Truth About Short Sales & Foreclosures For Buyer's

Nowadays everybody is asking for a deal. Of course that makes sense, that is the name of the game right, buy low and sell high. Usually this ends up in a conversation regarding what they heard on the news about short sales or foreclosures. There is a lot of misinformation out there and confusion with regards to the difference, and specifically what is a short sale. Let me explain: Short Sale -- This is a sale in which the seller tries to get the bank to accept less than is owed on the loan. This is happening quite a bit currently, due to the combination of both people unable to pay their mortgage payments and the recent decline in home values. People are damaging their credit in order to essentially jump ship. As a buyer, one must be aware of the process, as well as be very patient. When you see a new listing on the market that is a short sale, usually that means that the price is not yet approved by the lender. In many instances, they have not even begun the short sale process, and will not until they receive their first offer. What I mean by being aware is that even if you offer exactly what the seller is asking, that does not necessarily mean the bank will approve that number--know that going in. Also, even if they do approve it, the process at the bank could take month's, so one must be flexible and patient. I have been in several short sale deals that took a very long time, and my buyer ended up purchasing something else, while waiting for a response. This is an important point also; I always include a short sale addendum with the purchase offer, which states that none of the contingency time lines, exchange of money, etc will happen until the bank has approved the price and then we will open up escrow. That is important.

Foreclosure-- This is a sale in which the bank is the actual owner of the property. The former owner could not make the payments any longer and the bank foreclosed on the owner and took the property back. This can be a much smoother and straight forward deal.

Please note that in most cases in either type of sale, the bank is not likely to make any repairs or provide any credits for repairs. They are losing money, so don't want to shell out anymore.

There are opportunities out there for foreclosures, short sales, as well as regular sales. I have several buyer client's recognizing this, and able to take advantage, and are getting some truly great deals. Speak to your real estate agent, go in with the facts on each property, and get yourself a deal that you can profit from when the market rebounds; not to mention, a home to enjoy in the interim.

Modern on Moore Master Bedroom

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3951434158[/flickr] As soon as you enter the room from the hallway, one is drawn to the explosive views shining through the floor to ceiling windows that open out onto the private outdoor oasis off the bedroom. Intelligent design abound in this one, as the designer/builder used the outside to draw one in. Attention to detail is also evident, as the wood beam is painted red to compliment the outside of the home. The room has two walk in closets ideal for shopaholics. A romantic fireplace is the center of the indoor sitting area and compliments the surroundings perfectly. A true escape from the hustle and bustle but just minutes to all the city amenities one could want, as well as the beach. The views are of the towers on the sand in Marina Del Rey, the hillsides of Culver Crest, and more.

Designer Baths on Moore

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3950656539[/flickr] The master bathroom is the picture shown, but all four of the bathrooms are designer grade. They feature toto & grohe fixturing, and are done in impeccable style. The master has a rain shower head and looks out the window to relaxing greenery. Large spaces allow comfort while getting ready, and all have back lights on the mirrors. Feel like you are at the spa everyday while at home.

Modern on Moore Kitchen

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3951433682[/flickr] Professional grade quality kitchen with nothing but the top tier appliances. These include, Viking range, Bosch dishwasher, and sub zero built in refrigerator. The huge island is a gathering spot for family and entertaining, and is the focal point of the room with it's exquisite quartz counter tops that have been painstakingly matched to perfection. Never far from the social scene when one is in the kitchen, due to it's open layout connecting it with the dining and living room. Feel like a chef in this kitchen day in and day out.

Modern on Moore Living Room

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3950655851/[/flickr] Ideal open floor plan create a sense of wide open space in this modern living/dining room/kitchen combo room. The 11' ceilings add volume to the already large space, as floor to ceiling windows allow an abundance of natural light and look out onto peaceful views. Flooring is rich Brazilian wood throughout the downstairs area. Stunning fireplace with rare stonework compliments the room. Owner has outfitted the room with high end B&B Italia furniture.

Real Estate is On Sale--Take Advantage

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3951434578[/flickr]While the economy is unquestionably down from where it was two plus years ago when the real estate market was ablaze, those prices that homes were selling at is like a glimpse into the future. Will the prices never get back to those numbers? Come on, never is an awfully long time. During every generation there have been concerns that housing has it it's peak, and couldn't possibly continue to rise. In fact, I have a book that lists about twenty quotes from so called financial "experts" dating from 1947 to 2005, all of which state something to the effect of real estate is no longer a good investment and prices couldn't possibly go any higher. One for example is from Harvard Economist Gregory Mankiw in the Journal of Regional Economics in the Fall of 1989; "The baby boomers are all housed now. They are being followed by the baby bust. By 2005, real housing prices will sit 40 percent below where they are today." Think about that for a second, while this guy was predicting housing will go down 40%, it actually rose over 44%! Imagine the individuals that were thinking to themselves in 1989 that this can't be right and bought a house. They made money, real money. There were wealthy investors scooping up properties, knowing full well that essentially the market was on sale, and the economy will stabilize, and prices will rise again.

We are at that point again, I believe. One can scoop up amazing values currently, coupled with historically low interest rates, makes this one of the most attractive times to buy in modern times. There are all cash buyer's gobbling up properties right now, and it may be wise to follow their lead, and get a stake in the game at whatever level you can. I have recently heard about an investment group pooling resources to buy all the architectural homes near the beach they can that were worth $2.3M two years ago and are now being sold at $1.8M. They are planning on holding for 5 years, renting them out in the interim, and then selling at a profit. The simple fact is that there is no more Earth being built, and currently real estate is on sale--take advantage!

Modern Architecture @ It's Finest

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3950655851[/flickr]I have always been a fan of great architecture. It is like living in a work of art, and is designed to enhance one's life. Take this listing on a hilltop neighboring Venice; it has nothing but the highest level of finishes, soaring ceilings adding volume, and a wide open ideal floor plan. It is my opinion that great design adds value. One can not use the standard dollars per sq. ft in analyzing these one of a kind special properties, as they are just that--special. There is a finite amount of truly good architectural properties relative to the housing availability as a whole. One must be careful however; as when the market was hot, everybody was looking to fix & flip properties or build for spec. It is these spec builders that often cut corners to minimize costs and maximize profits, which is certainly understandable, but it is those projects that make truly great design and attention to detail that much more in demand. This property in it's entirety can be seen at http://modernonmoore.com, and was built by a noteworthy builder/designer for himself and his family, and therefore, was built to the highest standards.

Home Prices vs. Cost of Financing

An article came out today by Fiserv, a financial information and analysis firm, predicting housing prices would fall nationally 11.3% by June 30th, 2010. This may or may not be correct, as my crystal ball is fuzzy today; however, I would like to point out a few things to clear up the picture for the person who may be on the fence of whether to purchase now or later. 1. The Fiserv article speaks to an average around the United States. We all know that real estate is about location; thus, can be extremely different from city to city--even neighborhood to neighborhood within a given city for that matter. Los Angeles real estate is much different then Detroit for instance.

2. Areas where there was tremendous investor speculation (ie Miami, Las Vegas, & Phoenix) will be hit the hardest and bring down the national averages, where some cities prices may be rising, albeit at a small clip.

3. Interest rates are hovering at near historic lows currently, and can't stay there forever.

I would like to focus on the last point for a moment, as it is key. I was watching CNN's business correspondent, Ali Velshi, this morning, and I believe he hit the nail on the head. He made the point that should prices slide 11% but interest rates rise just 2%, one would actually end up paying more for the property. Let's use $500,000 as an example. If one were to purchase a $500,000 property now at 5.5%, the interest on a monthly payment would be $2,291.67 (there are other costs involved like property taxes, etc). Now let's say that Fiserv is right and the property is worth $445,000 a year from now, but the interest rate rises to 7.5%, as many economists think it will, one's interest payment is $2,781.25. This is a difference of over $5,800/yr! The beauty is one can lock in the historical low interest rates that are currently available for 30 years.

A home purchase is the largest investment most of us will ever make, and I do not take it lightly. All I am saying is to not only focus on the media reports, as they are not always talking about your area. Also, remember that statistics can be skewed, so delve deeper into the numbers in order to come to the right decision for you and your family. The goal is always to buy low and sell high, but the actual costs associated with the purchase must be factored in.

Marketing Real Estate Outside The Box

I currently have two listings with special instructions (ie limitations) for me to follow while marketing my client's properties. The instructions are as follows: no signs, no open houses, not putting it on the MLS, and not sending just listed flyers in the immediate area; all of which are staples among real estate brokers. One listing is almost $2,000,000, so is clearly a large deal and a top priority. It is this listing that I have been racking my brain, and doing every possible thing I can think of to get the proverbial word out about this dynamic home. To date, I have put it all over the internet (on probably 10 + sites at this point), posted it daily on craigslist, contacted every potential buyer/associate I know that may be interested or know of anyone who may be, as well as essentially created my own MLS. The client did not want it officially listed, but what I have done is search for every agent with a listing over $1M in Mar Vista, Venice, Santa Monica, and Marina Del Rey, and sent them the listing directly. The MLS is basically an easy way to alert other agents of new listings, which is exactly what I am trying to do; albeit in a much more time consuming fashion. I always try and follow my client's preferences of course, but also need to get the job done at the same time.

It is this outside of the box thinking, and aggressive online marketing, that is leading the way to closed sales currently. Experience is great don't get me wrong, but many older agent's have become lazy and accustomed to properties closing quickly with minimal marketing while the market was at it's peak, which doesn't really work anymore. This is the benefits to a young and hungry real estate professional, who is connected to the places where the modern buyer is looking.

Hip Venice adj Condo (In Escrow)

NOT A REO or SHORT SALE. HIP CONDO JUST MINUTES TO THE BEACH,IN GREAT VENICE ADJ. NEIGHBORHOOD. THIS UNIT FEATURES MODERN OPEN FLOOR PLAN, BEAUTIFUL BAMBOO WOOD FLOORING, & A GOURMET KITCHEN W/ GRANITE COUNTERTOPS & STAINLESS STEEL APPLIANCES. FURTHER ADDING TO IT’S APPEAL IS A LUXURY BATH CONTAINING TRAVERTINE STONEWORK IN SHOWER, A CLOSET ORGANIZER, & DESIGNER PAINT THROUGHOUT THE UNIT. VERY LIGHT & BRIGHT–GREAT BUYER’S OPPORTUNITY IN THE ALWAYS DESIRABLE WESTSIDE. SHOWS LIKE A MODEL. Offered @ $335,000. View the full property here

EVO #1810 Lease

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3931599805/[/flickr] Amazing 2 bedroom/2 bath loft available for lease at downtown's newest and nicest high rise building, EVO. Lying just around the corner from the Staples Center & new LA Live in downtown's best neighborhood, South Park; is this stunning new loft with designer finishes and out of this world views. Property is on the 18th floor with floor to ceiling windows and a huge balcony overlooking LA. Property itself features rich wood flooring throughout, designer kitchen with all new stainless steel appliances, spa like bathrooms, and an ideal open floor plan. Building features some of the nicest community areas in any building; including huge sunny pool area, and rooftop lounge. List price includes all basic utilities as well! Offered @ $3,000/mo Click here for more images...

Monte Verde Estates

[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3931945503/[/flickr]Beautiful home in Monte Verde estates backing up to the golf course. Gorgeous yard with sparkling pool and water fall. Old world hardwood floors throughout. Lush landscaping loggia surrounds the back of the home, outdoor cooking area, fab foyer with massive skylight, cooks gourmet kitchen, master retreat with sitting room,balcony off of the suite, 2 walk in closets, built ins, attention to detail!!!