Bubble More Likely to Over-Price Home

Imagine two identical houses built in the same year in the same neighborhood.  House A was last purchased in 2006 and House B in 2008.  House A is listed at its estimated fair market value of $300,000.  Although it would be logical to assume that House B would list with a similar asking price, new research shows that it would, in fact, list at $350,000 on average, a $50k premium!  Why the 16 percent price difference?

An analysis of seller behavior reveals that homeowners who bought after the peak of the national market in June 2006 dramatically over-price their homes relative to its estimated market value.  In a separate survey fielded by, 17 percent of sellers who purchased post-bubble claim that their primary factor in pricing their house is their original purchase price.  This compares with 9 percent who bought during the run-up to the bubble and 4 percent who bought before that.

In the chart below, the blue line is showing the difference between the current list price and the estimated market value of the home with the year the house was last sold running along the X axis.  The green line represents the difference between the current list price and the prior purchase price.  Notice in the green line that current sellers that purchased their home since 2009 have been pricing their house at 10% higher than what they purchased it for just 1-2 years ago.  This is in spite of the fact that over the last two years the national real estate market has depreciated by 10 percent.  This difference is represented in the blue line which shows that sellers who bought during this period are pricing around 20% above market rate. Not only are these sellers ignoring the losses they have taken since purchase, but they’re trying to claw back all of their closing costs too it seems!

Obviously the idea that your largest asset has been devalued significantly is difficult to accept, however, people who bought in the run-up to the bubble are seemingly more willing to confront this reality than those who purchased after the peak.  In fact, relative to sellers who purchased their home before 2002, those who bought while the bubble was expanding rapidly are comparatively underpriced.  When first placed on the market, the typical house is priced at roughly 10 percent above its estimated market value, but sellers from 2006 touch as low as 6.4 percent.  Looking at sellers who bought on either side of the market peak nationally reveals stark differences between these two groups.  Sellers who bought in January 2006 overprice their home by only 8 percent, while those who bought in January 2009 overprice by 22 percent.

Sellers who bought post-bubble seem to think that since their home purchase occurred after the peak of the market, and thus home values were already significantly discounted relative to the peak, the seller escaped the worst of the bubble.  The problem is that “The Bubble” didn’t pop so much as steadily deflate for the better part of 5 years now, and current home values now represent what they were worth in 2003.  Said differently, assuming your market followed the national trend, unless you bought your house before 2003, you should be selling it at a loss now.  The closer to 2006-2007 you bought, the bigger that loss should be.

We know there are a million numbers to keep in your head when looking at a potential property, and that by no means does every property purchased in 2008-2010 is dramatically overpriced.  However, I humbly suggest that when looking at properties, you keep one more very important, and very simple, statistic in mind: Previous Year of Purchase.

Steve Brownell

Joyce’s Voice…Freddie, Realtors Look to Stop Short-Sale Fraud

Freddie Mac‘s fraud investigation unit is reaching out to Realtor
associations and real estate agents to educate them about how to prevent
fraudulent short-sale activities from taking place.

In 2010, short sales accounted for 14% of completed workouts, a stark
increase from the 4% accomplished in 2000 for the government-sponsored
enterprise. Through June 2011, Freddie Mac said the volume of short sales they
have processed is up 31% over the same time period last year, increasing the
probability for fraud to occur.

Shelley Poland, vice president of single-family mortgage credit risk
management at Freddie Mac, and Robert Hagberg, associate director of fraud
investigations at Freddie Mac, wrote a blog where they said that short-sale
fraud is on the rise because Realtors fail to disclose all of the parties who
are involved in a transaction. The executives said the Realtors “rig sales at a
low price” and keep higher offers off the table from the GSE and the distressed
seller and then flip the house after it is sold to a fraudster for a better
price than what it was originally given away for, thereby earning a
profit.

“By concealing the higher offer, short-sale fraud worsens losses to home
sellers, Freddie Mac and taxpayers,” the Freddie Mac employees said. “It also
throws another wrench into the housing recovery by undermining the trust and
transparency at the core of any real estate transaction.”

Tim Grace, senior vice president at CoreLogic, said it is common for a
limited liability company to negotiate a short sale with the bank and have a
buyer ready to purchase the same property simultaneously to this closing for
approximately 30% more than the rate agreed upon by both the seller and the
bank.

CoreLogic, Santa Ana, Calif., estimates short-sale fraud will rise by 25%
this year. According to CoreLogic’s 2011 short-sale research study, unnecessary
losses related to risky short sales are approximately $375 million
annually.

Freddie Mac’s fraud investigation unit has made stopping short-sale fraud its
top priority. The GSE said it has identified and stopped several fraudulent
deals from closing by working with real estate professionals and law enforcement
agencies. There are several trends and red flags that the GSE is telling
Realtors to be aware of to stop short-sale fraud from occurring.

The first involves Realtors falsely indicating on a short-sale listing that
there is an offer on a property in order to discourage legitimate offers and
protect an accomplice’s planned low bid.

Another common trend fraudsters are using is reverse staging—manipulating the
short-sale listing price by making the house look more distressed than it really
is. This also includes inflating repair estimates for the property and using
similar tactics to obtain a low home value on a broker price
opinion.

A third trend Realtors should be aware of is the “flipping” scheme where a
fraudster buys a house at a short sale without using their own money. This
individual then sells the house either the same day or a few days later to a
second buyer for a higher price. During this scheme, the fraudster uses false
loan documents in order for a lender to approve the buyer’s
mortgage.

Lastly, some fraudsters are manipulating the HUD-1 settlement statement where
they itemize all fees and charges from the home sale so they can make proceeds
for themselves without the seller’s knowledge.

Firms and individuals who have been caught by the fraud investigation unit
are placed on the GSEs exclusionary list barring them from conducting business
with Freddie Mac. Because of the recent uptick in short sales taking place
nationwide, Freddie Mac now requires all parties involved in a transaction to
sign an affidavit confirming their agreement in case there are any legal
problems.

“We strongly believe responsible Realtors are America’s natural first line of
defense against such scams,” the executives said. “There are many conscientious
real estate professionals who want to do the right thing. We often receive calls
in our servicing, quality control, fraud investigation, outreach and HomeSteps
divisions from real estate agents who know they’ve seen something inappropriate
and won’t look the other way. They understand that real estate fraud turns a
shortsighted profit at the cost of the public’s long-term confidence in
homeownership and the housing industry.”

By Evan Nemeroff