Carlsbad Off-the-Grid

This youtube video is a scouting tour of houses that have dates scheduled for their trustee sale. The loan-modification era is wrapping up, and either you got one by now, or your lender is going to be left with no other choice but to foreclose.

More and more homedebtors are going down with the ship – if you’d like to buy a house on the steps of the court house, contact me!

Here are a few examples of what coming in Carlsbad:

Pool Demolition

With home buyers concerned about safety and costs, swimming pools have lost appeal in recent years.  The house pictured shows the worst offender – the pool that takes up the whole backyard.   

There’s an opportunity for flippers here – buying houses with old pools, do the demo and landscape, and then re-sell them.  There could be a $40,000 to $50,000 benefit turning a big negative into a big positive.

from the U-T: 

“It wasn’t getting any use and had become the proverbial money pit to keep up,” said Allen, who estimated he was spending $200 a month for water, electricity and maintenance.

So Allen turned to Bill Stults, owner of James Construction Cleanup Inc., to transform his swimming hole into a backyard landscaped with artificial turf, decorative rocks, cactus and a small bubbling fountain.

For Stults, business is booming. He said he is filling about two pools a week, a number consistent with work being done by other contractors in the county.

“I’m getting calls all of the time, sometimes three or four a day,” Stults said.

He and the other contractors say clients offer a variety of reasons for replacing their pools, work that costs between $5,000 and $12,000.

Some cite the water crisis. Others say they can’t afford the increasing maintenance costs, especially for older pools. Others say they have simply tired of the pool and want a yard.

Although building departments do not keep statistics on the number of pool removals, many building officials countywide say they are seeing a slow and steady increase in the number being removed and expect the trend to continue. Demolition companies report as much as a 30 percent increase in pool removals since the first of the year.



Choosing a Realtor

Most buyers struggle to find a quality realtor to assist them in buying a house, and it’s the realtors’ fault.  The national, state, and local associations are so adamant about protecting the new agents and giving everyone an equal chance, that they provide no help whatsoever to the general public. 

Their message?  When trying to find good help, you’re on your own.

So how do you get what you need?

Everyone tells you to ask around, get referrals from friends, go to open houses, go with a big company, go with a small company, new agent, old agent, kickbacks, etc., that it probably doesn’t matter where you get a realtor, what matters is how to evaluate them.

Here are my things to look for when evaluating a realtor’s ability to help you buy a house:

1. ASK ABOUT THEIR RECENT TRACK RECORD OF SALES – Let’s cut to the chase, shall we? 

Has the agent been able to successfully guide others to the finish line this year?  The best answer is 1-2 closings per month, if you want an agent who delivers personal service.  Any agent who sells four or more per month is slamming people into houses, and those at zero, well let’s face it, they don’t have anything of value to add to the equation.  Get a testimonial from a past client, and/or at look at the sales they’ve done and judge them to see if they were good deals.  (I’ve assisted 10 buyers with closing their sale this year).

These current market conditions are unlike any seen before.  If your agent has been closing some buyer transactions this year, they must have something of value to share.  Here’s what to look for:

2. ASK THEM, “WHAT/WHERE ARE TODAY’S HOT BUYS?  How they answer that will tell you just about everything you need to know.  If they give you a smart-aleck answer, they probably aren’t the right agent for you, only because they aren’t in the game.  If they can name one, at least they are looking at properties, and those are agents who can provide value – ideally your buyer’s agent is previewing property every day, in person.

3. THEY SHOULD ASK YOU QUALIFYING QUESTIONS – If they jump in the car without asking questions, their time must not be too value to them, and this isn’t a business where wasting a lot of your time makes for good quality realtors. 

4.  THEY SHOULD KNOW ABOUT FINANCING – I guess it’s alright if they just hook you up with their lender to get pre-qualified, but if they can ask/answer the qualifying questions themselves, it might help when it comes time to structure an offer.

5. HAVE THEM SHOW YOU SOME HOUSES – Go in their car, and if they don’t need a map to get around, you’ve found an experienced veteran.  It’s not guaranteed that they can help, nor is it required, but it’s a good indicator.  If they are pointing out specific sales/listings along the way (theirs or others), then they know the comps too, which is another great indicator.

6. EVALUATING THE PROPERTY’S CONDITION – They don’t have to be a general contractor, but they should be able to educate you about the property’s condition.  If all they do is point out that “This is the living room”, they’re not going to have much to offer in terms of added value, unless you don’t know what a living room is.

7. HAVE A VENDOR’S LIST – Successful agents know professionals to call to fix stuff – the more thorough the list, the more problems they have encountered.

8.  DO THEY CHARGE FOR THEIR SERVICE? – Ask about “transaction fees”, “processing fees”, or “compliance fees”.  These are junk fees used to pad their bottom line, and are not required.

9.  DO THEY INSIST ON HAVING YOU SIGN A BUYER-BROKER AGREEMENT? – Pass on those, unless you got married after having one conversation too.

10. “FORECLOSURE SPECIALIST” – Be very leery – we are all foreclosure specialists now.  Any agent who tries to make it sound like they have some special “foreclosure ability” is blowing smoke, unless they are listing REOs and not putting them on the open market.  If they don’t mind breaching their fiduciary duty to their bank-seller, they’ll sell you down the river in a heartbeat.

11.  SHORT SALES – I personally see 2-3 short sales every day that have already found their buyer before MLS input, and it is VERY frustrating.  These agents don’t care about their own reputation amongst their peers, and that alone should make you wonder.

12.  OFF-THE-GRID – Ask about what agents can do to find properties that aren’t on the regular websites.  Any positive response would be a good indicator, and any examples of closing one would be even better.

If they can get through those questions and you still like them, you found a good agent!

NEW AGENTS – A new agent’s zeal and availability can really help buyers who don’t have the time or willingness to search for properties themselves.  Want somebody to do the legwork for you?  Put a new, hungry agent on it, but there may be some struggle clinching the deal if there are competing offers.

OUT-OF-COUNTY AGENTS – You’ll be doing all the work yourself, so your own proficiency in being a realtor needs to be up to par.

RELATIVES – Many deals crash and burn, and hearts are broken over houses.  Want a relative to help you?  Make sure that you’ll accept never wanting to talk to them if they cost you the right house, at the right price.  

“GREAT TIME TO BUY” – If you hear that catchy phrase, just walk away. 

The inventory of quality homes at good prices is EXTREMELY LOW, causing the buying experience to be full of frustration and disappointment.  You can look for weeks or months without seeing anything attractive, so I don’t know why any agent would call that a great time.

REALTOR TEAMS – No problem, but don’t interview the big dog and then get passed off to the assistant without asking the same questions.  You want to be clear about who is helping you, and what you can count on.  In my case, I may have Richard or another KR realtor help me on occasion, but I’m still the main person in charge, and am responsible for your success.

Look Around Before Buying

The salespeople at the downtown Oceanside condo project reported that they sold all 29 units at the auction on Sunday, with every one of them going for more than the opening bid, some substantially higher.

If that leaves you scratching your head, it may be because you know downtown Oceanside like I do – if not, here’s a guided tour.  The lesson?  If you are buying real estate anywhere, know the neighborhood!  Drive around, ask questions, investigate – you will probably be owning the property for a long time!

The youtube video tour:


The Union-Tribune has Dataquick’s June, and 2Q09, foreclosure data in this article:


Hopes that a recent rise in San Diego County home prices would signal an end to the housing slump were tempered yesterday when MDA DataQuick reported that foreclosures in June surged nearly 66 percent over the previous month.

The report also found that the rate of foreclosure continues to rise in higher-priced coastal areas, such as Point Loma, Coronado and Solana Beach. The bulk of foreclosures, however, continue to be concentrated in inland, entry-level areas, such as Encanto, Chula Vista, Otay Ranch, Spring Valley and North Oceanside.

DataQuick reported 1,630 countywide foreclosures for June, compared with 985 in May. It was the single greatest monthly increase since December 2007. However, the June count was down by 11 percent from a year ago.

For the second quarter of 2009, there were 3,518 foreclosures in the county, a 14 percent rise over the previous quarter but a 27 percent decline from the second quarter of 2008.

DataQuick tallied 3,436 June notices of default, which begin the foreclosure process. It marked a 12 percent increase over May and an 11 percent increase over June 2008.

In the article, they have a chart that ranks each zip code based on how it’s 2Q09 foreclosure data compared to the average of the previous four quarters.  Nowhere do they mention that almost 3/4s of the zips had a decline in their quarterly foreclosure data, comparatively:


The U-T must be light on shock-value news today.

Contest Winners!

We have a winner of the contest to guess the number of detached sales in 2Q09:

This morning’s number is 5,886 – Genius, congratulations, you won the tickets for six box seats at the track!

Here were the guesses:

Guess Guesser
4,850 T
5,250 tj and the bear
5,323 Al in IC
5,325 Kingside
5,358 Kirk
5,406 Phil
5,451 Del Sur Renter
5,500 carmelgirl
5,512 3clicks from da beach
5,553 JAP
5,577 justme
5,578 whatif
5,580 mtb
5,675 Wes
5,678 Kwaping
5,681 The Wood
5,742 Neil Diamond
5,767 Stephen Waits
5,800 propertysearch
5,840 Happs
5,846 mybleachhouse
5,900 Genius
5,950 Erica
5,955 Strider
5,983 CA renter
5,991 osidebuyer
6,000 doughboy
6,001 AlexSD
6,021 bobfather99
6,021 Jaclyn
6,037 KO
6,090 Poorhouse
6,116 IRE
6,127 Nathan
6,200 JG
6,250 KlangOside
6,351 m
6,375 Sol
6,378 Scooter
6,400 Myriad
6,551 Casasolana
6,560 The Blur
6,565 Bryce
6,601 UCgal
6,625 REB
6,700 OCVulture
6,720 Local Boy
6,848 FuturesWatcher
6,856 pigpen
6,942 FirstTimeRenter
7,001 greenlander
7,017 Mike C
7,050 shoppingaround
7,179 mab

Year # of Sales $$/sf
2000 6,620 $174.86
2001 6,358 $196.19
2002 7,358 $221.47
2003 7,371 $254.73
2004 7,960 $377.54
2005 7,724 $361.65
2006 5,767 $368.96
2007 4,899 $357.88
2008 5,020 $278.15
2009 5,886 $223.01

The $223.01 represents a 41% decline since 2Q04.


We also had the contest to guess the eventual sales price of the REO that listed for $314,900 on Dixon in Oceanside. It sold for $351,000 – Congratulations Myriad, you have four tickets to a Padres game coming your way!

Guess Guesser

$344,800 Rob Dawg
$345,000 doughboy
$346,000 Atenbrown
$346,800 FreedomCM
$347,000 sd nerd
$349,000 Don Q
$349,500 Myriad
$355,000 Mojo
$362,000 Stephen Waits
$415,000 newbie

Link to Original Contest Post with video


This tour of San Elijo Hills includes a house sold in March by one of the Lopez Brothers, who ran Century 21 Eldorado.  The Mortgage Fraud Blog has a good summary of their specific fraudulent acts:


During the conspiracy, they brokered fraudulent loans (including first and second mortgages), averaging approximately $400,000, for over 200 unqualified clients.

As part of their guilty pleas, the defendants admitted that they solicited clients at swap meets and by advertising in Spanish language newspapers and publications and on Spanish language radio stations. At times they used third parties with higher credit scores as “straw buyers,” misrepresenting to lenders that the third parties would occupy the homes. To fraudulently qualify clients for loans, the Lopez Team inflated clients’ incomes and bank account balances; falsified employment, rent, and credit information; misrepresented that clients were United States citizens; used altered social security cards and bank statements; and purchased from tax preparers letters that misrepresented that clients were business owners and that the tax preparers had prepared the clients’ tax returns. When lenders called to check the references, they impersonated employers, landlords, and creditors to falsely verify the information.

The defendants admitted that they obtained $1,070,000 in loan commissions from their fraudulent loan activities. As part of their plea agreements, Alejandro Lopez, Emilio Lopez, Sekhon, and Velasquez have agreed to repay to the Government their illegal gains, totaling $1,070,000, in the form of forfeitures or fines.

The Lopez brothers lost a home at the end of Schoolhouse to foreclosure, and sold short the one featured in the video below.

Emilio and his wife still own this house on La Plaza for which they paid $1,311,000 in Sept., 2004, with loans over a million dollars.

At least Emilio’s real estate license was revoked in November, 2008.


In the San Marcos zip code 92078 there are a total of 375 NODs, NOTs, and REO properties, according to Foreclosureradar.com: 

NOD = 207
NOT = 117
REO = 51

Year-to-date there have been 66 properties foreclosed in 92078. Thirty-five of those trustee sales have happened since June 1st, and of those, seven (or 20%) were sold to a third-party, rather than back to bene.


Debunking Foreclosure Myths

Let’s review some of the foreclosure theories of today’s world.

BUNK #1 – Banks are holding back properties.

In San Diego’s North County Coastal region, there aren’t many REOs not on the open market.  The video tours you’ve seen over the last few days covers almost all of the ones listed on foreclosureradar that are bank-owned, but not on the MLS, and two of them came on the MLS while filming.

BUNK #2 – Banks are delaying trustee sales on purpose.

Only those behind the scenes could verify, so I don’t know for sure.  I think the reasons you see delays between the initial NOD and the eventual sale has more to do with the borrower – and in particular, their realtor.  Between short sales and loan modification requests, the loan servicers have to be inundated, and it has to be easier to postpone a trustee sale another month, than to efficiently handle each file.

BUNK #3 – Banks don’t want to mark to market.

The name-brand banks like Countrywide/Bank of America don’t own these loans, they sold them years ago to MBS-buyers, and are now just administrating.  The servicers earn transaction fees by facilitating the trustee sales – if they are delaying, it’s because the MBS-owners are so ticked off at them, and they don’t want to know or experience reality.

BUNK #4 – Foreclosures cause lower prices.

An old wives’ tale in today’s world.  Bank-owned listings ARE the market, and are selling for retail.  Why? Because the servicers have a duty to their MBS-owners; they get at least one appraisal done, and price them accordingly – if the list price is too low, buyers bid it up.  As long as they hit the MLS, they sell for full market value, the massive internet exposure ensures it.

Regular sellers think that foreclosures undermine values, but that’s because sellers are addicted to their dreamy sky-high price from yesteryear.  You regularly see REOs listed for $50,000 to $100,000 under other regular sellers, but guess who is right about price?

BUNK #5 – “Stealing one from the bank”.

Very unlikely, see above.

BUNK #6 – Foreclosures need work.

As more McMansions get foreclosed around North County, you’ll see less destruction of property – I think some of the newer ones will be in great shape, based on what I’ve seen so far.  Why?  I don’t think the homedebtor is that desperate, and the free rent helps.  It’s a relief to not make those big monthly payments for months or years, and besides, have you ever tried to move a built-in fridge?  McMansion owners won’t bother on their way out.  Plan on a good coat of paint and new carpet, just like in all houses for sale.

BUNK #7 – The coming foreclosure tsunami will overwhelm the demand.

I’m not so sure of that – the foreclosure numbers have been fairly steady for the last 18 months, and the REOs have been gobbled up.  It would take a lot more.

The local market has been able to withstand 3,000 to 4,000 NODs monthly, and they would have to get into the 5,000-and-up level, which I think is very possible.  If there were 1,000 foreclosed McMansions that hit the open market in the same quarter in North County Coastal, and the demand wasn’t there, then price will fix it – once you get around $700,000 the available loan possibilities open up. 












With the lack of well-priced inventory throughout the coastal region, buyers (and realtors)  would welcome some good buys!  Buyers have been VERY frustrated with this season’s offerings, and either the regular sellers need to get off their high horse, price-wise, or the buyers will gladly wait for the tsunami.

Any others?

REO Shadow Tour 4

You’ll hear in this tour of Carlsbad REOs that banks are dropping the opening bids at the trustee sales to at, or below, market prices, and they are still going back to bene(ficiary).  In the video I lay out the game plan for buying direct at the trustee sales, which I’m happy to do.

But the real test is: what will the eventual list prices be for these?  If they list for the same as their opening bids, then forget buying at the trustee sale.  I’ll take my chances battling off the multiple offers, in exchange for full rights of house inspection, title insurance, and the ability to finance.  It might be worth another 5% or so for that convenience, plus the bank/seller pays the commission.

We’ll see – my guess is that the bank-sellers are going to use the appraisals, and list higher.  This group will be our test case.

The other challenge is that most of these bank-sellers haven’t been determining the opening bid until the day of the trustee sale, which leaves you an hour or two to scramble down to the courthouse with your cashier’s checks.  For those who are liquid for the entire amount of the purchase plus costs, and have flexible schedules, these are opportunities.  For the rest, well I’m still hopeful we can pull financing together.

I prefer not to do these, they are risky and not for the faint of heart.  But if it’s where you get the best deals, then it’s my job to facilitate you being able to take advantage.

BTW, at the end of the Mar Fiore rant the camera points at two houses, and I blurt out, “They sold for $1.2 & $1.3”. They sold for $875,000 in 2002 (corner lot), and $881,000 next door in 2003. It’s the third house in that is currently listed for $1,179,000. Other sales on that Cassins culdesac include $1.65 (10/05), $1.575 (7/07), and $1.275 (4/08).

Here is the youtube video tour of Carlsbad shadow REOs:

REO Shadow Tour 3

Here are more from the shadow tour, two REOs in Rancho Santa Fe plus one in Encinitas on Ocean View, next door to the REO that just listed for $1,299,000, and closed for $1,325,000. Both sold originally for $2,300,000:

Carlsbad has a lengthy tour coming up next.

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