Sunday, December 21st, 2008 at 7:48 AM
Vista REO Trail
I had two of these conversations yesterday, one with an agent, another with a seller, about showing their listed home for sale today:
JtR: Hello ma’am, I’m Jim Klinge, an agent who has buyers who would like to see your house tomorrow. Can we stop by in the afternoon?
Seller: What can you tell me about your buyers?
JtR: I’m sorry, I’m not sure I heard the question, can you repeat it?
Seller: Tell me about your buyers, have they talked to a bank? Are they well-qualified?
JtR: Yes ma’am, they are well qualified, can we come by?
Seller: Well, I don’t know, I have little kids and it’s Christmas – are they motivated?
JtR: Well, come to think of it, we’re casually looking, so if something changes I’ll call back. Thank you very much and happy holidays.
A big struggle in the marketplace is finding the motivated sellers – people who really need to move. I have found houses recently that have been great matches for my buyers, but the price is too high and the sellers and listing agents would rather wait longer for the lucky sale, rather than make a deal.
When I get resistance about just SHOWING the house, then I know that even if we like it, the chance of making a deal is remote. There are enough houses to show that I have to cut somewhere, and the sellers (and agents) who make it difficult to see the house eliminate themselves from my list.
At Klinge Realty, all lanes are open - show our listings anytime and make an offer! Here’s a new REO listing in Vista, a 2br/1.5 ba, 846sf penthouse going for $169,900:
I’ll add this story that happened this summer. An agent who had her own property listed a few doors down from my listing called about showing mine. I said no problem, it’s on lockbox. She said that she was going to be on vacation that weekend, and she wanted me to show her client my listing. I told her that I thought it would be a conflict of interest, because if I showed it to them, I’m going to talk them into paying full price for it. They never saw it, and she turned me into the board of realtors for failing to cooperate.
So there is one caveat. If you’re a realtor who is going on vacation, and you want me to show my listing to your client, I’ll do it – as long as you don’t mind that I talk them into paying full price for it. Fair enough?
Posted on Sunday, December 21st, 2008 at 7:48 AM in Foreclosures/REOs, REOs for sale | 18 Comments » | 
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Jim:
After watching your video on the 2/1.5 Vista reo, I was surprised to hear you saying that two low 160s cash offers were rejected.
To me, I think, giving the size and condition and being upstairs and all that in Vista, that it may rent for $1000 a month.
So, why are investors fighting over it at $160s?
Correct me where I am wrong.
Thanks,
George
Anonymous | December 21st, 2008 at 9:05 amThis is the EXACT same thing I’m seeing. Lot’s of sellers looking to sell. Few looking to go down on price. Hopefully the bailout money will run out soon and banks will be forced to start selling their “assets” at the market price.
shadash | December 21st, 2008 at 10:28 am“but the price is too high and the sellers and listing agents would rather wait longer for the lucky sale, rather than make a deal”
Do these same sellers and agents blame the “lousy market” for the fact they have not sold, or do they at least recognize they want too much money?
Smithers | December 21st, 2008 at 10:33 amUnrealistic greedy buyers trying to make me give my home away…
/sarcasm
No_Such_Reality | December 21st, 2008 at 11:19 amshadash,
That’s just evidence that sellers are still looking to play hardball whether the market is going up or down. You just have to find the motivated sellers as Jim said, or wait them out as I’m doing.
So far it’s worked wonders for me. Last year I could squeeze into a crappy condo in a good neighborhood or a good condo in a crappy neighborhood, but now I can squeeze into a good condo in a good neighborhood. Each year has made a world of difference.
A lot of the people selling, even if their finances were in order, would not buy their own home for the price they’re selling it at today. None of the people I know who are selling would. The only thing that made them buy was appreciation alone and the price was actually irrelevant.
A few buyers today are doing the hard work for you and I, by dealing with these people and buying comps for us. Let them.
BDiego | December 21st, 2008 at 11:29 amWhat leverage does a seller trying to sell in December have? Are they going to threaten to NOT pay their mortgage? (Like they’re already not doing.) Sellers are deadbeats living off whatever government handout they can get.
Soon reality is going to take hold and so are the laws of supply and demand.
shadash | December 21st, 2008 at 2:03 pmAs I will eventually be getting back in I can tell you my thinking behind the low offers. It isn’t that you can make the deal work at $1000 it is the worry that you can’t hold that $1000 in a deflationary spiral. There’s the secondary fear that with oversupply the next unit that sells will be lower thus stealing your tennants costing you both vacancy and forcing negative cash flow rents.
Rob Dawg | December 21st, 2008 at 2:43 pmI think that after several years of watching unsustainable price rises and owners, realtors and mortgage brokers gloating about how real estate never goes down, people who can afford to buy are just having too much fun looking at the mls listings and counting how many months properties are sitting on the market. After all, for investors looking at purchase price vs. potential income as a rental, nobody really *needs* to buy at all.
GeneK | December 21st, 2008 at 4:19 pm“Penthouse”
http://en.wikipedia.org/wiki/Penthouse_apartment
“A penthouse apartment or penthouse is an apartment or condominium that is on one of the highest floors of an apartment building or condominium. Penthouses are typically differentiated from other apartments by luxury features.”
ArmChair Appraiser price: $85K
ArmChair Appraiser | December 21st, 2008 at 6:22 pmPlease give the name of the realtor that was not concerned about CoI. I wish to avoid her. What did the board say?
Coconutz! | December 21st, 2008 at 6:58 pmCoconutz!
shadash,
In some cases it’s not about leverage. Sometimes a seller is selling at about the lowest price they have equity for (which may be overpriced to the market), and any lower they’d be better off taking the house off the market and foreclosing!
If New Sales Price < Original Sales Price – Original Down Payment – Principal Paid Off, you’re better off foreclosing and getting 12 months free rent. This is why the low down payments of the past are now causing foreclosures instead of people lowering their sales price. With recent tax changes on forgiven debt, foreclosure is a magic clause where being short $20K is exactly the same as being short $200K.
If you can’t motivate a buyer by giving him at least $20K in cash left over, why wouldn’t he take 12 months of free rent instead? Wouldn’t you?
BDiego | December 21st, 2008 at 7:08 pmBDiego – I think you mean seller, not buyer. You’ve hit the nail on the head, the sellers want something out of the deal now. If they aren’t going to bank the big dough, then they don’t cooperate.
I find it hard to understand why any of them bother to short sale? Overencumbered sellers – take the free rent and stop teasing me with the illusion that I can sell your house. You don’t want to move, you just want a payday.
Jim the Realtor | December 21st, 2008 at 9:55 pmPenthouses are typically differentiated from other apartments by luxury features
Do I get credit for the cobwebs at the end? You don’t see those in just any old condo….
And ArmChair, don’t mention to my Vista buyers that a similar 2/1 850sf condo but with no garage went on the market today for $130,000 – in Carlsbad.
Jim the Realtor | December 21st, 2008 at 9:57 pmI’ll add this story that happened this summer. An agent who had her own property listed a few doors down from my listing called about showing mine. I said no problem, it’s on lockbox. She said that she was going to be on vacation that weekend, and she wanted me to show her client my listing.
Sounds almost like an agent that wants a big payday w/o work.. probably one of the Realtors that were added during the boom/bubble. (can you show the house so I can make my % while on vacation and not taking care of my clients). Oy vey!
ucodegen | December 22nd, 2008 at 7:35 amYou would think that by now, these people would be getting smarter? They just don’t get it. Probably never will.
Same for short sales. To me, banks are holding their own version of a silent auction – a really long one. They prey on the same frenzied emotion that started this whole thing in the first place. Keep bidding up or you won’t win the prize. It stinks.
Sadly, I firmly believe that short selling is trendy, nothing more. Once that is over, we may get back to better times.
When we sold our house in WA this year, we got to know the buyers. We sat down and worked out a deal that made everyone happy. They are wonderful people who loved our house. When we finally buy again, I hope we can work with a seller in the same way.
KC | December 22nd, 2008 at 11:37 amMy house is on the market and the buyers we have had through (10) loved it. Once the retire, sell theirs or win the lottery they will buy it. I ask for motivated buyers these days too. Too close to the bottom to take it in the bottom. I am not in CA nor FL. Just a resort town of 65k with snow coming tonight for out skiers!
Sims | December 22nd, 2008 at 2:53 pm…I should add, I don’t have to sell. Just looking to buy a CA beach bargain is CA is getting killed.
Sims | December 22nd, 2008 at 2:55 pm>>I should add, I don’t have to sell. Just looking to buy a CA beach bargain is CA is getting killed.<<
Sims, are serious? So what? a CA beach bargain is now a cool $3 million instead of $5 million:-)
george8 | December 22nd, 2008 at 3:05 pm