Short Sales, Defaults, Foreclosures OH MY!

So, how many of you out there feel the "Real Deal" could perhaps be on a foreclosed property?
Carlton sheets made it sound tempting, heck, even Eric Estrada got into home infomercials for a second...but before you take the plunge into the abyss of foreclosures please make sure you have 4 things... 1. A High Risk Tolerance; 2. A LOT of cash; 3. Patience; and 4. Remodeling skills! Intrigued? Read on...

***If you would like to be notified when a property is up for auction, please email me with your contact and housing criteria information at naomk@cs.com!***

Here are some important ideas to keep in mind when going to purchase a foreclosed property in California...

1. You must pay all cash (in the form of a cashier's check), the day of the auction! There are some lending institutions that will lend on a foreclosed COURT not BANK foreclosure, but the borrower MUST be able to pay cash if the loan falls through, and must have financial proof the moment of auction. Remember there are NO contingency periods. If you get a loan and pull out of the deal you will lose your 10% deposit.

2. There is a starting bid price and if there are multiple bidders on a property, the property goes up in multiples of 1K, 5K, 10K, 25K, etc., of which each bidder on the property will have to show the auctioneer all of your monies so they know if you bid a certain price you have the money right then and there to pay for it.

3. You could have your heart set on a foreclosed property, be ready for the auction and 24 hours before, or at the auction, the borrower could cure his loan!

4. There is NO inspection period and NO contingency period. If you win the auction, you are purchasing the property subject to any other outstanding liens on the property. This could mean back property taxes of $70,000+, back Home Owner's Dues, liens for unpaid cars, etc.

5. Most of your hard hit areas in Los Angeles County are Palmdale and Compton (this is why the news runs with the stories "LA is headed for foreclosure disaster") it's actually VERY skewed neighborhoods driving the foreclosure stats up in LA proper...

Here are some important ideas/tips if you are the winning bidder on a property...

1. Once you win the bid, everything will get recorded anywhere from 3 weeks to 3 months.

2. Once you win the bid, there may be someone living in the unit so you will have to go through an eviction process.

3. If no one is living in the unit, beware of the inside of the unit. Remember people are being kicked/forced out of their homes, and if it got to the point of foreclosure it could be due to SEVERE denial. There could be quick set in all the pipes, toilets and sinks missing, drywall missing, floors ripped out, urine all over the house, kitchens ripped out...etc. That's why short sales are MUCH better...you have an inspection time, can get a loan and can get title insurance.

4. Remember you could get a surprise bill in the mail for backed property taxes or Home Owner's dues, and you are responsible to pay it!

5. You will want to make sure you are buying a foreclosed property on the first loan. Some foreclosure sales are for the second lien on a property. You may win that bid, but you have the possibility of the first lien foreclosing on YOU, even if you're now making payments on that first loan.

6. You will not get title insurance!!!

7. If you did get a foreclosed property and paid cash, within the first 6 months to a year you can refinance the home based on the purchase price YOU got the home for, not it's market value. From that purchase price you will most likely be able to take out about 75% (Lender guidelines vary). To get market value, you're looking at waiting about a year.

Hope this helps!

Santa Monica Numbers for February 2008!

As promised, here are the Santa Monica Condo and home sales for February 2008!

If you'd like to sign up for my monthly newsletter, please contact me at naomk@cs.com!

Santa Monica CONDO SALES Feb. 2008:
(All Santa Monica zip codes included)
***Again, if you have not sold your condo within the average days on market below, you may want to consider a price reduction***
Avg. Sales Price/Avg. List Price: 96.4%
Avg. Days on Market: 94
Sold Listings: 25

1. 2624 KANSAS AVE #14 $ 380,000

2. 1119 LINCOLN BLVD #3 $ 420,000

3. 924 5TH ST #4 $ 430,000

4. 1043 12TH ST #7 $ 433,000

5. 1440 23RD ST #209 $ 445,000

6. 832 EUCLID ST #206 $ 446,750

7. 1255 10TH ST #306 $ 450,000

8. 1659 FRANKLIN ST #3 $ 455,000

9. 853 12TH ST #C $ 491,000

10. 1524 10TH ST #E $ 530,000

11. 2312 6TH ST #2 $ 575,000

12. 2677 CENTINELA AVE #204 $ 615,000

13. 2677 CENTINELA AVE #204 $ 615,000

14. 2717 ARIZONA AVE #1 $ 630,000

15. 1217 24TH ST #A $ 665,000

16. 1238 12TH ST #3 $ 685,000

17. 1451 26TH ST #E $ 685,000

18. 2417 34TH ST #19 $ 698,000

19. 1239 9TH ST #2 $ 787,000

20. 1017 PEARL ST #E $ 795,000

21. 901 10TH ST #206 $ 820,000

22. 940 14TH ST #E $ 905,000

23. 222 7TH ST #201 $ 960,000

24. 1534 17TH ST #101 $ 1,040,000

25. 123 GEORGINA AVE #4 $ 1,350,000

Santa Monica HOME SALES Feb. 2008:
(Includes all zip codes in Santa Monica)
Avg. Sales Price versus List price: 100.8%
Avg. Days on Market: 47
Sold Listings: 10

1. 3118 17TH ST $ 1,067,000

2. 1307 MARINE ST $ 1,100,000

3. 3041 PAULA DR $ 1,170,000

4. 2643 31ST ST $ 1,300,000

5. 1336 SUNSET AVE $ 1,568,750

6. 2343 29TH ST $ 1,825,000

7. 704 15TH ST $ 2,100,000

8. 334 15TH ST $ 2,400,000

9. 1016 FRANKLIN ST $ 2,699,000

10. 806 ALISAL CT $ 3,800,000