Ok, for all of you who have taken the plunge into purchasing a house here in Los Angeles...congratulations! I'm sure you most likely were in a multiple offer situation or were surprised at how close you were in paying the asking price (and yes, I am writing this in September of '08). I know your counter parts in Indiana, or Colorado or Florida, or 40+ other states may think, you paid what for your house?...or simply, that you may be one taco short of a combination plate. You and I know differently...you have taken advantage of a real estate market comprised of many different industries where there is high demand for a short supply of land and housing. I truly don't think the price will go lower than what it is now in specific areas of Los Angeles.
I think as a buyer about to enter the market, it's good to read this blog and others, and to speak with different people who live in the area you are looking to purchase to get more specific feedback on how that market it really doing. I think you would be surprised at how Micro markets, i.e., West LA, Santa Monica, Brentwood, Mar Vista, Cuver City, The South Bay, even Studio City, and Burbank are doing. The key is to get real with what the prices are and most importantly what homes are selling for and it will either work for you or not. If you're ready to purchase you take the information in and move forward. You know that in the next 3-5 years you will most likely be in a great financial housing position (not to mention a tax shelter from day 1). If you're not ready to buy, you will usually complain about how the market is going to plunge in the next year to eighteen months, or you unrealistically discount every property by 30%.
Here's the deal...You won't be alone in finding that great house that fits your criteria, so act early! If you like a house, don't play games, listen to your professional real estate advisors and move forward. If you can't do that, 1) You will lose leverage in getting a little lower price. I would gage anywhere from $10,000-$75,000 or you will lose the house to another buyer.
Also, GET PRE-APPROVED WITH A LENDER BEFORE YOU START LOOKING FOR A HOUSE. Again, GET PRE-APPROVED WITH A LENDER BEFORE YOU START LOOKING FOR A HOUSE! I don't care how great your credit is, how much income you bring in, or how you've crunched the numbers on how much you can afford for a home, if you need a loan on a home, get pre-approved! There are so many factors these days, with credit restrictions and guidelines, you don't want to get caught with just missing a loan (which means house) by "that much"...
Good luck!
Tuesday, September 16, 2008
Saturday, June 28, 2008
WHAT EXACTLY DOES "SHORT SALE" MEAN???
It means just the opposite...it means the sale of that property will be long. Very, very, very long. It means, you may purchase the listed "Short Sale" property in 7 months to a year and it will more than likely go into foreclosure before you get it as a short sale. It means, if a bank looks at the offer you put in, they may or may not get back to you. The list price is usually soooo much lower than what the bank would even consider accepting, but it's so convincing for a buyer looking for that "great deal". I think you catch where I'm going here.
*Real definition-* A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. A short sale is the sale of real property where the fair market sales price is less than the loan balance.
UNLESS A SELLER FITS THE 3 D's, the chances of a property selling at a negotiated price/a short sale price, here in Los Angeles, is 25% if you're lucky!
The 3 D's a seller probably needs in order for a shot sale to be accepted...
1. Dead
2. Divorced
3. Destitute (and I mean no money, no 401K's, no inheritance, no other properties, no money in the bank...bankruptcy may make the destitute claim easier.)
Because so many people used their home's equity essentially as an ATM card when the market was amazing, these people are now finding themselves with a lot of "stuff" and a whole lot of debt. They can't afford to keep up with the payments, so they need to sell their home. To do this, they need to negotiate a sales price with the bank, because the value of their home is now less than the loan amount. Now a short sale process is formed. Because many homeowners in these situations have more than 1 loan against the property, the seller is usually negotiating with the 2nd mortgage company to see what type of payoff the lender will accept.
If a seller owes $200,000 on their 2nd loan and $1,300,000 when you combine the amount of the 1st and 2nd loans on a property, and the value today is $1,100,000 someone has to take that $200,000 dollar loss. During a short sale, the negotiations are for the bank to take that $200,000 loss. The seller can prove the market value has decreased by presenting offers from buyers on their property.
The more offers a seller receives and gives to the bank, the seller feels proves the point to the bank "this" is the real value today. This tactic of presenting real offers to the bank for far less than what's owed on the property is the buyer's short sale process. Buyers then submit their offers, albeit they have an unfair advantage because they feel the list price is what they have a chance of getting it for (and it's not) which the seller turns into the bank showing value hoping for a reduced payoff (considering if the property went into foreclosure the second loan carrier most likely wouldn't see that $200,000 any way) BUT...UNLESS the seller fits the above 3 D's good luck on that short sale!
*Note: The way to get the property as a buyer and avoid the short sale processes...ask the agent how much the seller owes on the property including everything and see if that's a price you're comfortable paying...
*Real definition-* A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. A short sale is the sale of real property where the fair market sales price is less than the loan balance.
UNLESS A SELLER FITS THE 3 D's, the chances of a property selling at a negotiated price/a short sale price, here in Los Angeles, is 25% if you're lucky!
The 3 D's a seller probably needs in order for a shot sale to be accepted...
1. Dead
2. Divorced
3. Destitute (and I mean no money, no 401K's, no inheritance, no other properties, no money in the bank...bankruptcy may make the destitute claim easier.)
Because so many people used their home's equity essentially as an ATM card when the market was amazing, these people are now finding themselves with a lot of "stuff" and a whole lot of debt. They can't afford to keep up with the payments, so they need to sell their home. To do this, they need to negotiate a sales price with the bank, because the value of their home is now less than the loan amount. Now a short sale process is formed. Because many homeowners in these situations have more than 1 loan against the property, the seller is usually negotiating with the 2nd mortgage company to see what type of payoff the lender will accept.
If a seller owes $200,000 on their 2nd loan and $1,300,000 when you combine the amount of the 1st and 2nd loans on a property, and the value today is $1,100,000 someone has to take that $200,000 dollar loss. During a short sale, the negotiations are for the bank to take that $200,000 loss. The seller can prove the market value has decreased by presenting offers from buyers on their property.
The more offers a seller receives and gives to the bank, the seller feels proves the point to the bank "this" is the real value today. This tactic of presenting real offers to the bank for far less than what's owed on the property is the buyer's short sale process. Buyers then submit their offers, albeit they have an unfair advantage because they feel the list price is what they have a chance of getting it for (and it's not) which the seller turns into the bank showing value hoping for a reduced payoff (considering if the property went into foreclosure the second loan carrier most likely wouldn't see that $200,000 any way) BUT...UNLESS the seller fits the above 3 D's good luck on that short sale!
*Note: The way to get the property as a buyer and avoid the short sale processes...ask the agent how much the seller owes on the property including everything and see if that's a price you're comfortable paying...
Monday, March 17, 2008
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!
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
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
Thursday, February 28, 2008
Who's into the numbers?
Santa Monica (all zip codes) statistics pulled from the MLS, not from the anchor desks of Channel 4 News...sorry Paul Moyer.
Tip...If your house isn't selling in the specified average days on market, you may want to consider reducing the list price.
Look for February's Statistics Monday!
Santa Monica HOMES Jan. 2008
Avg. Sales Price versus List price: 96.0%
Average List Price: $2,769,333
Average Selling Price: $2,658,477
Avg. Days on Market: 73
Santa Monica HOMES Jan. 2007:
Avg. Sales Price versus List price: 96.5%
Average List Price: $2,085,428
Average Selling Price: $2,011,933
Days on Market: 21
Santa Monica CONDOS Jan. 2008:
Avg. Sales Price versus List Price: 93.3%
Average List Price: $1,022,590
Average Selling Price: $954,222
Avg. Days on Market: 54
Santa Monica CONDOS Jan. 2007:
Avg. Sales Price/Avg. List Price: 95.2%
Average List Price: $920,220
Average Selling Price: $875,779
Days on Market: 62
While I was not an assistant to Alan Greenspan nor did I apply for the position with the current Federal Reserve Chairman, Ben Bernanke, I feel Santa Monica’s real estate market is holding value.
Tip...If your house isn't selling in the specified average days on market, you may want to consider reducing the list price.
Look for February's Statistics Monday!
Santa Monica HOMES Jan. 2008
Avg. Sales Price versus List price: 96.0%
Average List Price: $2,769,333
Average Selling Price: $2,658,477
Avg. Days on Market: 73
Santa Monica HOMES Jan. 2007:
Avg. Sales Price versus List price: 96.5%
Average List Price: $2,085,428
Average Selling Price: $2,011,933
Days on Market: 21
Santa Monica CONDOS Jan. 2008:
Avg. Sales Price versus List Price: 93.3%
Average List Price: $1,022,590
Average Selling Price: $954,222
Avg. Days on Market: 54
Santa Monica CONDOS Jan. 2007:
Avg. Sales Price/Avg. List Price: 95.2%
Average List Price: $920,220
Average Selling Price: $875,779
Days on Market: 62
While I was not an assistant to Alan Greenspan nor did I apply for the position with the current Federal Reserve Chairman, Ben Bernanke, I feel Santa Monica’s real estate market is holding value.
How YOU Doin'?
Welcome to the world of Blogland for Santa Monica!
I hope to have this site as a reference point for Santa Monica residents who want to hear how the housing market is truly doing. It's a great platform to get feedback from an expert...me (a realtor specializing in Santa Monica and the West Side) in conjunction with statistics, as well as real buyer and seller feedback out there.
It can become a bit discouraging for buyers and sellers when all news points to Doom's Day in Real Estate. Sellers are worried about their values and buyers believe a list price is at least $100,000 overpriced. But the doomsday news does not reflect what's going on in Santa Monica. If you're waiting for property values to drop in Santa Monica, I suggest you look elsewhere.
Plus, with the new Stimulus Package moving forward with a target date of April 1st and ending December 31st, 2008...The Buyers are a comin'! Any of you sideliners out there...take your last sips of Gatorade and suit up, it's time to play!
Don't hold back your questions, and I won't hold back my answers. At the end of the day, when the timing and financing is there, it all magically happens.
I hope to have this site as a reference point for Santa Monica residents who want to hear how the housing market is truly doing. It's a great platform to get feedback from an expert...me (a realtor specializing in Santa Monica and the West Side) in conjunction with statistics, as well as real buyer and seller feedback out there.
It can become a bit discouraging for buyers and sellers when all news points to Doom's Day in Real Estate. Sellers are worried about their values and buyers believe a list price is at least $100,000 overpriced. But the doomsday news does not reflect what's going on in Santa Monica. If you're waiting for property values to drop in Santa Monica, I suggest you look elsewhere.
Plus, with the new Stimulus Package moving forward with a target date of April 1st and ending December 31st, 2008...The Buyers are a comin'! Any of you sideliners out there...take your last sips of Gatorade and suit up, it's time to play!
Don't hold back your questions, and I won't hold back my answers. At the end of the day, when the timing and financing is there, it all magically happens.
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