I am sitting here waiting for the kids to finish up so we can take their Dad out to dinner for Father's Day ~ Happy Father's Day to all you Dad's out there.  Reading my funnies in my email thought I would share this one with you.  After all it is Father's Day and the rest of the day belongs to Daddy, not Real Estate...

YOUR AGE BY EATING OUT TRY THIS IT REALLY WORKS

Don't tell me your age; you probably would tell a falsehood anyway.  Just let 
me know if it works for you.  

DON'T CHEAT BY SCROLLING DOWN FIRST!
It takes less than a minute. Work this out as you read ...
Be sure you don't read the bottom until you've worked it out!
This is not one of those waste of time things, it's fun.

1. First of all, pick the number of times a week that you
would like to go out to eat.
(more than one but less than 10)

2. Multiply this number by 2

3. Add 5

4. Multiply it by 50

5. If you have already had your birthday this year add 1757...
If you haven't, add 1756.

6. Now subtract the four digit year that you were born.

You should have a three digit number.

The first digit of this was your original number. (I.e., How
many times you want to go out to restaurants in a week.)

The next two numbers are

YOUR AGE ! ------ (Oh YES, it is!!!)

We are learning more and more each day regarding the short sale process and how to treat Short Sales this time around.  One thing that hasn't changed is the seller will be 1099 the difference.  What are the tax consequences?  What should the seller be looking at?  Can this be deferred over more than one year?  Or is this a one time hit, knocking them up into the next tax bracket?  Any tax advisers out here?  I would just like a general understanding as I know this will depend on the income bracket and write offs the individual already has.  Not to worry I will still advise my clients to talk to their accountant!

Jana

There was an article in today's Business section of the Los Angeles Daily News with big headlines OVER VALUED Report: LA homes priced too high.  (I have always loved and respected this newspaper NOT)  It goes on to say that the reason homes are not selling in our area is because the home prices are too high, no mention of higher interest rates or buyer reluctance.  Pointing to one home in Granada Hills (my neck of the woods) that has been on the market for 22 months and is now $224,000 cheaper.  It has fallen out of escrow 6 six times.  The owner is quoted as saying these buyers want everything replaced, brand-new.  Then goes on to say what some of these items are: new roof, granite counter tops, fenced pool, etc.  Here is the papers reason for this home and others are not selling, "But a new report says the real reason the (seller's name) home is languishing may be the price.  It's still too high." 

At the end of the article is this pole.  I am sure you can look up your area on their website.

How overvalued is your home?  Based on home prices, interest rates, household income, population, density and other factors (I wonder what those other factors are)

Rank and City                                       Median price in thousands         Overvaluation

1.  Bend, Ore                                         $324.2                                      78.7%
2.  Prescott, Aiz.                                    $246.6                                      64.6%
3.  Naples, Fla                                       $383.1                                      63.4%
4.  Merced, Calif.                                    $280.9                                      63.2%
5.  Madera, Calif.                                    $314.1                                      62.9%
6.  Miami, Fl                                           $309.2                                      59.2%
7  Atlantic City, NJ                                  $272.1                                      57.8%
8.  Riverside- San Bernardino, CA             $346.4                                      56.7%
9.  Salinas, Calif.                                     $596.9                                      56.3%
10. Flagstaff, Ariz                                    $274.9                                      55.6%
(now they jump around with Rank, more interest to people in LA I guess)
13. Los Angeles, CA                               $524.9                                       52.1%
16. Bakersfield, CA                                 $234.1                                      50.9%
53. Oxnard- Ventura, CA                         $543.5                                       33.9%
75. Santa Ana - Anaheim, CA                  $611.9                                       28.4%
91. San Francisco, CA                            $791.9                                       23.4%
95. San Diego, CA                                  $469.1                                       21.6%

Source: Global Insight's real estate group and National City Corp.

Here is the company that they got their report from. http://www.globalinsight.com/
If you would like to read the whole article go to http://www.dailynews.com/business/ci_6135170

Any comments?

Are Short Sales to be treated like normal negotiations?  Our quandary is to tell or not to tell?  Marcia and I have been negotiating with the lender and have one offer summited to the lender on our short sale.  It is in the MLS as taking Backup Offers.  The lender said to send all backup offers over a certain price.  We are still getting showings and have had agent inquiries.  Should we tell the buyer's agent not to bother if the offer isn't over that amount?  Or should we just hum and ha and tell them to send us their best offer?  The bank may choose a  backup over the original offer and our addendum to the purchase agreement states that.  So are Short Sales to be treated differently from the normal sale?

What would you do?

I have heard my title quote before and Sharron and Steve (one of our friends on Relib) used that quote again the other day.  It really hit home to me yesterday.  Marcia and I have a client who loves fixers.  I didn't realize it until yesterday and may have opened my mouth one time too many and actually talked her out of one or more of the homes we have looked at.  And I KNOW BETTER!  We have been looking for several weeks now.  They are on a strict budget and having that in the back of my mind we have been looking at homes that won't need as much work, which is hard to find in the price range we are looking at.  We think we find one, Marcia and I get excited, call them to come over and see ASAP and our buyer doesn't like it.  We showed 3 REOs and 3 owner occupy yesterday.  Didn't know the condition of the REOs as there were no pictures.  Our buyer's wife liked the homes that needed the most work the best!  Thinking back at the homes we have showed them, she doesn't like the homes that are all fixed up and nice.  This has surprised Marcia and I more than once.  Then it dawned on me, she likes fixers and the more that needs to be done the better!  I need to take my emotions out of the equation!

Two other quotes I have been thinking about today, Joe's quote "if you like it, I love it" and "there is a buyer for every house".

How many times have you opened your mouth or relayed your dislike for a property?  Do we put our emotions in the way of your clients more than we should? 

Jana

After reading Mary's blog today.  Please don't feel guilty Mary!  I thought I would tell you about a amazing situation that happened to my neighbor today.  These are the kind of stories I would love to see on the evening news.

My next door neighbor is a great guy.  If anyone in the neighborhood needs anything Joe will be the first to lend a hand.  Joe has his own towing company.  He has two trucks, one a very large flat bed.  Joe got a call this afternoon from a cement company that one of their trucks had a broken back axle and was stuck on a local fwy.  By the way this is one of those big round cement mixers.  Driving up to the area where the truck was broken down, Joe turned on his lights and started to slow down, slowing down the traffic behind him also.   He could see the truck about a 1/4 mile up the road.  All of a sudden the back end of the truck (that big round part) started moving down the fwy at an angle moving into lane one (Joe's lane)  Joe was able to slow his lane even more but knew that back end would go into the next lane over that had traffic speeding by at 70 miles an hour.  Without thought for himself, Joe put his truck between the run away cement mixer and lane two of the fwy.  He was able to stop it!  His truck's front end is a mess but Joe is fine.  I know he saved several lives today.  Can you imagine a small car going 70 mp colliding with the cement mixer?  Or the mess that would have resulted from everyone slamming on their breaks?

One of the things that amazes me, was the reaction from the people behind Joe, when he first started slowing the traffic bring them to a stop, he had people honking and cussing at him.  Two moving vans were tailgating him!  So if you happen to get behind a tow truck and they put their lights on.  Know they are getting ready to slow and slow yourself.  They could be saving your life!

Joe's truck was drivable and he hooked up the cement mixer and towed it off the fwy.  Then came home and poured a glass of wine LOL.  I don't know how the insurance company will handle this.  The heavy front bumper is bent, his whole engine pushed in.  There is a huge dent in the radiator, but no hole.  Is that amazing or what?

I am sure Joe was not alone in that truck today.

Jana 

I am behind in my reading and just got through with my last email newsletter from NAR.  Did you read the Demographic Characteristics of NAR Members?  In a nut shell this is what they had to say from their recent pole.

1. The typical REALTOR^® is a 51-year-old white female. <---I am a tiny bit older
2. She has attended college, is married, owns her home, and lives there only with her spouse. <--- how did they get the kids to move?
3. The typical REALTOR^® has a household income of over $100,000. <--- some years
4. The typical REALTOR^® votes in both national and local elections. <--- yes I vote  Indeed, the percentage of REALTORS^® who vote is well beyond that of the electorate at large. Ninety-five percent of REALTORS are registered to vote. Ninety percent report that they voted in the last national election. Eighty-one percent voted in the last local election.

Guys don't panic you are the majority over 60.  As well as being Broker's and working office managers.

Read the article for more interesting tid bits about us!   
http://www.realtor.org/reinsights.nsf/pages/marketintelligence?opendocument

It has been over 10 years since I have dealt in a short pay market and I think I have forgotten more than I remember.  We are dealing with a short pay listing at the moment, it is a clean offer, at market price, and our client has a legitimate hardship.  I am not too concerned with this one.  But we are getting a back up offer that may be better than the original offer.  All offers go to the lender.  Can the lender reject the first offer for the backup?

Our buyers are getting ready to put an offer on a short sale.  The property looks like a REO.  No kitchen appliances, needs paint, roof, the pool is a green swamp, landscaping is dead.  The bathrooms are not completed.  It looks like the seller was remodeling when they ran out of money.  Good points, nice floors, new windows, new light fixtures.  We have no idea what works and what doesn't as the utilities are shut off.  Looks like there are two loans on the property for a total of $630K.  The nice houses in that neighborhood with the same square footage are listed at $599 - $610K.  No sales in '07.  Question how low can we go? 

Does anyone know at what percentage a bank would be better off taking the property and selling it in a foreclosure sale rather than doing a short pay?

An agent in our office called me today to see if I knew if a bank will accept buyer credit in a short sale.  Does anyone have experience with that?

Please feel free to post your questions too. 

We have noticed through the years that there were certain locations that our relocating sellers were moving.  In the early '90's there was an influx of people moving to Colorado.  A few years later it seemed all of Los Angeles was moving to Las Vegas, NV.  Shortly after that it seemed Phoenix, AZ was the place you want to be.  The last two years it has been Austin, TX.  We have not noticed a trend this year.  Seems most of our sellers are staying in State, either locally or within a 50 to 100 mile range.

Are you seeing a trend in your area?  Where are your relocating seller's moving?

Marcia and I have a listing in an exclusive gated community.  To make sure our client's home is priced correctly and to keep updated on the community we are constantly checking the MLS for new listings, price reductions, sales, etc.  The homes in this community typically sell from $1.2 - $1.8 million.  The last 3 sales of our model have been $1.4.  Thursday a new listing came on the market, same model as ours, with a sale price of $950K subject to lender approval for a short pay. (Looks like they owe $975)  Showing instructions =  Call listing agent to show.  We called the agent to get the details, no return call.  Yesterday we had a client call to see our listing and asked if he could view this "bargain" too.  Called agent, no return call.  Today I showed our property and again the clients wanted to see the other house.  Called agent, and as of 5:43 pm, no return call.  The appraisal is going to come in around $1.4 million.  If they owe $975 why not price it low and sell quick?  But not low enough to need a short pay?  We know the bank will not forgive $400K   Why are they not answering agents calls?  There is no sign on the property.  I checked and this agent has a few more listings and they look normal.

Ok my friends what do you think is going on?  Marcia and I can't figure it out!  Have you seen this done in your neck of the woods?  Is this some kind of scam?  Or ignorance?  It is driving me crazy.  Sorry I can't link you to a webpage so you can view the listing, the agent doesn't have a website.  But if you would like to email me I will be more than happy to send you the address and you can check it out on our website. 

We are noticing a strange trend with the buyers in our area and we are curious to see if you are noticing this trend in your area too. 

Our buyers have become psychic!  It is really amazing.  This is how we know.

We have been showing our clients only well priced homes in an area they have told us they want to live.  We checked the MLS for the most recent sales of the homes similar to the homes we are showing them.  We have no doubt these homes are priced well.  We have even viewed them just to make sure!  Our buyers find a home they really like and we are ready to write an offer.  We suggest a price that should get them the home and all of a sudden they get a funny look on their faces and they tell us they will not pay more than a figure way below the market value.  We are a little shocked and confused, as they told us what price range they wanted to look in.  Their lender has approved them for that price range.  What happened?  Have we been showing them homes in the wrong price range?  We are now a bit tongue tied.  We try to explain to them that they will probably not get the home with such a low offer.  In fact the seller will probably be insulted.  Try as we may we can’t seem to get them to come up.  Finally we pry it out of them.  It suddenly becomes clear! Their reason for offering such a low amount is they KNOW the homes in that area are going to be coming down to that price by next year and they don’t want to pay more than the house is worth.   Do they have crystal balls?  Are they psychics?  Are the prices going to come down that much by next year?  How do they KNOW this?  [You know the outcome of the offer.  The seller countered (almost full price) our clients wouldn’t budge – No Deal, No New Home, No Happy Ending.  The buyers have also decided not to buy until next year as they KNOW the prices will be even lower by then.]

We had another interesting experience at our Open House today.  An Agent came in to preview for his clients.  As he was leaving he asked how low our clients would go.  Our clients are moving out of the area and need to sell the home fast so we have priced it right.  It should sell within $20K or so of the list price.  This agent said that his clients wouldn’t offer more than $200K less.  He then smiled and proceeded to tell us that his clients KNOW the prices are going down and they don’t want to pay too much!

Is there still such a thing as fair market value?

Are your buyers into crystal balls?  Are they psychics?  Is this a local phenomenon?  If you are experiencing this phenomenon, how are you dealing with it?