Why contractors should NOT attend open houses when they've done the work on that house's flip

...Because they will be snagging all the open house guests to show them all the cool new plastic face plates they've put over the electric outlets. Contractor/investors, forget what you've seen on HGtv's Flip or Flop.  Let the potential buyers discover the house's ambience, not the $1.75 parts, on their own.

New interest rates and new r.e. stats

Yes, interest rates went up this week.  Again.  Conforming loan rates are now hovering around 4.2%-4.3%. The lenders that I've spoken with don't expect them to go down much in the near future, if at all.  They are still at historic lows, but that probably doesn't make you feel much better if you're a buyer.

And here are some interesting local stats from California Association of Realtors:

- From 2001 - 2007, all-cash purchases were about 6.2%-8.4% of total sales,

- In April 2013, all cash purchases were 29.3% of total sales,

- 27% of California sales are to non-U.S. citizens,

- 66% of investor buyers are holding for the long term,

- 75% plan to hold for about 6 years,

- 25% are flippers,

- 67% investors are paying cash,

- For those who sell, the return on investment is around 14%,

- 78% of investor purchases were single family homes,

- 14% were multi-family homes.

Will this all change? Of course.  When? I don't know.  But the real estate market has really surprised all of us with its quick turn arounds in the last few years.

6212 Auckland, North Hollywood closed yesterday

6212 Auckland in North Hollywood closed yesterday.  I represented the buyers and it was a very smooth transaction.  This house had been flipped by a group of professional flippers who were really great to deal with.  Seriously!  And of course, the stalwart Dana Dukelow at Prospect Mortgage was wonderful, as always.

Here's what was different about this transaction.  For the first time ever, I never once spoke to the listing agent.  I only talked with his staff.  And again for the first time ever, I never once spoke with the escrow officer either, although she did leave me a voicemail when the transaction closed.  Why? In the harsh economic climate, we're seeing many companies consolidate (if they remain in business at all).  These companies need to do a high volume of business to survive.  And alas, a high volume business and high-touch customer service don't usually go together.  I predict that we will see more consolidation in the industry, however.

Thanks for nothing, Flipper!

As I've said before, flippers are back.  My recent experience has been that they are corporations or LLCs with serious cash, and they purchase properties sight-unseen at auctions.  And then put them right back on the market.  No due diligence, no fixing, nada.

My clients just made an offer on a darling condo in the Portofino complex in Pacoima that was owned by a corporate flipper.  But we learned from the Homeowners Association management company that over 24% of the residents there are delinquent in their HOA dues.  This percentage is way too high for my buyers' lender, or any other lender, in fact. The buyers will not be able to get a conventional loan and I don't know anyone who will be able to do so.  And I was the one to tell the corporate flip agent about it.  He hadn't seen the unit and had not researched the complex  I know these folks want to make a quick buck, but c'mon, people!  This takes no time at all to figure these kinds of things out and will save us all a lot of time and trouble!

Don't flip this house

As has been reported here and elsewhere, the flippers are back. And these aren't the moms and pops who watch a lot of HGtv. These are the hardcore investors who buy properties for all cash at sheriffs' sales, run crews of workers through the house, and put them back on the market a month later for $100k profit. This past summer, I had a very good experience with a pro flipper of a house in North Hollwood.

It seems the fast, cheap and out of control pro flippers are back, too. This past week I've seen two of the sloppier, cheaper flips of the year. Yes, they have nice coats of paint and granite counter tops but, uh, hey the heater hasn't worked in years. They couldn't be bothered to replace funky old windows, scrape ceilings, strap water heaters, or make sure that kitchen cabinets don't bump into appliances when they're opened, among other things. Do they think that potential home buyers don't notice? Yes, when a buyer is initially dazzled by a house, they may over look things. But then there's this little inspection period, see? where the buyer is looking for reasons to walk. And during that period, we'll notice everything. Advice: flippers, do it all the way or don't do it at all.