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Water Damage

Part of homeownership is handling the unexpected – and there are times when water takes its toll.  If you call your insurance company, expect that they will run up a five-figure expense, and a stain on your record that lasts.  Or you can fix it yourself:

Investor-Driven Market is OK

In this article, the author claims that the real estate market will tank when investors leave the market, and then at the end says,

“The only part of the market that’s busy is the low end where speculators are fighting over a few measly crumbs. The rest of the market is kaput.”

It is typical doomer prose, and is speculating on the real estate market in general.

In our coastal region the market has fared much better, and should sustain just fine, as long as mortgage rates remain ultra-low (under 5%).  We saw here that our under-$1,000,000 market is sizzling hot, and that you have to get into the $2,000,000+ market to find any sluggishness – and there aren’t many investors in that pool.

Reasons Not To Fear Investors Leaving Our Market

  1. Those who are buying-to-rent may tire of the challenges of being a landlord, but they could sell instead.  The burdens of being a landlord probably won’t out-weigh taking a loss, so they will most likely learn a bit about screening tenant applicants and property managers before dumping properties.
  2. The pure flippers are making a killing now, and will continue to soak up anything under $500,000, put some lipstick on it, and resell.  Lower-end buyers don’t mind the spruced up inventory either, and their interest rises with the frustration of losing several bidding wars.
  3. If investors check out, then the owner-occupants with low-money-down will gladly step up – they get blown out in today’s bidding wars.  Nobody on the buyer side would mind if the bidding wars dwindle – which are happening on every decent listing under $500,000.
  4. The mom-and-pop investors would mind getting back into the flipping business, which unfortunately is now dominated with the large investor conglomerates who can purchase several properties per week – and would probably buy more if there were more available.

The casual observers in the media will continue to look for every reason to bash real estate, and look like a hero.  But they need to walk a mile in the shoes of those trying to buy a house around here, and see how competitive it really is.

Foreclosure Animals

WOODSTOCK, Ga. — A family in Woodstock, who just lost their home of 20 years to foreclosure and are preparing to move out, lost even more on Wednesday.  And it was because of what they triggered when they posted a craigslist ad Tuesday night.

Their online post was just a well-meaning ad for a giveaway in their driveway outside the small house, a giveaway scheduled to begin at 10 a.m. Wednesday. But big crowds showed up and ended up taking practically everything inside the house, too.

PHOTOS | Craigslist crowds ransack foreclosed family’s home

Wednesday night, Michael Vercher walked 11Alive’s Jon Shirek through his family’s almost empty soon-to-be former home.

“Well, when we got to the house, I mean, pretty much — this,” he said as he stepped from the foyer into the living room.  Their home — ransacked, ravaged, raked over.  Almost everything inside — gone.

“They came in and just tore the place up,” he said.

People responding to the family’s craigslist ad showed up at the house earlier than 10 a.m., before Vercher arrived there from work to supervise the giveaway.  And when he drove up to the house, he said, they had already broken into it, helping themselves to almost everything inside.

And he could not stop them.

“Everyone was inside the house; they were taking out items,” he said. “There were cars around the block. It was like ants in and out of the house.”

Hat tip to daytrip!

Sizzling Lower-End

While the whole NSDCC market feels like it is cooking, the inventory shortage and resulting dash to tie up properties is restricted to the lower end of each area.

We’ve considered a 2:1 ratio of active listings to pendings to be a fairly normal market, and the higher-end of local markets are in that range – or worse.  But the lower-ends have been scorching hot:

Detached-Home Listings, Under/Over $1,000,000

Town or Area Zip Code Under $1M Actives/Pend+Cont Over $1M Actives/Pend+Cont
SE Carlsbad 92009
51/113
30/9
SW Carlsbad 92011
37/47
14/8
Encinitas 92024
38/57
71/29
Carmel Vly 92130
22/44
57/27
Total AllAbove
148/261
172/73

It supports the notion that there isn’t much move-up buying, at least not up into our higher-end regions. Most sellers fall into three categories: those leaving the county, estates that are liquidating, and the exhausted over-encumbered folks. It is similar in the ultra-high end markets too:

Detached-Home Listings, Under/Over $2,000,000

Town or Area Zip Code Under $2M Actives/Pend+Cont Over $2M Actives/Pend+Cont
RSF 67+91
39/25
167/11
DelMar/SB 14+75
52/43
49/8
La Jolla 92037
68/40
86/19
Total AllAbove
159/108
302/38

The contingents make up about 25% of the Pend+Cont totals, and would make those categories appear slightly bloated, but the short-sales are more likely to close now than ever – because buyers are willing to hang around longer.

Want to purchase a house around North SD County’s coastal region for less than $1,000,000? You can expect a very challenging competition for the good buys. Want to spend more than $2,000,000? You’re in the driver’s seat!

Precision Inspecting

These older buildings require a comprehensive review by top-notch contractors who can quickly identify the problems and put a price on the solutions.  In the competitive times we’re in, it is customary to shorten the contingency period, which I don’t mind because I know I can count on my team of guys to deliver promptly.

In this case, we have seven days to get comfortable with a fourplex built in 1951 that has had no upgrades since – and it hasn’t been occupied for seven years!

Short-Sale Flopping

Why would anyone spread possum urine around a house, turn up the heat and close all the windows for a few days?

Because they’re flopping, of course.

Flopping is the latest in mortgage fraud, in which sellers actually want as low a price as possible.

The scheme works if they are underwater on their mortgage, and their lender agrees to a short-sale, forgiving the difference between the sale price and the amount owed.

The seller unloads the home for the sandbagged price to an accomplice, who can then clean it up and flip it for a quick gain.

Suspicious short sales, ones flipped the same day, accounted for just under 2% of all short-sale transactions in 2011, according to CoreLogic. Floppers averaged a 34% gain. The average profit: $55,000.

Fraudsters can get away with it because banks are swamped with short sale requests — they have more than tripled in the past three years.

The possum urine trick was an extreme example of the methods used to discourage homebuyers, said Ann Fulmer, a mortgage fraud specialist with Interthinx. “It smelled like a Hazmat site,” she said.

Other tactics: Floppers pull out appliances and take cupboard doors off their hinges. They leave dirty laundry lying around and paint what looks like water damage on the ceilings. They might also invent plumbing or electrical problems, and give appraisers fake repair estimates created by cooperating contractors.

The sellers point out the flaws to legitimate shoppers, and when no one buys, the sellers have a convincing argument to make to the bank, according to Tim Coyle, director in the Financial Services division of LexisNexis Risk Solutions.

They can say: “Look, I’ve tried to move this property for six months and haven’t been able to — we need to lower the price,” said Coyle. “They convince banks that the value of the property has deflated.”

It can be hard to refute bogus damage claims without full investigations, according to Rob Hagberg, associate director of fraud investigation for Freddie Mac.

One flopping scam that relied on heavy repair estimates was repeated several times in the Ogden, Utah area. A group kept claiming houses had been contaminated with residue from crystal meth labs.

“It was the same cast of characters on multiple properties,” said Hagberg.

Noticing the pattern, Freddie Mac investigated and broke up the ring.

The agency solicits help from the public to bust floppers and has a toll free number to report suspicious activity — 1-800-4fraud8.

Hat tip to Mr. T for sending this in:

http://money.cnn.com/2012/10/23/real_estate/mortgage-fraud-flopping/index.html

Alta Del Mar

The promotion has begun on Pardee’s highly anticipated development at the edge of the 800-acre Carmel Country Highlands – Alta Del Mar.  They didn’t mention prices, but we believe that the estate homes, ranging from 4,151sf to 6.235sf will start around $1,700,000.  The custom lots should be around $600,000 to $1,200,000?

http://www.altadelmar.com/estate/

When you visit, take your favorite realtor with you! Click on image to enlarge:

Salesmanship

What do you mean, “arrogant listing agents”?

The listing agent’s job is to promote the property in a way that generates the most offers, and once those offers are submitted, to handle them in a way that results in a smooth, top-dollar sale for the seller.

While that sounds obvious, these days it is going the other way – with listing agents doing many things to impede offers.  The evidence is everywhere: few and/or lousy photos, multiple barriers to showings, refusing to answer or return calls, slow or no response to offers, and unethical behavior at every turn.

The MLS allows for listing agents to attach additional documents to their listings to help promote a sale – floor plans, brochures, etc.  But now it has become common for agents to attach their FAQs, whose intent is to assist you with the basics answers, but are really a stern warning that they have no inention of cooperating with you or your sale.

Here are examples:

  1. Is the listing still for sale?  If it’s active in the MLS, it’s for sale.
  2. Do you have offers? We don’t disclose that.
  3. How many offers do you have?  We don’t disclose that.
  4. Do you have offers near, at, or over the list price? We don’t disclose that.
  5. What do I need to do to win? We don’t disclose that.

These Q&As don’t promote a sale, they are a turnoff.  It is in the seller’s best interest to be open and honest with other agents about what is happening!

Buyer-agents don’t want to waste their time on properties where they know nothing about the current status.  Conversely, if they call and get an enthusiastic voice on the line that gives specific answers, the buyer’s agent is much more likely to pursue selling it.

Buyers want transparency – the more you can give to them, the more likely they will respond favorably.  I still answer my own phone, and take these agent calls myself – list your home with me, and I will properly promote your property!

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