Hola, People.
The Wall Street Journal just reported on an organization (The Center for Economic and Policy Research in Washington DC, or CFEAPRIWDC. Not the catchiest acronym) that came out with a crazy formula that can determine if you should buy a home or rent. It's called the "price-to-rent-ratio" (Again, not too catchy).
"Take two houses of similar size and quality—one for sale and one for rent—in the same neighborhood, or comparable neighborhoods. Take the price of the home for sale and divide it by the total cost of renting the other house for a year. If the resulting number is higher than 20, it's likely the price of the home for sale could fall further. Thus, renting might be a better option, says Mr. Baker. However, the price is most likely near its low if the figure is 15 or below; 15 is the general average price-to-rent ratio over time, Mr. Baker says, and the number at which rental and ownership costs are close to even". That's what he says. I like that he put a formula to it, I just do not understand his reasoning. The strange thing is, I agree with the out come.
Here's where he said San Diego is:
"Median home price: $387,816 (Closer to $350,000)
Average monthly home payment: $2,525 (Could be, with taxes & ins)
Average rent: $1,249 (Is he kidding? probably closer to $1800)
Price of appliance repair: $46.79 (23% below average) (I have no idea).
The article further states:
"San Diego presents an attractive buying opportunity. Prices have stabilized and in many cases are going up, says Mr. Yun.
Services are also below the national average, which puts another check in the buy column."
So, I do not know how he came up with his #s or his formula, but I do agree with this Nutty Professor's hypothesis for San Diego. I have no idea what the rest of the country think of his findings.
Click on the title for the rest of the article.
God Bless.
Tuesday, March 30, 2010
Sunday, March 28, 2010
Real Estate Investments & The Flip Is Dead
Hey, People.
If you've watched all of the reality shows on how to invest & fix up properties to "flip" we have some re-educating to do. The "flip" is dead (At least in San Diego) unless you buy the property at an auction for all cash (Someone will find that one in a million example to prove me wrong. That house that was bought for $100K, had it's light bulbs replaced and was flipped for $200K. On a whole, flips are dead).
Properties on the market are priced correctly (Again, somebody will find that lotto house that only needed the drive way swept before he flipped it for a quick $20K).. Do not think you can buy something, slap on some paint, throw in a Ficus tree and think you can sell it for a profit. The seller knows (At least his listing agent knows) how much to deduct for paint and other cosmetic fixes. Plus you have closing costs (On the buy and the sell), mortgage payments to make while you own it & realtor commissions (96+% of all houses sold are done through a Realtor. You don't have to use one but it will usually take you longer). It ain't 2004.
The good news? Since it's not '04 and since prices have come down mucho faster than rents, it's a great time to invest in rentals. I have a client who's in escrow on a duplex that she's paying $315,000 for. The rents come to $2550 a month, gross profit. Her mortgage payment, taxes & insurance will come to under $1750 a month. A potential of $800 a month in her pocket. That's just potential. To be safe, you should multiply your gross rent ($2550) by .8. That comes to $2040 net before mortgage, $300 a month of approx net.
That's about a 7.5% capitalization rate (Take the net rents, before mortgage, and divide it by the sales price. The higher the rate the better). Back before '06 you'd be lucky to get a 4 or 5% cap rate.
These are pretty conservative #s, you should do better on your investment.
Check out the old article I found by clicking on the title.
Call me with any questions on investments, 619-507-7449 or email me at jack@rowellrealestate.com
God Bless.
If you've watched all of the reality shows on how to invest & fix up properties to "flip" we have some re-educating to do. The "flip" is dead (At least in San Diego) unless you buy the property at an auction for all cash (Someone will find that one in a million example to prove me wrong. That house that was bought for $100K, had it's light bulbs replaced and was flipped for $200K. On a whole, flips are dead).
Properties on the market are priced correctly (Again, somebody will find that lotto house that only needed the drive way swept before he flipped it for a quick $20K).. Do not think you can buy something, slap on some paint, throw in a Ficus tree and think you can sell it for a profit. The seller knows (At least his listing agent knows) how much to deduct for paint and other cosmetic fixes. Plus you have closing costs (On the buy and the sell), mortgage payments to make while you own it & realtor commissions (96+% of all houses sold are done through a Realtor. You don't have to use one but it will usually take you longer). It ain't 2004.
The good news? Since it's not '04 and since prices have come down mucho faster than rents, it's a great time to invest in rentals. I have a client who's in escrow on a duplex that she's paying $315,000 for. The rents come to $2550 a month, gross profit. Her mortgage payment, taxes & insurance will come to under $1750 a month. A potential of $800 a month in her pocket. That's just potential. To be safe, you should multiply your gross rent ($2550) by .8. That comes to $2040 net before mortgage, $300 a month of approx net.
That's about a 7.5% capitalization rate (Take the net rents, before mortgage, and divide it by the sales price. The higher the rate the better). Back before '06 you'd be lucky to get a 4 or 5% cap rate.
These are pretty conservative #s, you should do better on your investment.
Check out the old article I found by clicking on the title.
Call me with any questions on investments, 619-507-7449 or email me at jack@rowellrealestate.com
God Bless.
Tuesday, March 23, 2010
KRAZEE
People.
If you own, rent, buy, sell, invest, look at, build on, tear down, or do something else revolving around real estate then you are a target for coo-coo people. Case in point.
I was putting a lockbox on a listing of mine in P.B. when someone asks me "can I help you?". Anytime I'm asked that I feel like just saying "no" and going on about my business. But, I decided not be rude and I introduced myself and told the guy I was the listing agent for this particular dwelling. I shook the guy's dead fish hand and listened to his story of how he was interested in renting the place from my seller (My seller had moved out of state) but he couldn't get a hold of her. He mentioned that my seller did not call him back a couple of times before he asked me for her phone #. "I'm sorry. I can't give it to you. If you want I can relay a message for you" was my uncomfortable reply. I gave him my card and prayed that he would not call.
Within an hour he called me. He started telling me of this great plan he had when I interrupted him and asked him to call me back in 20 minutes. I then tried to get a hold of my seller to ask her if this is a friend of hers so I would know how short with this guy I could be. He called me approx 10 times inside of an hour (Hell no I didn't answer) leaving me one message telling me that I really should answer the phone.
The next day I finally got in touch with my seller and told her of the evil plot going on and that I was against it. She told me that the guy gives her the creeps too (Thank goodness) and that she did NOT want to rent to him. Now I was armed.
I was just about to call my stalker when he called me. I let him state his case. He wanted to rent her place for $2000 a month and give me a $1000 (For que?). He told me "If you're smart (No one ever accused me of that), you'll take this deal. Places sell much faster and for more money when people are living there". I explained to him that wasn't true (In fact, the opposite is true) and that I told my client that it wouldn't help her to rent the place out while she was selling it. He told me I was wrong. I said I wasn't. "You are". "I'm not". This went back and forth until I gained my senses and told him "I understand your opinion but we are not going to rent to you. That is final".
There was an odd silence before he said "Well, you are wrong and I work for a news paper and I am going to write an article and tell the world what you are doing". I started laughing. "This article will shine an unfavorable light on you". I was laughing very loud now. I told him (Through my laughter) that we really couldn't rent to him now, due to his character issues. "Character issues? Would you like a letter from a Congressman to vouch for my character?". I could barley get it out when I said "I'll need a letter from a Congressman, a Priest, a Rabbi & a pharmacist". A full minute of me laughing went by before he said "I think you're wrong". I finally hung up, sat down and laughed my butt off.
I called my seller to tell her about the comedy I was just in. She said the guy told her he was with the FBI.
So, watch out. There are loonies out there that will entertain you.
Tell me your funny story in the comment or call me 619-507-7449.
God Bless.
If you own, rent, buy, sell, invest, look at, build on, tear down, or do something else revolving around real estate then you are a target for coo-coo people. Case in point.
I was putting a lockbox on a listing of mine in P.B. when someone asks me "can I help you?". Anytime I'm asked that I feel like just saying "no" and going on about my business. But, I decided not be rude and I introduced myself and told the guy I was the listing agent for this particular dwelling. I shook the guy's dead fish hand and listened to his story of how he was interested in renting the place from my seller (My seller had moved out of state) but he couldn't get a hold of her. He mentioned that my seller did not call him back a couple of times before he asked me for her phone #. "I'm sorry. I can't give it to you. If you want I can relay a message for you" was my uncomfortable reply. I gave him my card and prayed that he would not call.
Within an hour he called me. He started telling me of this great plan he had when I interrupted him and asked him to call me back in 20 minutes. I then tried to get a hold of my seller to ask her if this is a friend of hers so I would know how short with this guy I could be. He called me approx 10 times inside of an hour (Hell no I didn't answer) leaving me one message telling me that I really should answer the phone.
The next day I finally got in touch with my seller and told her of the evil plot going on and that I was against it. She told me that the guy gives her the creeps too (Thank goodness) and that she did NOT want to rent to him. Now I was armed.
I was just about to call my stalker when he called me. I let him state his case. He wanted to rent her place for $2000 a month and give me a $1000 (For que?). He told me "If you're smart (No one ever accused me of that), you'll take this deal. Places sell much faster and for more money when people are living there". I explained to him that wasn't true (In fact, the opposite is true) and that I told my client that it wouldn't help her to rent the place out while she was selling it. He told me I was wrong. I said I wasn't. "You are". "I'm not". This went back and forth until I gained my senses and told him "I understand your opinion but we are not going to rent to you. That is final".
There was an odd silence before he said "Well, you are wrong and I work for a news paper and I am going to write an article and tell the world what you are doing". I started laughing. "This article will shine an unfavorable light on you". I was laughing very loud now. I told him (Through my laughter) that we really couldn't rent to him now, due to his character issues. "Character issues? Would you like a letter from a Congressman to vouch for my character?". I could barley get it out when I said "I'll need a letter from a Congressman, a Priest, a Rabbi & a pharmacist". A full minute of me laughing went by before he said "I think you're wrong". I finally hung up, sat down and laughed my butt off.
I called my seller to tell her about the comedy I was just in. She said the guy told her he was with the FBI.
So, watch out. There are loonies out there that will entertain you.
Tell me your funny story in the comment or call me 619-507-7449.
God Bless.
Sunday, March 21, 2010
I Are Angry
Hello People.
Ever thought "Boy, if I had $400,000 (More or less) I would find a good house priced around......Oh... $430,000, and I would offer them $400,000 and watch their mouths water"? Sounds like a good plan, right? The seller would be nuts to not take your offer. No, appraisal. No loan hassle (There are tons of them). No brainer.
That's what my client and I thought too. After making that offer we we're countered at $425,000. We were also told if we did not close in 14 days (That was the amount of time we offered) the price would jump to $427,000. We countered their counter at $405,000, still feeling like the cash was good. They emailed back (Very coldly I might add) saying they had another offer that they were going to deal with.
I talked to my client and she wanted that home. I emailed the agent back and asked him if $415,000 would work. "That will not work" is what Mr. Sunshine emailed back. We sent him a counter that countered our counter that countered the seller's counter saying $420,000, all cash and any other terms and time lines the seller would like. They took the other offer.
I was (Am) so pissed. My client is heart broken. I am thinking bad thoughts towards the seller and listing agent. The moral of the story is real estate is nuts. No science involved, just people and very often those people are bananas.
Let me know what pisses you off.
God Bless.
Ever thought "Boy, if I had $400,000 (More or less) I would find a good house priced around......Oh... $430,000, and I would offer them $400,000 and watch their mouths water"? Sounds like a good plan, right? The seller would be nuts to not take your offer. No, appraisal. No loan hassle (There are tons of them). No brainer.
That's what my client and I thought too. After making that offer we we're countered at $425,000. We were also told if we did not close in 14 days (That was the amount of time we offered) the price would jump to $427,000. We countered their counter at $405,000, still feeling like the cash was good. They emailed back (Very coldly I might add) saying they had another offer that they were going to deal with.
I talked to my client and she wanted that home. I emailed the agent back and asked him if $415,000 would work. "That will not work" is what Mr. Sunshine emailed back. We sent him a counter that countered our counter that countered the seller's counter saying $420,000, all cash and any other terms and time lines the seller would like. They took the other offer.
I was (Am) so pissed. My client is heart broken. I am thinking bad thoughts towards the seller and listing agent. The moral of the story is real estate is nuts. No science involved, just people and very often those people are bananas.
Let me know what pisses you off.
God Bless.
Friday, March 19, 2010
They Hate Us
People. Hi.
CNN Money just came out with a list of the top 25 cities in the U.S. to have the best home price forecasts. San Diego did not (They hate us for being beautiful) make the list. Matter of fact, they said we were going to Depreciate. They said we were going to loose .3% (That's .oo3. I know you know math, just clarifying) and places like Kennewick & Yakima, Wa, Modesto, Ca (Have you been to Modesto?) and Anchorage, Ak are going to appreciate. The top 25 are projected to appreciate from 6% to 1.6% in 2010.
It breaks down like this: Washington had a whopping 8 cities in the top 25. State growth seems to be the reason (Or some sort of witch craft). Oregon and California came in 2nd with 4 cities. Let's just say California was 2 & Oregon was 3. Alaska, Wyoming & Montana all had 2. Colorado, New York & South Carolina all had a a big 1.
So, us San Diegans are projected to lose .3% of home value in 2010. On a $300,000 home that is $900. Probably not going down much more. If you're waiting on the bottom, you should be pretty darn close.
Click on the title to see the article that shows all of the cities that crushed us.
God Bless.
CNN Money just came out with a list of the top 25 cities in the U.S. to have the best home price forecasts. San Diego did not (They hate us for being beautiful) make the list. Matter of fact, they said we were going to Depreciate. They said we were going to loose .3% (That's .oo3. I know you know math, just clarifying) and places like Kennewick & Yakima, Wa, Modesto, Ca (Have you been to Modesto?) and Anchorage, Ak are going to appreciate. The top 25 are projected to appreciate from 6% to 1.6% in 2010.
It breaks down like this: Washington had a whopping 8 cities in the top 25. State growth seems to be the reason (Or some sort of witch craft). Oregon and California came in 2nd with 4 cities. Let's just say California was 2 & Oregon was 3. Alaska, Wyoming & Montana all had 2. Colorado, New York & South Carolina all had a a big 1.
So, us San Diegans are projected to lose .3% of home value in 2010. On a $300,000 home that is $900. Probably not going down much more. If you're waiting on the bottom, you should be pretty darn close.
Click on the title to see the article that shows all of the cities that crushed us.
God Bless.
Thursday, March 18, 2010
Stupider And Stupider
Hi People.
Here's a story of how dumb the banks are.
Back in '08 I was doing a short sale for a friend who fell on hard times (He's doing much better now, thanks for asking). After months of being on the market we finally got an offer for $975,000 (we were on the market for $1.1M). A little low, but not bad.
We (When I say "we" I mean Brian Calvin who does all of my negotiating with banks on short sales. He has the right kind of temperament for it. I get my feelings hurt way too much when people are too stupid to listen to reason) negotiate back and forth with the banks (There was 2 loans) until we had an agreement with the 1st loan for $980,000 and they give the 2nd loan $3000. The 2nd loan said "jump in a lake, we want $30,000". The 1st loan told them to "go to that same lake and take a long walk on a short pier" (Walking into a lake and jumping into a lake will get the same result) you're only getting $3000.
So, we (You know who I'm talking about) go back and forth with the banks and they both will not budge. That kills the deal. No short sale. The property gets foreclosed on 10/09, about a year after the deal would have been done. The kicker?
Both the 1st and 2nd loans were with National City Mortgage, different departments but the same bank. The real kicker?
The house just went back on the market for $787,500. They lost nearly $200,000 because they could not play nice with themselves. Is it any wonder the banks are in the kind of shape they are in?
Let me know how stupid I am.
God Bless.
Here's a story of how dumb the banks are.
Back in '08 I was doing a short sale for a friend who fell on hard times (He's doing much better now, thanks for asking). After months of being on the market we finally got an offer for $975,000 (we were on the market for $1.1M). A little low, but not bad.
We (When I say "we" I mean Brian Calvin who does all of my negotiating with banks on short sales. He has the right kind of temperament for it. I get my feelings hurt way too much when people are too stupid to listen to reason) negotiate back and forth with the banks (There was 2 loans) until we had an agreement with the 1st loan for $980,000 and they give the 2nd loan $3000. The 2nd loan said "jump in a lake, we want $30,000". The 1st loan told them to "go to that same lake and take a long walk on a short pier" (Walking into a lake and jumping into a lake will get the same result) you're only getting $3000.
So, we (You know who I'm talking about) go back and forth with the banks and they both will not budge. That kills the deal. No short sale. The property gets foreclosed on 10/09, about a year after the deal would have been done. The kicker?
Both the 1st and 2nd loans were with National City Mortgage, different departments but the same bank. The real kicker?
The house just went back on the market for $787,500. They lost nearly $200,000 because they could not play nice with themselves. Is it any wonder the banks are in the kind of shape they are in?
Let me know how stupid I am.
God Bless.
Wednesday, March 17, 2010
Psych!!!
What's up, People?
There's a cruel trick going around. It's kind of like going to the zoo and holding a banana just out of reach of the ape cage. Like taking a kid to the Disneyland parking lot and then going home before entering said amusement park. It is just as mean as a Baskin Robbins commercial on t.v. telling me the most delicious ice cream ever is now free and my wife telling me I can not have any because of some lie my doctor said about me having high cholesterol (I hate my doctor).
This trick going around is perpetrated by Realtors all over the greater San Diego area (Maybe the whole country). Here's how it's laid out. The Realtor takes a listing and puts it on the market under market value. Have you ever heard of anything so horrible? You have heard of things that horrible? You've heard of much worse things? Well, I agree that it's not as bad as my ice cream story. Here's why it does suck.
When a listing comes on the market under value it gives buyers false hope that they could actually end up with the house. Well, why couldn't they? The house is priced in the buyer's price range, right? Yes (Is me talking to myself confusing?), but it will get bid up to actual market price or, if there is enough of a shark frenzy, it could get bid over asking price. It should be easy to spot, right?
Yes, it is easy to spot. The unfortunate thing is you have to pursue it anyway, just in case. Just like that 16 year old kid who has to ask the super model out when he comes in contact with her. You can not let those types of opportunities go by without at least trying.
So, to all of my home buyers (And all of the buyers across the land), keep asking that super model out, no matter how much it hurts. You'll get lucky one day.
Let me know your super model story.
God Bless.
There's a cruel trick going around. It's kind of like going to the zoo and holding a banana just out of reach of the ape cage. Like taking a kid to the Disneyland parking lot and then going home before entering said amusement park. It is just as mean as a Baskin Robbins commercial on t.v. telling me the most delicious ice cream ever is now free and my wife telling me I can not have any because of some lie my doctor said about me having high cholesterol (I hate my doctor).
This trick going around is perpetrated by Realtors all over the greater San Diego area (Maybe the whole country). Here's how it's laid out. The Realtor takes a listing and puts it on the market under market value. Have you ever heard of anything so horrible? You have heard of things that horrible? You've heard of much worse things? Well, I agree that it's not as bad as my ice cream story. Here's why it does suck.
When a listing comes on the market under value it gives buyers false hope that they could actually end up with the house. Well, why couldn't they? The house is priced in the buyer's price range, right? Yes (Is me talking to myself confusing?), but it will get bid up to actual market price or, if there is enough of a shark frenzy, it could get bid over asking price. It should be easy to spot, right?
Yes, it is easy to spot. The unfortunate thing is you have to pursue it anyway, just in case. Just like that 16 year old kid who has to ask the super model out when he comes in contact with her. You can not let those types of opportunities go by without at least trying.
So, to all of my home buyers (And all of the buyers across the land), keep asking that super model out, no matter how much it hurts. You'll get lucky one day.
Let me know your super model story.
God Bless.
Saturday, March 13, 2010
Dumb
Aloha, People.
This is going to sound biased, self serving and kind of mean. But I think some people are dumb. I'm not saying they're bad people. I'm not saying they do not love their families. I'm not even saying they're unintelligent. I'm saying there are some dumb folks out there (Unintelligent would be the inability to learn or reason. Dumb people are just not looking at all of the facts before they open their mouths).
Take, for instance, Chris Farrell of Bloomberg's Business Week magazine. He wrote an article with the point of view that the government should "pull the plug on government support" from the housing industry. That is his opinion, and not a horrible one. There are a ton of people who think the government shouldn't be involved. That's fine. What I think is dumb (It is kind of harsh sounding. What if I just said his idea is dumb and not him?) is his reason for the government to back out.
His reason is he feels that with the government giving tax credits and buying mortgaged back securities (Keeps the interest rates down) is "Artificially holding prices at above-market levels" (Prices are not above market levels. Prices are always at market level. That's why they call it the "market". People buy stuff and the price is set. If people are only willing to pay $1 for a loaf of bread then that's the market). I don't know where he's buying real estate, but there's nothing artificial going on. Home prices are way low. Yes, the tax credit is helping send buyers to the market. But, how many people are buying a $300,000 home to get $8000 tax credit? Yes, interest rates are low.....that is actually helping a bunch. But, the interest rates nor the tax credit are driving prices up. There is a gang of home buying action going on, but prices are not reflective of the demand. Wanna know why?
When a home is up for sale and someone wants to buy it using a loan then the home still has to appraise. It doesn't matter what someone is willing to pay, the appraiser is going to set a price at MARKET value based on comparable home sales. Appraisers and banks are not going to be making the same mistakes they made prior to '05. You remember those days when an appraiser would drive by the home for sale and then ask you how much you wanted it to appraise for. That's part of what got us into this mess.
So, I really am surprised that this article was written and published. The article even mentions that "sales of existing homes plunged 7.2% in January". How is that artificially holding prices up?
Any way, click on the title and read the stupid article yourself. This is what I'm battling, People.
God Bless
This is going to sound biased, self serving and kind of mean. But I think some people are dumb. I'm not saying they're bad people. I'm not saying they do not love their families. I'm not even saying they're unintelligent. I'm saying there are some dumb folks out there (Unintelligent would be the inability to learn or reason. Dumb people are just not looking at all of the facts before they open their mouths).
Take, for instance, Chris Farrell of Bloomberg's Business Week magazine. He wrote an article with the point of view that the government should "pull the plug on government support" from the housing industry. That is his opinion, and not a horrible one. There are a ton of people who think the government shouldn't be involved. That's fine. What I think is dumb (It is kind of harsh sounding. What if I just said his idea is dumb and not him?) is his reason for the government to back out.
His reason is he feels that with the government giving tax credits and buying mortgaged back securities (Keeps the interest rates down) is "Artificially holding prices at above-market levels" (Prices are not above market levels. Prices are always at market level. That's why they call it the "market". People buy stuff and the price is set. If people are only willing to pay $1 for a loaf of bread then that's the market). I don't know where he's buying real estate, but there's nothing artificial going on. Home prices are way low. Yes, the tax credit is helping send buyers to the market. But, how many people are buying a $300,000 home to get $8000 tax credit? Yes, interest rates are low.....that is actually helping a bunch. But, the interest rates nor the tax credit are driving prices up. There is a gang of home buying action going on, but prices are not reflective of the demand. Wanna know why?
When a home is up for sale and someone wants to buy it using a loan then the home still has to appraise. It doesn't matter what someone is willing to pay, the appraiser is going to set a price at MARKET value based on comparable home sales. Appraisers and banks are not going to be making the same mistakes they made prior to '05. You remember those days when an appraiser would drive by the home for sale and then ask you how much you wanted it to appraise for. That's part of what got us into this mess.
So, I really am surprised that this article was written and published. The article even mentions that "sales of existing homes plunged 7.2% in January". How is that artificially holding prices up?
Any way, click on the title and read the stupid article yourself. This is what I'm battling, People.
God Bless
Thursday, March 11, 2010
Contract Tips #1 Or Contingent This
Hi People.
Buyers. This will start off an infrequent series on things to remember when writing a "Residential Purchase Agreement" offer for a home. Sellers. This is what to look out for. The ying and yang, push and pull of negotiating will end up somewhere in the middle called "fair", if both parties are on the ball. One party is often not on his game (Or has a Realtor who was the banjo player in Deliverance) and that party ends up being taken advantage of.
Buyer contingencies. They are there to protect the buyer. Inspection, Loan & Appraisal are the main ones. Inspection is the buyer's right to inspect/ investigate the home, taxes, school district, noise pollution, pollution pollution, area crime and all around niceness. The buyer can hold a seance to check for evil spirits, check the area's demographics or see if the house is Feng whatever. If all of these (But not limited to these) things do not meet the buyer's approval the buyer can back out and get the full refund of the deposit, as long as they are within their contingency period.
Loan and Appraisal Contingencies are tied together and pretty self explanatory. If you can't get the loan or if the home does not appraise you can cancel escrow and get your full deposit back. The longer the buyer's contingency the better for the buyer. Also, you have very little (If any) control over these 2 contingencies. Keep them as long as you can and extend (Before they expire) if the bank/ appraiser need more time.
Obviously, the seller will want as short a buyer's contingency period as possible. When an offer is accepted the seller has to take the property off of the market. Knowing that the buyer can back out legally for something as frivolous as "I don't like the paint at sunset" or "This house makes me look fat" will keep the seller up late at night.
So, what's fair. It depends (Sissy answer). Feel out the situation. If you really want to buy the house and there are several offers on the table maybe you should consider a 10 day inspection period (Plenty of time to get an inspection done if you don't dilly-dally) as opposed to 17 days. This will make you more attractive to the seller. If he doesn't have any other offers and you don't feel like being rushed maybe ask for a 20 day inspection period. He should take it because he's starting to get nervous of never getting an offer or ever being loved. Sad.
People outside of California should consult a local Realtor. Laws, customs and practices can vary state to state.
Either way, call me at 619-507-7449 with any questions on any real estate topic.
God Bless
Buyers. This will start off an infrequent series on things to remember when writing a "Residential Purchase Agreement" offer for a home. Sellers. This is what to look out for. The ying and yang, push and pull of negotiating will end up somewhere in the middle called "fair", if both parties are on the ball. One party is often not on his game (Or has a Realtor who was the banjo player in Deliverance) and that party ends up being taken advantage of.
Buyer contingencies. They are there to protect the buyer. Inspection, Loan & Appraisal are the main ones. Inspection is the buyer's right to inspect/ investigate the home, taxes, school district, noise pollution, pollution pollution, area crime and all around niceness. The buyer can hold a seance to check for evil spirits, check the area's demographics or see if the house is Feng whatever. If all of these (But not limited to these) things do not meet the buyer's approval the buyer can back out and get the full refund of the deposit, as long as they are within their contingency period.
Loan and Appraisal Contingencies are tied together and pretty self explanatory. If you can't get the loan or if the home does not appraise you can cancel escrow and get your full deposit back. The longer the buyer's contingency the better for the buyer. Also, you have very little (If any) control over these 2 contingencies. Keep them as long as you can and extend (Before they expire) if the bank/ appraiser need more time.
Obviously, the seller will want as short a buyer's contingency period as possible. When an offer is accepted the seller has to take the property off of the market. Knowing that the buyer can back out legally for something as frivolous as "I don't like the paint at sunset" or "This house makes me look fat" will keep the seller up late at night.
So, what's fair. It depends (Sissy answer). Feel out the situation. If you really want to buy the house and there are several offers on the table maybe you should consider a 10 day inspection period (Plenty of time to get an inspection done if you don't dilly-dally) as opposed to 17 days. This will make you more attractive to the seller. If he doesn't have any other offers and you don't feel like being rushed maybe ask for a 20 day inspection period. He should take it because he's starting to get nervous of never getting an offer or ever being loved. Sad.
People outside of California should consult a local Realtor. Laws, customs and practices can vary state to state.
Either way, call me at 619-507-7449 with any questions on any real estate topic.
God Bless
Tuesday, March 9, 2010
Housing Market & Corn Farmers
People (You can't see me but I'm tipping my hat to you as if we were greeting each other).
Forbes came out with a pretty bold statement today "Here's a new sign that the housing market is in recovery mode: The number of homes for sale across the U.S. with discounted asking prices dipped to fewer than 20% on March 1". This is great news. But, once again, I think we need to dig a little deeper.
One reason there could be (Has not been verified) less discounts is that builders have caught up to the market prices. The new stuff on the market now has been built with the current market in mind. The builder who started building in '05 and finished in '07 was stuck with a $500,000 home that was only worth $350,000. He had to discount it in order to sell it. The builder who started building in '07 & '08 are building for $300,000 homes and do not have to discount them to get rid of them. Catch my drift?
The other reason they don't have to discount their homes is Uncle Sam is giving money (8000 big ones) to first time home buyers (Biggest portion of buyers out there). That's a built in discount. Kind of like subsidizing the corn farmers. Just grow it and the government will help you out (If I have offended any corn farmers out there I apologize. I didn't think you could read).
Again, this is good news. But let's not strike up the band just yet. There's a lot of corn to grow.
Tell me I'm full of it after you read the attached article (Click on the title).
God Bless.
Forbes came out with a pretty bold statement today "Here's a new sign that the housing market is in recovery mode: The number of homes for sale across the U.S. with discounted asking prices dipped to fewer than 20% on March 1". This is great news. But, once again, I think we need to dig a little deeper.
One reason there could be (Has not been verified) less discounts is that builders have caught up to the market prices. The new stuff on the market now has been built with the current market in mind. The builder who started building in '05 and finished in '07 was stuck with a $500,000 home that was only worth $350,000. He had to discount it in order to sell it. The builder who started building in '07 & '08 are building for $300,000 homes and do not have to discount them to get rid of them. Catch my drift?
The other reason they don't have to discount their homes is Uncle Sam is giving money (8000 big ones) to first time home buyers (Biggest portion of buyers out there). That's a built in discount. Kind of like subsidizing the corn farmers. Just grow it and the government will help you out (If I have offended any corn farmers out there I apologize. I didn't think you could read).
Again, this is good news. But let's not strike up the band just yet. There's a lot of corn to grow.
Tell me I'm full of it after you read the attached article (Click on the title).
God Bless.
Sunday, March 7, 2010
Always Have Protection
People. How do?
The California Board of Realtors are coming out with a new revision for the "Residential Purchase Agreement And Escrow Instructions" or Form RPA-CA. What does this mean to you? Not a whole lot. It does clarify the wording a tad better on some parts re loan and appraisal contingencies. It does explain that if you change financing in the middle of the escrow period than the seller has the right to "VETO" or accept. It illuminates what does, and what doesn't stay with the house (Ceiling fan with one blade), unless there is added verbiage to the contract to correct that (You can have the ceiling fan, but I keep the fuzzy toilet seat). It clarifies some other things to, but all of these things were in the old contract (My clients and I knew they were clear).
The big things that the new contract changes are there to protect the realtor, not the buyer/ seller Buyers and sellers don't pay dues to the board of Realtors. If CAR keeps more Realtors in business then they can make more money. A little cynical.). It moved some wording up front telling the buyer that the realtor is allowed to write offers with other buyers on the same house. Now, the realtor is not allowed to share how much you offered or anything about you. He's just allowed to write offers for "Potentially competing buyers". Nice for him, not for you.
They re-worded how the deposit (Earnest money) is to be handled. This has been a long time coming. Now it states that the buyer will take the deposit directly to escrow 3 days after the offer is accepted. This is to protect the realtor from him (Sexist) self. The #1 way Realtors/ brokers get in trouble is co-mingling funds. Taking deposits and mixing it in with whatever fund (Gambling, drugs, figurines, etc...). I used to write it in that way so I wouldn't have to hold someone else's money. My wife won't even let me have money, how am I supposed to take care of someone else's money.
The point of all of this is is that you better employ professionals who have your back when you are dealing with real estate, money, health and whatever else is valuable to you.
Let me know if you want a copy of the new contract. 619-507-7449.
God Bless.
The California Board of Realtors are coming out with a new revision for the "Residential Purchase Agreement And Escrow Instructions" or Form RPA-CA. What does this mean to you? Not a whole lot. It does clarify the wording a tad better on some parts re loan and appraisal contingencies. It does explain that if you change financing in the middle of the escrow period than the seller has the right to "VETO" or accept. It illuminates what does, and what doesn't stay with the house (Ceiling fan with one blade), unless there is added verbiage to the contract to correct that (You can have the ceiling fan, but I keep the fuzzy toilet seat). It clarifies some other things to, but all of these things were in the old contract (My clients and I knew they were clear).
The big things that the new contract changes are there to protect the realtor, not the buyer/ seller Buyers and sellers don't pay dues to the board of Realtors. If CAR keeps more Realtors in business then they can make more money. A little cynical.). It moved some wording up front telling the buyer that the realtor is allowed to write offers with other buyers on the same house. Now, the realtor is not allowed to share how much you offered or anything about you. He's just allowed to write offers for "Potentially competing buyers". Nice for him, not for you.
They re-worded how the deposit (Earnest money) is to be handled. This has been a long time coming. Now it states that the buyer will take the deposit directly to escrow 3 days after the offer is accepted. This is to protect the realtor from him (Sexist) self. The #1 way Realtors/ brokers get in trouble is co-mingling funds. Taking deposits and mixing it in with whatever fund (Gambling, drugs, figurines, etc...). I used to write it in that way so I wouldn't have to hold someone else's money. My wife won't even let me have money, how am I supposed to take care of someone else's money.
The point of all of this is is that you better employ professionals who have your back when you are dealing with real estate, money, health and whatever else is valuable to you.
Let me know if you want a copy of the new contract. 619-507-7449.
God Bless.
Thursday, March 4, 2010
Should I Stay Or Should I Go?
Cheers, People.
Interest rates dropped a whopping .08 percent from 5.05 to 4.97. They dropped like my jaw when my 2 year old spit out the "F" word. This comes 4 weeks before ugliness could come, or not.
"The central bank's $1.25 trillion program to buy up mortgage securities is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens" says MSNBC.
The Fed, and a couple of economists (Namely Sven Jari Stehn of Goldman Sachs. Are we supposed to trust them? I honestly can't remember.) thinks that the end of this program won't disturb the interest rate waters too much. Other economists say interest rates will shoot up like my cholesterol at a fried chicken eating contest.
The fact is that we wont know until we know. Still, if the Fed does extend the program than rates will stay low, probably.
Click on the link for the full article.
God Bless.
Interest rates dropped a whopping .08 percent from 5.05 to 4.97. They dropped like my jaw when my 2 year old spit out the "F" word. This comes 4 weeks before ugliness could come, or not.
"The central bank's $1.25 trillion program to buy up mortgage securities is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens" says MSNBC.
The Fed, and a couple of economists (Namely Sven Jari Stehn of Goldman Sachs. Are we supposed to trust them? I honestly can't remember.) thinks that the end of this program won't disturb the interest rate waters too much. Other economists say interest rates will shoot up like my cholesterol at a fried chicken eating contest.
The fact is that we wont know until we know. Still, if the Fed does extend the program than rates will stay low, probably.
Click on the link for the full article.
God Bless.
Tuesday, March 2, 2010
Show Me The Money
People, greetings.
Poway just made a list of the top 10 cities "Where Home Prices Are Rising", says the well renowned Forbes Magazine. It also claims that the year over year price change has went up 27%. It has, but what do they mean by price? Do they mean how much homes sold for? Nope.
They are basing this 27% jump on median home ASKING price (Why the yelling?). That has nothing to do with sells. Who wants to buy my '78 Pinto with a missing hub cap and duct tape pin stripes? I'm ASKING (Again with the yelling) $20,000. If you don't want that my neighbor has a primer gray Ford Escort with 200,000 miles on it and a missing door. He can be talked down to $18,000.
The median home asking price (No need to yell) in Poway is a little over $864,000. That is what's active right now. If so inclined, you may buy one of these homes. The total # of single family detached homes actively on the market is 144. 96 of them are over $700,000 (Close enough to the median price). But, only 11 homes over $700,000 sold in the last 3 months. Those homes took an average of 100 days to sell (That does not count the handful of those that tried to sell earlier and re-listed). Do you see what I'm getting at? That 27% increase in asking price does not matter.
Now, in all defense of Forbes, it does go on to say that a big part of the increase in homes for sale is that all of the less expensive homes get sold quick. But, it still sees these price increases as a turn around in the housing market. It could be, but those homes have to sell at those prices. Other wise, who wants to buy my Pinto (real cherry!)?
By the way, Poway is a great area. Great public schools (Score the best in the county), nice neighborhoods, usually bigger lots. I have put a bunch of my clients in Poway and they all love it (So why am i being a jerk?).
Click on the link to read the Forbes' article.
God Bless.
Poway just made a list of the top 10 cities "Where Home Prices Are Rising", says the well renowned Forbes Magazine. It also claims that the year over year price change has went up 27%. It has, but what do they mean by price? Do they mean how much homes sold for? Nope.
They are basing this 27% jump on median home ASKING price (Why the yelling?). That has nothing to do with sells. Who wants to buy my '78 Pinto with a missing hub cap and duct tape pin stripes? I'm ASKING (Again with the yelling) $20,000. If you don't want that my neighbor has a primer gray Ford Escort with 200,000 miles on it and a missing door. He can be talked down to $18,000.
The median home asking price (No need to yell) in Poway is a little over $864,000. That is what's active right now. If so inclined, you may buy one of these homes. The total # of single family detached homes actively on the market is 144. 96 of them are over $700,000 (Close enough to the median price). But, only 11 homes over $700,000 sold in the last 3 months. Those homes took an average of 100 days to sell (That does not count the handful of those that tried to sell earlier and re-listed). Do you see what I'm getting at? That 27% increase in asking price does not matter.
Now, in all defense of Forbes, it does go on to say that a big part of the increase in homes for sale is that all of the less expensive homes get sold quick. But, it still sees these price increases as a turn around in the housing market. It could be, but those homes have to sell at those prices. Other wise, who wants to buy my Pinto (real cherry!)?
By the way, Poway is a great area. Great public schools (Score the best in the county), nice neighborhoods, usually bigger lots. I have put a bunch of my clients in Poway and they all love it (So why am i being a jerk?).
Click on the link to read the Forbes' article.
God Bless.
Monday, March 1, 2010
No One Wants $6500
Que Pasa People?
The $6500 tax credit is very lonely. Just like an ugly high schooler at the dance or the kid with no skills at the playground, the tax credit is abandoned. Deserted and isolated, the poor tax credit is kicked to the curb.
The Fed added a tax credit last year (Trying to "piggy back" on the tax credit for first time buyers) to try to entice current homeowners to sell their home and buy a new one. This tax credit was put into place to try to bolster the housing market. It did not. Like the fugly 11th grader or the uncoordinated kid, the tax credit begins a life of on line Dungeons and Dragons (Or whatever nerds are playing now).
The reason no one wants the $6500 tax credit is that it has too much baggage (Just like your ex who blames you for something in their past but he/ she couldn't talk about. Or how he/ she threw loud fits in public. Or how they ...fill in the blank, aren't you glad you escaped?).
1/3 of the homes with loans in the U.S. of A. are upside down on their mortgage. They can not step up, only out (Clever?). A big slice of those people will be future foreclosures or short sales. If you remove 1/3 out of anything it will come down, except my cholesterol. Apparently, I have have an endless supply.
There is 10% unemployment in this great country of ours. Some of them will be in the same bunch as the upside down group, but some of them won't (So there). It ain't '05. You can't get a loan without a job (Even a gangster loan shark will need proof you can pay him back. Breaking your legs is fun, but he won't get his money).
$6500 isn't enough to make an American jump through the housing hoop. Don't get me wrong, I like $6500, but I wouldn't spend $40,000+ to get it. Say your house would sell at $325,000. Your closing costs (remember you pay the realtor commission as the seller) would be approx $26,000. Now lets say you bought a house for $325,000 (Why not just stay in the house you had?). You get an FHA loan with a 3.5% down payment, or $11,375. You're already at $37,375 and you haven't paid for appraisal or an inspection or you closing costs. also, your loan amount is higher than if you would have just stayed put. That's a kick in your Louisiana!
The Fed seems like it is trying to come up with programs to help the economy. They're just not that well thought out.
Click on the title and tell me how stupid I am.
God Bless.
The $6500 tax credit is very lonely. Just like an ugly high schooler at the dance or the kid with no skills at the playground, the tax credit is abandoned. Deserted and isolated, the poor tax credit is kicked to the curb.
The Fed added a tax credit last year (Trying to "piggy back" on the tax credit for first time buyers) to try to entice current homeowners to sell their home and buy a new one. This tax credit was put into place to try to bolster the housing market. It did not. Like the fugly 11th grader or the uncoordinated kid, the tax credit begins a life of on line Dungeons and Dragons (Or whatever nerds are playing now).
The reason no one wants the $6500 tax credit is that it has too much baggage (Just like your ex who blames you for something in their past but he/ she couldn't talk about. Or how he/ she threw loud fits in public. Or how they ...fill in the blank, aren't you glad you escaped?).
1/3 of the homes with loans in the U.S. of A. are upside down on their mortgage. They can not step up, only out (Clever?). A big slice of those people will be future foreclosures or short sales. If you remove 1/3 out of anything it will come down, except my cholesterol. Apparently, I have have an endless supply.
There is 10% unemployment in this great country of ours. Some of them will be in the same bunch as the upside down group, but some of them won't (So there). It ain't '05. You can't get a loan without a job (Even a gangster loan shark will need proof you can pay him back. Breaking your legs is fun, but he won't get his money).
$6500 isn't enough to make an American jump through the housing hoop. Don't get me wrong, I like $6500, but I wouldn't spend $40,000+ to get it. Say your house would sell at $325,000. Your closing costs (remember you pay the realtor commission as the seller) would be approx $26,000. Now lets say you bought a house for $325,000 (Why not just stay in the house you had?). You get an FHA loan with a 3.5% down payment, or $11,375. You're already at $37,375 and you haven't paid for appraisal or an inspection or you closing costs. also, your loan amount is higher than if you would have just stayed put. That's a kick in your Louisiana!
The Fed seems like it is trying to come up with programs to help the economy. They're just not that well thought out.
Click on the title and tell me how stupid I am.
God Bless.
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