Surprised we don’t see more of these – and wouldn’t you disappear after stealing $5 million?
LOS ANGELES – A Southern California brother-and-sister team were arrested today on federal charges alleging they orchestrated a $6 million real estate fraud scam in which they listed homes without the owners’ consent and collected money from multiple would-be buyers for each of the not-for-sale homes.
Adolfo Schoneke, 43, of Torrance, and his sister, Bianca Gonzalez, a.k.a. Blanca Schoneke, 38, of Walnut, each pleaded not guilty this afternoon to nine charges contained in an indictment unsealed after their arrests. The indictment charges Schoneke and Gonzalez with one count of conspiracy, seven counts of wire fraud, and one count of aggravated identity theft.
According to the indictment, Schoneke and Gonzalez, with the help of co-conspirators, operated real estate and escrow companies based in Cerritos, La Palma and Long Beach under a variety of names, including MCR and West Coast. The indictment alleges Schoneke and Gonzalez found properties that they would list for sale – even though many, in fact, were not for sale, and they did not have authority to list them for sale – and they then marketed the properties as short sales providing opportunities for purchases at below-market prices.
Using other people’s broker’s licenses, Schoneke and Gonzalez allegedly listed the properties on real estate websites such as the Multiple Listing Service (MLS). In some cases, the indictment alleges, the homes were marketed through open houses that co-conspirators were able to host after tricking homeowners into allowing their homes to be used.
As part of the alleged scheme, the co-conspirators accepted multiple offers for each of the not-for-sale properties, hiding this fact from the victims and instead leading each of the victims to believe that his or her offer was the only one accepted. The co-conspirators allegedly were able to string along the victims – sometimes for years – by telling them closings were being delayed because lenders needed to approve the purported short sales.
The indictment also alleges that Schoneke and Gonzalez directed office workers to open bank accounts in the office workers’ names. Those accounts were used to receive down payments on the homes and other payments from victims who were convinced to transfer the full “purchase price” to these bank accounts after receiving forged short sale approval letters. Schoneke and Gonzalez also allegedly directed the office workers to withdraw large amounts of cash from these accounts and give it to them – a procedure that allowed Schoneke and Gonzalez to take possession of the fraud proceeds while hiding their involvement in the scheme.
Investigators estimate that several hundred victims collectively lost more than $6 million during the scheme.
Staging and professional photos create the best first impression of a home, which helps to pre-sell the buyer. It makes them want to get there faster to confirm they’ve found the right house for them. How much does staging add to the price? Hard to put a specific number on it, but you should have more offers faster. What drives the eventual price in this market is how the listing agent handles multiple offers.
WASHINGTON (April 6, 2021) – A new survey from the National Association of Realtors® reveals that home staging continues to be a significant part of the home buying and selling process.
The biennial report, the 2021 Profile of Home Staging, examines the elements of home staging, including the perspectives of both buyers’ and sellers’ agents, the role of television programing and the expectations of buyers.
“Staging a home helps consumers see the full potential of a given space or property,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “It features the home in its best light and helps would-be buyers envision its various possibilities.”
Buyers’ agents overwhelmingly agreed, as 82% said staging a home made it easier for a buyer to visualize the property as a future home.
These agents also said that visuals themselves are helpful, even more so in relation to buying a house during the coronavirus outbreak. Eighty-three percent of buyers’ agents said having photographs for their listings was more important since the beginning of the pandemic. Seventy-four percent of buyers’ agents said the same about videos, and 73% said having virtual tours available for their listings was more important in the wake of COVID-19.
“At the start of the pandemic, in-person open house tours either diminished or were halted altogether, so buyers had to rely on photos and virtual tours in search of their dream home,” said Lautz. “These features become even more important as housing inventory is limited and buyers need to plan their in-person tours strategically.”
Staging also increased the sum buyers were willing to spend for a property, according to the report. Twenty-three percent of buyers’ agents said that home staging raised the dollar value offered between 1% and 5%, compared to similar homes on the market that hadn’t been staged.
Coincidently, the response from sellers’ agents was nearly identical, as 23% reported a 1% to 5% price increase on offers for staged homes.
Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%. None of the agents for sellers reported that home staging had a negative impact on the property’s dollar value.
Moreover, 31% said that home staging greatly decreased the amount of time a home spent on the market.
Exactly which parts of a home to stage vary, although living rooms (90%) and kitchens (80%) proved to be the most common, followed closely by master bedrooms (78%) and dining rooms (69%). As many workers were forced to work from home due to the pandemic, 39% staged a home office or office space.
Television programing played a noticeable role in how buyers viewed a potential property, according to Realtors®. Agents surveyed said that typically 10% of buyers believed homes should look the way they appear on TV shows. Sixty-three percent said buyers requested their home look like homes staged on television. Sixty-eight percent of Realtors® reported that buyers were disappointed by how homes appeared compared to those seen on TV shows.
In some cases, agents found that TV shows could influence a buyer’s perspective about a home. Seventy-one percent of respondents said that TV shows that depict the buying process impacted their business by setting unrealistic or increased expectations. Sixty-one percent said that TV programs set higher expectations of how homes should look, while 27% said that TV shows result in more educated home buyers and sellers.
“The magic of television can make a home transformation look like it happened in a quick 60-minute timeframe, which is an unrealistic standard,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and broker/owner of Prominent Properties Sotheby’s International Realty. “I would advise buyers and sellers alike that before house hunting or before listing, they connect with a trusted Realtor® to get a reasonable sense of what’s out there and an idea of what to expect.”
Eight-one percent of those surveyed said buyers had ideas about where they wanted to live and what they wanted in an ideal home (76%) before they began the buying process.
Forty-five percent of surveyed Realtors® said they have seen no change in the share of buyers who planned to flip a home in the last five years, while 42% said they had.
Also, 59% said they have seen an increase in the buyers who planned to remodel a home in the last five years, while 34% said they have seen no change. Agents surveyed said that typically 25% of buyers who plan to remodel will do so within the first three months of owning their home.
The real estate market was boisterous in last half of 2020, which made it easy to predict that once we got past the election and into the new year we’d probably see the Greatest Real Estate Frenzy Ever.
Let’s use February 22nd as the day the frenzy really kicked in.
It was the day that this home was listed for sale, after a troubled past:
2005: $679,000 Sold (vacant lot)
2007: $550,000 Sold (vacant lot)
2008: $2,000,000 borrowed from WaMu
2009: House built
2015: $2,137,500 WaMu/Chase FORECLOSED
2016: $1,930,000 Sold
2018: $2,875,000 listed for sale for the next 18 months
2019: $2,044,000 Borrowed in January
2019: $2,225,000 last list price before FORECLOSED
Let’s review how some listing agents have been handling their bidding wars in 2021.
Ignored a $60,000 non-refundable deposit and took an offer that was $40,000 lower.
Once they get to the highest offer, they insert their own buyer at the same price.
Let an escalation clause determine the winner, and ignore the others.
Counter for highest-and-best, then pick a winner before everyone responds.
Not respond at all.
There are no rules. No guidelines. No laws.
The best our association can do is to issue a spreadsheet form.
Thus, anything goes.
Here’s how I handle it.
The home on Galena Canyon had originally listed for $1,599,000 and had 25 showings and six offers over the first weekend in March. We had three buyers (one was contingent) who were willing to pay around $1,750,000, so I asked the two non-contingent buyers to make their second highest-and-best offer to determine the winner – which they did, and $1,770,000 won it. I changed the list price in the MLS to $1,770,000, and marked it pending.
Last Friday morning, the buyer had an unforeseen glitch, and we fell out of escrow. We go back on the open market for Easter weekend, hoping for the best – knowing that the urgency is much higher when the listing is new and fresh.
I had added this to the confidential remarks:
Since we hit the market, these have happened: 16175 Deer Ridge 3,451sf closed for $1,775,000 on March 1st. 15288 Cayenne Creek 3,877sf closed for $1,800,000 on March 30th. 16342 Cayenne Creek 3,446sf pending, listed for $1,825,000. 9716 Wren Bluff 3,780sf pending, listed for $1,835,000. Plus Mark listed one for $2,795,000 around the corner. Built-in equity!
This time, we had six showings and three offers over list, which I thought was pretty good.
I had told the agents to make their highest-and-best offer, and while they were all competitive, I thought there might be more gas in the tank. So I politely asked all three to H&B again, and one emerged from the others by packing another $40,000 onto their first offer.
We are in escrow at $1,840,000, after starting at $1,599,000 a month ago.
Isn’t that the result you’d like to see for yourself, or someone you know?
It is not a given how listing agents handle a bidding war. Most agents just grab their favorite, and turn off their phone. You deserve better.
If you, or someone you know, is thinking of selling, I’d sure appreciate a call!
Did you get concerned about the pending index falling another 10% last week?
The U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales.
Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the National Association of Realtors. Sales were 0.5% lower year over year.
“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift,” said the Realtor’s chief economist, Lawrence Yun. “But contracts are not clicking due to record-low inventory.”
The pendings between La Jolla and Carlsbad are doing just fine. In spite of the total number of NSDCC homes for sale being fewer than usual, people are still buying at a torrid pace:
Our market was helped by having more homes for sale.
New NSDCC Listings in the First Quarter:
2019: 1,278
2020: 922
2021: 1,081
After the first two months of this year, the total number of NSDCC new listings was 26% behind 2019.
But we had a big March, and the number of new listings in 1Q21 is only 15% behind those in 2019.
This isn’t the type of environment that you should put much stock in your latest zestimate.
A month ago, on March 3rd, the zestimate was $1,336,035.
Today, on April 4th, it is $1,723,510.
Zillow wants you believe that their zestimates are within 1.9% of being right. But if you would have sold this home to them for the latest zestimate amount, you still would have left $100,000+ on the table.
We have another disrupter who is providing a service you didn’t know you needed until now.
Traditionally, a buyer’s agent accompanies their clients to show them the homes for sale, and to give expert advice about each house while on site. But other real estate companies – who don’t appreciate that valuable service – have dumbed it down by just paying door-openers that allow buyers into the house, but leave them on their own to figure out the rest.
A new company has taken it one step further, and is providing an Uber-like service where random agents can get paid for opening doors for other agents.
The company charges $39, and pays $24 of it to the door-opening agent – who agrees to not offer advice to the buyers, and to direct them back to the agent who paid the $39 showing fee.
Matthew makes the case here that the current uptick in mortgage rates may not affect home prices:
There was a big rate spike at the end of 2016 that had no discernible effect on prices. This is notable because that rate spike was fueled by economic optimism as opposed to 2013’s rate spike which happened after the Fed said they would begin decreasing their rate-friendly bond buying program. 2018 was somewhat similar as the Fed was continuing to tighten monetary policy and raise short term interest rates.
A case could be made that the current rate spike shares some similarities with 2016. The path of 10yr Treasury yields (a benchmark for longer term rates like mortgages) has largely traced pandemic progress and economic recovery hopes. Yields (aka rates) began rising late last summer as vaccine trials showed promising results and economic data began to improve.
Rates spiked more quickly in the new year as vaccine logistics ramped up and covid-relief legislation was passed. Fiscal spending hurts rates both due to both its positive implications for the economy (a stronger economy supports higher rates) and the implication of more US Treasury issuance (more Treasury supply = lower bond prices = higher bond yields = higher rates).
But it is predicated on mortgage rates staying about where they are today, which is around 3.0% – 3.25%. The demand has been strong enough that rates in the low-3s should be acceptable and that the bidding wars will sort out the rest of what happens to pricing.
He also makes the case that the 10-year bond yield and mortgage rates have re-connected. The 10-year closed at 1.71% yesterday, and if things go right, it will stay in that ballpark.
But there has been times when the 10-year has kept rising. If that happens again, we might see 4% rates:
If mortgage rates get back to 4%, we should see pricing flatten out. Let’s keep an eye on the 10-year yield!
