Busy week in the home buying and selling world

It's been kind of a crazy week, and I know you all love the dirt, so here goes: First, I'll soon have a gorgeous, almost entirely brand-new home in Toluca Lake on the market. It's about 3,000 sf and will list for $1,297,000. We are working on staging now with pictures to come and then I'll have all the info here.

1429 N. Rose, Burbank is in escrow and all is going well, so far, there. The buyer just did her home inspection yesterday, the pest inspection was today, etc. This won't close until the end of October. By the way, the two cats (pictured above) that live at Rose now need to be rehomed. They are twin black and white kitties, about four years old, can live inside/outside or both, and are very sweet. They were born in Brazil and can meow in Portuguese! Any takers?

Next, there's the Ben Mar home in Burbank. That has NOT been a fun transaction so far. I will have a long post about this baby when it closes. For right now, I can tell you that the buyers and I celebrated the removal of all contingencies last night at Bow and Truss in NoHo.

Then there's the short sale condo in West Hollywood. Jeez, as if short sales weren't bad enough...when a condo is sold, both the buyer and the buyer's lender need to look at the home owners association's financial and governing documents. And getting the HOA documents in a timely manner is ALWAYS iffy. In this case, it's been an extra hard tooth-pull. And we learned that there is litigation against the home owners association from a disgruntled former resident. That's a red flag to the lender. At any rate, it's been one of those 50-emails-a-day transactions this week for me and everybody else concerned and I hope to have this sailing smoothly early next week.

Enjoy your weekend, everybody!

Why foreclosure reform might be a good thing

This property is 10633 Chiquita in the Universal City area of Toluca Lake.  I sold this to Carlos and Elaine back in 2007 for $867k.  It had been extensively remodeled and was gorgeous.  Unfortunately, Carlos and Elaine fell on hard times (didn't everybody?) and attempted to modify their loan last year.  RCS, the servicer, gave them the run-around.  At the beginning of this year, just as the owners began to consider the short sale process, the lien holders foreclosed on the owners.

And then turned around and sold it to an investor for $440,000, stating that it was a 2+1 instead of a 3+3.

But somehow, before that, RCS couldn't be bothered to reduce the interest rate for Carlos and Elaine even a little bit, let alone write down principal.  Or give them time to short sale it.

Why not? If the lien holders were willing to take such a big hit, for way under market value, why couldn't they modify the original loan? Your guess is as good as mine.

Something is really, really wrong here.

By the way, the house is back on the market now in the mid-$500's and the listing agent (and I) think it will go for the mid-$600's.  That's a tidy little profit for the current owner.

Unvarnished truth in real estate advertising? We gots it.

Need a 3000+ sf short sale home in Sherman Oaks for $602,000? Check out the listing agent's text for this new listing on Meadville (unedited): The house has major foundation issues with mold. No warranties are giving. Buyer to hire a general contractor and mold company. There are cracks in the foundation with 3 to 4 inches off the back of the house. No termite report or termite completion. The retaining wall has major issues with water running into the back of the house. Part of the house in not in liable condition. Buyer to be aware of dog in backyard.Please be aware there is freeway noise. The seller holds a valid CA Real Estate. Their was additional structural damaged found after buyer inspection. The pool does not work or in operating condition. A lot of draining issues with leaking roof. If you are LOOKING FOR A HOUSE WITH MAJOR DAMAGE YOU FOUND IT. The retaining wall is worse condition then expected.
Such candor is kind of refreshing, no? Yes, that's the best picture, above. How long do you think it will take it to go pending?

What does the government/big bank foreclosure settlement mean to you? Well, perhaps a write-down in principal

We've all seen the headlines about the government settlement with the big banks, but what does it really mean? Check out this article from the Washington Post:
http://www.washingtonpost.com/blogs/where-we-live/post/what-does-the-foreclosure-settlement-mean-for-you/2012/02/09/gIQAxE9U1Q_blog.html
This is so new that these are the only details that I have, but it looks like -- don't get excited yet -- these five banks have agreed to PRINCIPAL reduction if you're underwater!!! I'm sure the devil is in the details, but...

In the meantime, here in our land, expect inventory to get even shorter as a lot of short sales may be cancelled because of this.

Yet more info on Southland property flippers

I've been posting about flipped properties lately, and here's more info and statistics about that very thing from today's L.A. Times.  The short of it: investors, most of whom are likely property flippers, are crowding the low end of the market.  The title should link; if not, click here.  Some salient quotes:

"The one thing that is certainly true at the moment — because rents are rising and house prices are flat or falling — is yields on houses are pretty good right now," said Richard Green, director of the USC Lusk Center for Real Estate. "It creates a problem for ordinary people, because a lot of investors are buying with cash, and so cash buyers can buy for less money." So if it seems like there are no inexpensive homes on the market, that's why.

And "...buyers who paid all cash purchased 29% of all Southland homes in December." Statistically, many of those cash sales were in the middle- and high-price catagories, too.  I am constantly amazed by how much cash is out there.

And, perhaps the most important stat of all: "Nearly 1 in 3 homes sold last month on the resale market was a foreclosure and about 1 in 5 was a short sale."

The article also discusses price declines in December, but that usually happens at the end of the year.  My take-away is good and bad.  Obviously, even though there should be great deals on properties out there, the competition for true bargains in all price catagories is fierce and cash is king.  The good news for regular buyers is that many/most of these investors are doing some very nice rehabbing of properties.  They are spending their cash on the fixes needed so you can spend yours on your mortgage -- and tax deduction.

I think I need to start going to foreclosure auctions.

In your opinion, what was the best and worst real estate trend of the year?

Friends and fans, what did you think about real estate this year? Short sales and foreclosures: too much, not enough? Real estate prices: too high or too low or just right? Real estate agents: too many, too few, too dumb? The real estate market in general: good, bad or indifferent?  I'll post my bests and worsts in the next few days.

The short sale on Verdugo in Burbank has closed, and my nightmare is over.

Well, okay, 2012 W. Verdugo in Burbank wasn't really a nightmare, it was just a typical short sale.  Took way too long, involved a bitter divorce, a seller that wouldn't commit to moving, a loan that was sold at the last minute, etc. etc.  Kudos to our buyer, George, for hanging in for six months.  Thanks to everybody who expressed interest in the house.

Coming next week in Sherman Oaks: huge, super-deluxe townhome (and better pics, too)

I'll soon be listing this gorgeous, huge townhome at 4604 Norwich Ave. in Sherman Oaks.  It has four bedrooms, 4 baths, a bonus room, 2-car garage, open floor plan, roof-top deck, high-end finishes throughout, and 2400+ square feet.  It was built in 2008 and there are only 4 units in the complex.  The home owners' association dues are a low, low $144/month.  The complex is on a quiet, green residential street but it's close to Ventura Boulevard and all its attractions.  It will list at $550,000.  This is a terrific option for those looking for lots of "done" square footage at a lower price. 

This is an REO, which means it was foreclosed on and is now owned by the original lender.  For those of you that don't know, these types of sales usually go much more smoothly -- and quickly -- than short sales.  I will have much better pics later this week.

Refinancing a bubble?

The following editorial appeared on the opinion page of today's L.A. Times.  I think it's worth printing in its entirety, and my take is at the bottom:

Rock-bottom mortgage interest rates offer borrowers the opportunity to free up a significant amount of cash by refinancing their loans and lowering their monthly payments. Unfortunately, that option isn't available to millions of borrowers because plummeting property values have left them owing more than their homes are worth, rendering them ineligible for a better loan. Others are trapped by poor credit ratings or restrictions imposed by their second mortgages. The Obama administration, which has tried without much success to help some of these borrowers refinance, is looking for ways to enable more of them to do so. There are trade-offs, but it's an effort worth making.

At issue are several trillion dollars' worth of mortgages backed by Fannie Mae and Freddie Mac that charge interest well above today's prevailing rate. Enabling these borrowers to refinance could save them hundreds of dollars a month. It also would help more of them avoid foreclosure, reducing the amount Fannie and Freddie lose to defaults. That's good for the taxpayers, who are covering the companies' losses. Cutting the borrowers' payments, however, would necessarily trim the revenue collected by Fannie, Freddie and the investors who purchased securities based on those mortgages — potentially by billions of dollars.

Advocates say that the public would come out ahead because the reduced payments would be more than offset by the reduction in defaults and the benefit to the economy. The Congressional Budget Office agreed in a recent report based on one possible implementation of a refinancing plan. Even so, it's not a slam dunk. Some barriers to refinancing, such as those posed by second mortgages, are stubbornly hard to overcome; that's one reason the existing refinancing program for "underwater" borrowers has helped only a fraction of the number anticipated. Nor would the program do much for those most at risk of foreclosure, given that borrowers who have fallen behind on their payments aren't likely to be eligible.

Nevertheless, the government should try to enable more people whose property values have plummeted to refinance. These borrowers are caught in a trap not of their own making; if not for that trap, Fannie, Freddie and investors would have seen their revenues cut long ago. Lowering more borrowers' monthly payments won't cure all of the housing market's many ills, but it will brighten those households' financial outlooks. That will boost consumer spending and avert some foreclosures, helping the communities hit hardest by the housing slump. 

I agree that underwater homeowners should be allowed to refinance.  The alternatives -- either short sales or foreclosures -- only drag down property values for all the other non-underwater neighbors.  Plus, the end result is the same -- no, the investors won't see the profits they were promised, but they wouldn't either if these homes are short saled or foreclosed.

With all the turmoil in the financial markets, how's the local real estate market doing?

Revision note: oops, the quote is from Franklin Roosevelt.  Heh, heh I knew that heh.

Will the current world financial market turmoil have a negative effect on real estate here in Southern California?  Sure. Dramatically? Nobody knows. Most experts who thought we were at the bottom of the market no longer think that. Just being honest here, folks.  Here's what I know for certain:

- Life goes on;

- You need a roof over your head;

- In most cases, you'll need to pay for that roof, either by renting it or buying it.

- The only thing we have to fear is fear itself.

I know what you're thinking: "Gee, thanks, Winston Churchill. That was sure profound."

Point is, I don't know if it's a good time to buy or sell or rent or short sale for you until I know your specific, particular situation. Nobody else knows either. So please feel free to reach out to me.  Because one other thing I do know for certain is that I can help you sort out your options.

LATimes: Housing prices edge towards double dip

I know I'm not supposed to report news like this, but today's L.A. Times has an article entitled Housing Prices Edge Towards Double Dip (the title above should link to the article).  I don't dispute the stats, nor do I want to gloss them over, but here are some things to consider:

• These are national stats.  All real estate is local, and some of our neighborhoods are seeing price rises.
• Studio City, Burbank, Toluca Lake and Sherman Oaks, et al do not have the same amount of foreclosures that other neighborhoods have, and foreclosures skew the stats lower as they make their way through the trustee sale process. Even short sales and foreclosures, when they eventually sell on the retail market, sell at market prices.
• This is good news for buyers as long as interest rates stay relatively low.
• If they purchased a home before 2003 (and didn't pull money out in HELOCs), most local sellers still have a lot of equity over their purchase price.
• Sellers with nice homes in nice neighborhoods at market prices are still seeing quick sales.

New "HAFA" short sale conditions

"HAFA" stands for Home Affordability Foreclosure Alternatives and it's the latest set of short sale rules to come along.  These will be implemented by most loan servicers on August 1, 2010.  We Realtors have been strongly encouraged by our brokerage management to get up to speed on the new rules.  I'm currently on module six of an eight-module webinar.  So far, it certainly looks like the devil with be in the details, but here are two things I know now:

• Paperwork and timelines will be standardized;
• The short sale process will be shorter.

I'll have more info as I become more educated.  I'll also be updating my Short Sale and Foreclosure page on my website very soon.