Long Beach Real Estate Results for October 2007

Now you might be saying that we haven't finished October yet so how could the results already bee in. Well we have compiled the data through this morning for Active, Sold, and Expired only so we will have more to report tomorrow when things are finished up today.

So what did happen in October and more importantly what has been happening this last 6 months? Well we put together a graph to make things a little easier to see.

Long Beach Results for October 2007

So what is happening. Well other than a slight drop in August more homes are coming on the market. The number of Expired homes has risen slightly. What does this mean? It may mean that some sellers cannot lower their price or they do not want to lower their price. Homes and condos are being sold and while sales are off almost 50% from last year that is the the same across Los Angeles County. So if you are looking to sell you can still do so even as more competition comes onto the market. Long Beach currently has 14.35 months of supply of properties (supply is calculated as Number of active properties\number of sold in the month) as a city although this varies by area which we will cover over the next several days.

100's of choices of Prime Long Beach real estate for under $500,000?

The media interprtation and the common understanding of many consumers are that there are "homes listed on every street". The truth is that we do have more Long Beach real estate available than we have had in years, however, it may not be as extreme as many think. We do have over 2,000 homes and condos available for our fair city, but we are a city of over 500,000 people.

For illustration of the actual inventory that is available, let's take a couple of popular areas and a common price range. The Plaza area, Los Altos and Rancho areas of Long Beach are known of wonderful tree lined streets, good schools, and usually tough for the first time buyer to get into. But now that the market has had some tough times, there should be 100's of homes......right??? Let's see!

• Criteria: Homes under $500,000, minimum 2 bedrooms, 1 bathroom


• Total Homes available: 19


• If you wanted a 2nd bathroom, you would have just 2 options!

So where are all the homes that everyone is talking about?? It seems that the media may exaggerate a bit :). The laws of economics of supply and demand take over at a certain point. With historically competitive interest rates the homes are still moving and highly desriable areas continue to be in demand. Happy searching for the home that is right for you! Try a FREE Long Beach MLS service to see what is available in the area that you want!

Higher Rents give increased value to Multi-Units

Traditionally in the 4th quarter there are a number of duplex and 4-plex listings that become available as people try to sell their investment properties prior to the end of the year. With a tightening market the multi-units have now come much more in-line with traditional investment numbers. If you have been wanting to get a multi-unit in prime areas of Long Beach, this may be some of the best opportunity to have in years!

• Belmont Heights - 17 available multi-units under $1,000,000
• Example of inventory Available: Triplex that has been completely remodeled, ~7 Blocks from the beach, has a 3 bedroom/2 bathroom front house and 2 studios. - Current Rent total: $4,045 a month

This would be a great opportunity for someone who wants to owner occupy a neat property and get some rent. There are definitely some wonderful options out there to explore and with rents increasing it will give property owners increased yields over the years.

Jergins Tunnel Open for First time in 20 Years!

The Jergins Tunnel will be open this Sunday. This is a wonderful opportunity to view a piece of Long Beach history. This tunnel was built in 1927 as a passageway for visitors to the Long Beach Bike.

As this tunnel has been closed since 1988, this is an opportunity view history that has not seen the general public in 20 years! Check out the details of the event at https://www.universitybythesea.com/jergins.php

Bixby Knolls Real Estate October Update

Long Beach has many different areas of the city and truly each area is unique and has it's own character. Every Friday we will be doing an update not only in writing but a video update of either an area of the city or the entire real estate market in the city of Long Beach so make sure to tune in every Friday to see what area has been highlighted. This Friday we are highlighting the area of Bixby Knolls and the Virginia Country club.

October 2007 for Bixby Knolls and the Virginia Country Club

1. New Listings - 35 (22 single family homes, 13 condos)
2. In Escrow - 5 - (Pending 4, 1 Backup)
3. Total Active Properties as of Today - 190

Our Video Update highlights the area of the Virginia Country Club.

October & The Pumpkin Patch

As we near Halloween the corner of PCH (Pacific Coast Hwy) and 2nd st is home to the Pumpkin Patch. This fantastic carnival and place to buy pumpkins appears every year on the 1st of October. It also stays around to be transformed into a Christmas tree lot. This is the southern most corner of Long Beach and on the border of Los Angeles and Orange County. We put together a brief video so you can see the edge of the carnival and how the southern california fires are affecting the Long Beach sky.

H.R. 3648 ~ What it means to you

H.R. 3648 would amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income.

View H.R.3648

Read more about H.R. 3648 at Washington Watch.

New Long Beach Condos under $200,000!

First time buyers can still get some great options out here in Long Beach. A new studio development was created in downtown and is set to release. The Loudon Arms is a neat project of 29 units located at 345 Chestnut. I was able to preview them today at a Broker open to check out what they were able to do. Here are some of the highlights of these units:

• Lovely wood flooring throughout



• 32" Flat Screen mounted over the fireplace



• Granite kitchen counter tops



• New stoves, refrigerators, and microwaves included!



• Storage area in the basement

Although these units do not have parking deeded with the units, there are lots nearby where you can lease a spot on a monthly basiss (usually for less than $50 /mo).

The most exciting part of these studios are they range in price form $179,000 to $229,000! I would encourage a look by these Long Beach Condos by speaking with your local Long Beach realtor as there are some different floor plans that are possible!

Wild Fires Dim Long Beach Sky

The fires are affecting all portions of Los Angeles and Orange County. Already Lake Arrowhead has lost 160 homes and communities north of Los Angeles such as Stevenson Ranch and Foothill range have already lost additional homes.

Orange County has fires occuring as well and has already had to evacuate homes, businesses, and jails in certain parts of the county.

The sky in Long Beach and surrounding cities continues to see the effects of the fires. We hope that the brave men and woman of the fire departments get control of the fires as soon as possible and know that they are working diligently to ensure that this occurs.

Discover the Areas of Bixby Knolls to find your Home

If you drive north along Atlantic Blvd, past the 405 Freeway, it won't be long until you see a nice sign that states you are entering Bixby Knolls. New visitors to the area will drive down the tranquil tree lined streets and try to find just that right home in Bixby Knolls. The problem with only looking for Bixby Knolls is that there are actually 9 different areas this area, so you will want to do some research to find out which area is right for you. Each area has their own personality and different characteristics of properties so have some fun to see which is the best fit. After you have learned a bit about the areas, look at the Long Beach MLS so you can see what is available!

In the effort to continue to document Long Beach so families and individuals can learn more about Long Beach real estate, here are some of the areas within Bixby Knolls:

• Virginia Country Club
• New Bixby
• Bixby Highlands
• Los Cerritos
• California Heights

Some of the areas have larger concentrations of Craftsman and Spanish Style (like California Heights) while other areas are known for larger square footage properties (like that of Virginia Country Club). Each area has it's own charm so find the best fit for your goals.

How much can I save under the Mills Act?

With all of the activity in the market and the pressure on interest rates, foreclosures and affordability are the Hot Topics, a much quieter topic that can save you money has stayed on the radar. The Mills Act is a state law that allows cities to enter into agreements with historic structures to allow a tax break. This tax break can be substantial!

On a property that would sell at $385,000, the traditional tax rate, calculated a 1.25% of purchase price, would be $401.04 a month. Under the Mills Act, your tax basis would be $104.81 a month! Wow, what a savings!

We will post some additional BLOGs that show you in more detail how to calculate this savings. In the city of Long Beach you can get into the wonderful Villa Riviera and take advantage of these great savings!

Deed in Lieu of Foreclosure?

There are many different ways a bank can help a home owner when they are behind on their payments. As we have mentioned in previous posts you can get a loan modification, forbearance agreement, short sale, and deed in lieu of foreclosure. All of these different methods will prevent the home owner from having to face foreclosure and having that on their credit.

So what is deed in lieu of foreclosure? This is the process in which the bank decides that they will take ownership and possession of your home instead of going through the foreclosure process. The bank decides that it is in your and their best interest to take the home and you return your keys and leave the home.

So why don't all banks do this? Well it is a very costly process for the bank. They are not in the process to own homes. They really like to lend money so others can buy property. They must have a staff to look after the homes, check on the homes, and have a real estate professional or bank staff member list and sell the home. They can only do this with so many properties.

So how do I get my bank to do this? This is where you have to stay in contact with your bank to see if they have a deed in lieu of foreclosure program and check to see how you get approved for it. You may not be able to apply for this program with your bank and the short sale program at the same time. Make sure that you get this cleared with your bank and understand all of the rules ahead of time.

We hope that clears up what a deed in lieu of foreclosure is and how it can help you if you are having trouble making your mortgage payments.

How Long Does Foreclosure take?

It is important to know how long the foreclosure process takes. Once you know how long it takes, it will make it easier to avoid the foreclosure process. One of the issues with foreclosure is there are some rules but they are more of minimums than maximums and we will do our best to point that out.

1. Foreclosure begins once you are in default of your mortgage - now as soon as you are late on your mortgage you are technically in default. If banks worried about the process every time someone was late it would be unmanageable. Banks typically file the required Notice of Default after a home owner has missed 3 consecutive payments or 90 days late.
   
2. Notice of Default - This is a document recorded at the county that your home is located in. If you live in Los Angeles county it is recorded in Norwalk. Banks do not always file this after you have missed 3 payments. They don't really want to take this step and most will work with you to avoid this step. This is the step where the clock starts going.
   
3. Time for Notice of Default - A home owner at any time can bring the mortgage current with all back payments and penalties. Often banks may be able to waive penalties if you have been in dialogue with them and inform them of your situation. The NOD (Notice of Default) states that you have 90 days before they can set a sale date.
   
4. Sale Date - This is where the home owners home can be sold. The date cannot be set any earlier than 21 days after the 90 day time period of the Notice of default. Once again the bank does not want to send the property to a trustee sale and they do not want this to happen. One can still bring the property current throughout this process. Once someone is within 48 hours of the sale date it becomes very difficult to delay the process but it can be done.
   

So a home owner has 90 days where if they have missed payments an NOD will likely be filed, 90 days for the NOD to be active for, and a minimum of 21 days for the earliest sale date. This gives a total time frame of 201 days for a home to foreclosure and be sold. We have seen the process take 9-10 months and banks still work with individuals. The earlier you contact your banks the better or have your real estate professional who is a trained loss mitigation specialist speak with them to delay the process.

Great Single Family Homes in nice areas under $500,000?

Affordable Homes in Great areas of Long Beach and Lakewood are now available. Just 4 months ago it would be difficult to find a home in Lakewood or in areas of Long Beach like the Plaza, Los Altos, or Rancho are under $500,000, but now there are options! If you search the Long Beach MLS for homes in Lakewood and Long Beach here is what you will find as of 10/19/2007:

• Lakewood Single Family Homes - 161


• In the popular Crest Gardens Mayfair area there are 25 homes, with the most affordable being under $400,000!


• Long Beach Homes (Plaza, Rancho, and Los Altos) - 16

Having any houses in Long Beach or Lakewood under $500,000 that were on great streets was previously hard to find. Take advantage of a climate now that is allowing a buyer to get a great home while interest rates are still historically low. These homes qualify for great first time buyer programs as well where you may even get a FREE down payment and a 40 year loan. Check the MLS for Lakewood and Long Beach today so you can see which one may meet your needs.

Short Sale vs Foreclosure - Which is best

In this market with the change in interest rates, jobs, and opinions from everyone it is often asked why would I do a short sale or why not just walk away from the home and let the bank take it into foreclosure? Both are very valid questions and while we can't get all the reasons out there we thought it might be good if we go over a few reasons for each and why you may or may not do each one.

Short Sale

1. This is the process where you actively work with the bank and a loss mitigation specialist to sell your home even though you owe more than the home is worth.


2. This is a valid solution if you want to prevent a foreclosure from showing up on your credit report.


3. You want to limit the number of late hits to your credit report as it can often be accomplished much faster than a foreclosure.


4. You want to face the issue at hand and have a bank that understands that these things do happen.

Foreclosure

1. You bank has indicated to you and your real estate professional that they have no intention of working with you on a short sale. Make sure this is in writing before proceeding.


2. You may or may not have multiple properties that you cannot get short sales negotiated on.


3. You are OK with significant damage to your credit and having to report that you had a foreclosure on future lending applications.

In all both are solutions that will help a homeowner when they are faced with mounting or increasing mortgage payments that cannot be met. Be very wary of individuals who guarantee they can make a short sale work or guarantee that they can prevent foreclosure unless they are personally going to buy your home and can show you proof of that in writing that they don't mind getting notarized. In the end not one single solution is best. What is best is the one that works for you and your family. Make sure that you receive appropriate advice from your real estate professional as well as your tax advisor prior to pursuing any course of action.

Soft Loft vs. Adaptive Re-use - which is right for you?

The Long Beach Loft market still has some excellent inventory available on the Long Beach MLS. Whether you are considering a Soft Loft or an Adaptive Re-use , there are lofts available. Rarely are there properties in each of the developments, but currently you can find a loft in almost every development (none currently at the Ebell Theater).

As you are evaluating your options, take time to consider the benefits and drawbacks of each style of Loft so you can not only enjoy the prime location, but you can also take advantage of the unique differences between Soft Lofts and Adaptive Re-use projects. Search the Long Beach MLS so you can find the Loft that is right for you.

Long Beach Mid Month Report

OK we are halfway through October and the kids are getting excited about Halloween. So is the real estate market scary? Well let's take a look at what is going on and see if it is or isn't.

Mid Month Report for Long Beach CA Real Estate

• Number of Units in Escrow - 81 (39 Condos, 42 homes)
• Days on Market Year to Date Average - 72
• Days on Market for October -69
• Average Price for a Condo on the Market - $390,000
• Average Sold Price for a Condo -$376,000
• 43 of the properties that went into escrow went in under 60 days of being listed for sale.

So what does all of this means. Well here is what we thing of all of these statistics which were pulled from the realtor MLS system that covers Long Beach.

• The average condo being sold is more affordable than the average one listed. There are 330 active condos under $300,000 so there are affordable choices out there. Don't let averages fool you!
• If sellers aren't getting an offer or enough showings within the first 30 days they may want to revisit their price with their real estate professional as you want to be in escrow within the 60 day mark.
• Days on Market (the average time a property spends on the market prior to receiving an offer) is lower for October. We have the serious buyers and sellers out there wanting to make deals work.

So is the market really scary? Well we don't think so but beware trying to wait too long before responding to buyers requests or a buyer offer.

Banks Look to Unload Inventory - You Save Money!

As the 4th quarter is well upon us Banks are now looking at the properties they have under on their books as opportunities to start 2008 fresh. Banks clearing their books means savings for you!


Now, this is not referring to "short sales" as banks are still facing some challenges making quick decisions on those, this is referring to bank owned property. Bank owned property may often be referred to as foreclosure or REO. As the bank now owns homes, they need to clear these properties off of their books so they can maintain their business of lending money!

Real life example:

• A 1 bedroom condo in the Eastside area of Long Beach was listed at $264,900 for quite some time (over 100 days). Now that the 4th quarter is here, the bank dropped the price to $224,900, where it quickly received an offer. That's over a 10% break!

More examples like these will be prevalent over the next 45 days as banks drop prices to attempt to close prior to years end. Remember, that you will need to close before the end of the year to get some of the best deals and the properties are sold "as-is" so the bank won't be fixing anything, but you will be saving on that purchase price! Use the Long Beach MLS or contact your local realtor so you can get the deal on a foreclosure that you have been waiting for.

5 Tips to Working with Banks on a Short Sale

Now often times real estate professionals and buyers are scared of submitting offers on short sales because of the fact that banks are involved and the time frame that they take. These situations can often be beneficial for the buyer, seller, and the bank. Banks do not want to go to foreclosure. I know we have stated that in previous posts but they do not. It costs them more money, time, and effort to go to foreclosure. As banks work on their process of short sales there are things you can do as a buyer, a seller, and have your real estate professional do that will help improve the process for everyone.

5 Tips to Working with Banks on Short Sales

1. Have a well documented offer - An offer from a buyer must be so complete that there are no questions that can be asked that an answer is not readily available. Make sure that the buyer has taken time to get pre-approved. Ensure that they submit credit scores (with sensitive data deleted), bank statements, and any other information that a lender would want to do. They want to make sure that things go through successfully.
2. Communicate with the bank regularly and kindly - Banks have people who work for them who are people and not robots. Be kind and call at least once a week to see if anything is needed or missing. This is generally done by the seller or the listing agent as they are the ones who generally have signed authorization to speak to the bank.
3. Make sure the sellers packet is complete!!! - Nothing is worse than having the seller forget to give ALL their information to the bank. Ask the selling agent if the sellers packet is complete and ready to submit.
4. Be patient - The banks are assisting many home owners and are working hard at things. Understand that these things take weeks and sometimes longer than promised. If you are the agents regularly communicate
5. Be Understanding - This is for all parties involved. More than likely commissions will be reduced, repairs may not be authorized or approved, and time frames will extend. It is still a situation that helps out all parties and prevents foreclosure.

These tips will help make the short sale experience as pleasant as it can be for all parties involved.

How many properties are actually available?

As many consumers monitor the market activity for the past month with under 200 properties being sold for the month of September, it could be easy to say that there are plenty of Long Beach homes and condos available and one should wait there time for the prices to fall as there are plenty of choices out there. On the other hand, it could be more useful to look at what properties are actually available....

• If you are looking in Belmont Heights for a home under $700,000, then you have just 13 options


• If you are looking for a 1 bedroom, 1 bathroom condo in a nice area of the Eastside, under $240,000, then you have just 6 choices


• If you would like a home in North Long Beach under $500,000 then you have 321 options

As you are looking through the inventory of available properties, keep an eye out for the property that best meets your needs and your budget. With ALL of the choices available throughout the Long Beach MLS, realize that in most cases, you can purchase just 1 so pick the one that meets your needs and remember, there may not be as many as you think that you actually like :)

Bixby Knolls Real Estate Update for September 2007

Ok so with all of the rate changes and everyone talking about the end of the world for real estate what happened in Bixby Knolls Long Beach for September.

As usual all information comes from the real estate system that covers the area of Long Beach which is SoCalMLS.

September 2007 Real Estate Statistics for Bixby Knolls

• Active (as of the end of September) - 105
• In Escrow - 8 - (Pending 6, Backup - 2)
• New Listings - 17
• Number of Active Condos (out of the 105) - 26
• Number of Sales of Condos (out of the 8) - 1

Now this is interesting. We have a nice area like Bixby Knolls and it has just over 13 months of active inventory available. The prices are not spiraling downward in this area they are just holding steady for the most part. Now the condos are providing opportunity for buyers to get into a great area of Long Beach at an affordable price if they are using the first time home buyer programs. Agents in the area have been cooperating well and helping buyers and sellers accomplish their goals.

Five Key Things That Agents Must Be Doing Right Now

1. INCENTIVISE THE MARKET- When there are MORE listings on the market than there are buyers to buy them, the negotiating dynamic in that market (known as a buyers market) is SELLER vs. SELLER. Therefore, the Realtor has to help their SELLER effectively COMPETE with all the other sellers in the market in order to become a successful seller and not an EXPIRED. Realtors representing BUYERS will typically show 5 or 6 properties to that buyer prospect out of the 40 or 50 that are available. With that being the case the seller only has a 1 in 8 chance that their home will be shown by any given BUYERS agent. To INCREASE those odds dramatically the seller can offer a 4 or even a 5% COOP commission. This added 1 or 2 percent cost to the seller is far less expensive than the size of a price reduction that would make the same amount of noise in the market. The tool we use to illustrate this is attached and shows the commissions being offered for 48 similarly priced homes for sale. The seller sees by showing him this tool, that there are only 6 other sellers offering 3% and there are none offering 4 or 5 which then becomes the POINT OF DIFFERENTIATION in the market. It will help to drive all of the QUALIFIED buyers for THIS to this seller RIGHT NOW!
   
2. PRICE THE PROPERTY AGGRESSIVELY- From the time Realtors are first taught how to do a CMA, they are taught that there are HIGH comps, MIDDLE comps and LOW comps. The pricing strategy that ALWAYS works for the fastest sale is to have the seller priced closer to the LOW comps than the HIGH comps. In PAR markets and SELLER markets this is NOT that critical and, especially in the SELLERS market, not advisable. However, in a BUYERS market (by definition, there are MORE sellers than buyers), it is CRUCIAL to price the property BELOW the middle and closer to the LOW comps. The BUYERS market we are in right now is DRIVEN by BARGAINS and TERMS. Realtors absolutely MUST get to the SELLERS motivation about selling in this market and ONLY work with sellers that are motivated to SELL (not just LIST). Getting to the sellers motivation might begin with the something as simple as the following question: “So, what are you going to do with the money when this sells?” (assuming it’s not a troubled sale which is a HIGH motivation in itself) Because the HIGHEST and most common motivation to sell is to be a BUYER, we are teaching all of the agents we coach to TREAT ALL SELLERS AS BUYERS FIRST. This gets the BARGAIN into escrow and makes the seller much more reasonable about pricing the home they have to sell to get their new BARGAIN. We show the following as an example of a move up buyer (BELLER as we call them) needing to sell their $750,000 home to buy their dream $1,000,000 home. The trouble is, they can’t get $750,000 for their home anymore so they’re ready to quit. Show them that while it is true that their $750,000 home may now only fetch $675,000 (a paper loss of $75,000 to the market), their NEW DREAM home can NOW be gotten for $900,000 (a paper GAIN of $100,000 from the market)!! That’s a $25,000 HOME RUN!! Let’s get to it RIGHT AWAY!! We use the attached LADDER tool to help with PRICE REDUCTIONS which most Realtors find themselves in need of right now. There is A LOT more on this part of the presentation but this will get enough of their juices going for a short presentation. ANY of you that would like me to make a full presentation of this to an office of your choosing need only to ask (and, of course, schedule).
   
3. OFFER TERMS- One of the challenges in the current market is the shift away from JUMBO loan products at desirable rates. To combat this, a seller COULD offer a simple solution called a BUY DOWN. Simply put, a BUY DOWN does exactly what the name implies; it BUYS the RATE of the loan DOWN for the new buyer. This has a VERY important impact in the current market. It makes a loan EASIER to qualify for than it otherwise might have been. The buyer needs a smaller amount of income for this loan than he did before the BUY DOWN. Remember, the negotiating dynamic in this market is SELLER vs. SELLER. If we can get JUST ONE MORE BUYER to be ABLE to buy OUR listing than all the others, we have put our seller in a position to WIN that buyer over the others. A second consideration for TERMS to be offered by the seller is buyer closing costs and, more importantly, SELLER FINANCING. Many lenders are now moving to 80/20 financing only. That is 20% down and an 80% loan secured by a first trust deed. Again, many would be buyers don’t have the 20% down payment for this program. They MAY have 5% however, and if the seller would “CARRY” the other 15% we might open up more of a market for our seller. Remember SELLER vs. SELLER!! How can I get MY SELLER to be the ONE seller that SELLS!!
   
4. LOOK FOR CHANCES TO TRADE- With SO MANY SELLERS on the market, one silver lining is that there are bound to be two who are trying to sell what the other wants to buy!!! This comes back to our conversation about how CRITICAL it is to ask for and understand the seller’s motivation for selling. Realtors should be asking sellers 100% of the time, if they are open to a TRADE. We have been coaching our agents to make sure they are PREVIEWING PROPERTY EVERY DAY. In order to know about a potential trade, you HAVE to know the inventory in the market!! Get out and see the available inventory!!!! Ask the sellers you preview if they are “open to a trade”. Find out from other REALTORS, if they are working with any one who is looking for a trade. ADVERTISE that you have inventory for TRADE. Open up this avenue and watch the prospects COME TO YOU!!!
   
5. UPGRADE PROPERTY APPEARANCE AND MARKETING MATERIALS- In a BUYERS market, properties that are “tired looking” are going to have to be discounted heavily to sell. This is because there are MANY properties that will appear to be a better value if the condition of the property is not good. These “tired looking” properties can often be spruced up with very minimal effort and cost. Carpet, paint and landscaping are generally inexpensive and quick upgrades bringing maximum return. Consider staging the property professionally. Also, make sure that the FRONT of the property is in presentable condition. Curb appeal is CRITICAL in this market. No peeling fascia boards, no grass in need of mowing and no JUNK on the lawn or around the outside of the house. Pay attention to the KITCHEN and the MASTER BEDROOM & BATH in particular when renovating. Finally, make sure that the marketing effort is FIRST RATE. Make a good looking DESCRIPTIVE flyer for the property. Make sure that the internet listing venue HAS PICTURES!! Consider a video tour as well. Those listings without pictures are not as attractive as those that have them and with so many to look at they will be passed over in this market. Consider an 800 call capture system to give potential buyers more information about the property and to be able to follow up QUICKLY. Have “SPECIAL SHOWINGS” instead of plain OPEN HOUSES. Invite the people in the neighborhoods where the potential buyer for THIS property is living now to a special showing of the property exclusively for THEM. The invitation card might read something like “You have been carefully pre-selected for this invitation to a special showing of the property located at 124 Main Street in YOUR HOMETOWN USA. This SPECIAL SHOWING is a limited engagement and is not open to the public. Please bring this invitation with you when you arrive. There will be a discussion of current financing options including TRADES and LOW cost SELLER assisted financing at the showing as well as a FREE custom REAL ESTATE portfolio analysis provided to each attendee. There will be a drawing held for a $200 Nordstrom’s certificate and refreshments will be served. Public showings will be held at a later date.” Of course, we take this opportunity to show the agents how we can be helpful with our FARM PACKAGE to Identify their potential buyers with this strategy.

Today's Real Estate Market vs. The Downturn Of The Late 1980's

We had our last substantial downturn in the Real Estate market back in the late 1980's. USA Today again stated that the National Association of Realtors is still predicting 5,000,000 sales in 2007. This means we are nowhere near the downturn we had in the late 80's and early 90's. If you remember during that Real Estate recession the interest rates went through the roof and buyers wouldn't buy which meant sellers couldn't sell and the sales for the year were under 4,000,000. Today's market is extremely mild in comparison. Money is still cheap by historical standards and there are still great buys out there. If you're a serious buyer looking for a "deal" talk to your agent about softer markets where homes have been on the market for five months. If you're a seller find out where your competition is priced. You can't go off of comps from six months ago and expect to see your house sell for that anymore. If you are truly motivated to sell your home then you'll need to price it below ceilings where there are levels of resistance and seriously think about offering incentives to buyers. To get your home sold quicker you need to attract agents representing buyers by offering a 4% commission to them. They will see that and even if your home doesn't quite fit their buyers needs they're going to make sure it's on the list of homes to show. The industry as a whole is and will continue to go through a steady bleeding of agents, mortgage lenders, escrow offices, title agencies and so on.....so people are hungry to get transactions through and if that means getting their attention by bribing them with an extra percentage point then do it. If you're not willing to price your home competitively and take a few extra steps to get it sold when working with your agent, then you need to seriously consider whether you want to sell right now. I hope you found this informative and happy hunting out there....no matter what side of the fence you're on!

3 Times to Consider a Short Sale

Often times I am asked the question by clients, friends, colleagues "When should someone consider a short sale?" It is important question today and it is important to know that a short sale is an option that may not work for all but should at least be considered. So today we wanted to address situations and time frames on when you should consider a short sale.

• You are currently 30 days or more behind on your mortgage and you can't catch up - Now this is important. There are times when people get behind on their mortgage because they are working on a business, tending to family, or waiting for a disability payment that they are guaranteed will come in. If you are behind in your mortgage and know you will be able to make it up call your lender and explain your situation to see if they can work with you to adjust your payments temporarily. If you can't catch up and know you will not be able to make up the payments calling your lender immediately and asking for short sale information is important.
• You are about to miss your first payment and you know you will not be able to make future payments - If you can see that you won't be able to make future payments because your loan is adjusting upwards then contacting a real estate professional is critical. Often times people have enough equity to sell but not to refinance. It is important to get this information from a specialist. I always recommend speaking to a real estate professional and a lending professional. I do not recommend speaking to 1 person who does both lending and real estate. Have the real estate professional or the lending professional refer you to someone that they have used on their own home. If you don't know anyone or didn't like the last service you received try the bank or credit union you bank at or ask a friend whom you trust.
• You have received a Notice of Default (NOD) from the lender - This means they have filed the legal paperwork recording that you are in default of your mortgage. This notice must be on record for at least 90 days. They cannot set a sale date of your property earlier than 21 days after this 90 days has been completed. If an NOD has been filed and you cannot make up the payments I recommend contacting your bank and a real estate professional trained as a loss mitigation specialist immediately to help you.

If you are just having problems making payments or you are out of work temporarily these may not be strong enough reasons to consider a short sale. Short sales are great at helping you avoid foreclosure but they will cause you to have to sell your home. Always seek qualified advice from real estate professionals, tax professionals, and legal guidance as you deem appropriate.

Tax Consequences of a Short Sale

The most common question that arises when seller's are considering a short sale is what are the tax consequences when I sell this home.

Well first the disclaimer: Please see a CPA, your tax professional, or a lawyer prior to making any decision that you feel may or may not have tax consequences associated with it. I am not a tax professional and recommend that all clients and individuals seek the advice of a tax professional in regards to short sales.

So with that out of the way let's go over a few situations that have happened to clients in the past. In addition for more short sale articles on our blog go to Short Sale Information.

Short Sale Issues

1. Will I get a 1099? - The answer to this is more than likely. In order for banks to get the loss off of their books they will issue you a 1099 which may be considered debt relief.
2. Will I owe taxes on this? - First, if you owe taxes it may be at your standard income tax rate.

• You may not owe taxes if it is your primary residence. You may be able to take your home owners exclusion for owning the property for 2 years as your primary residence.
• If it is not your primary residence and you have not refinanced your property your accountant or tax professional may be able to show this as a loss and that you did not make money on this property.

Foreclosure Issues

1. Will there be tax consequences on a foreclosure - More than likely yes. A foreclosure and a short sale are both considered debt relief. It is out belief that a foreclosure provides a far greater possibility of a great amount owed for debt relief.

Prior to making any decision ask your real estate professional to refer a tax advisor to you or seek out your own tax advisor. The only thing you should not do is wait.

Related Posts

• What is a hardship letter
• What is a short sale
• Life of a short sale

Downtown Long Beach Real Estate Activity For September 2007

As we look at statistics it is important to know that even numbers for an entire city may not give a clear picture of what is happening. Long Beach is a city of just about 500,000 people. Now within this fine city there are different neighborhoods, different homes, different communities. So we of course have different results in each are of the city. Today we are going to cover Downtown Long Beach.

Downtown Sales Activity for September 2007

• Total Active Properties as of October 1st - 517
• Total In Escrow Properties - 38 ( 15 Backup, 23 Pending)
• New Listings - 102

So what does all of this mean?

• Downtown is 22.8% of all active properties that are available in the city of Long Beach
• Downtown Long Beach is only 20.4% of all properties that are being sold - this may now sound like a big different but it can become one extremely fast.
• Downtown Long Beach has a 13.6 months supply of homes - this is well into a buyers market for time frame.
• So if you are a buyer make sure you look at what you really want if you are in downtown. Look at properties online with your real estate professional and pick the ones you want to see. There are quite a few properties out there to choose from but only a few that probably meet the majority of your requirements.
• If you are a seller in downtown make sure your property is priced appropriately and make sure that it is clean and presentable at all times.

The Truth about Nonjudicial Foreclosures

With all the bad news in the media about the housing market and foreclosures, it might be helpful to know that there is a difference between a judicial foreclosure and a nonjudicial foreclosure.

In a nonjudicial foreclosure, know as a “trustee’s sale,” the trustee exercises the power of sale given by the deed of trusst. Nonjudicial foreclosure is cheaper and faster then judicial foreclsure because it does not have to be looked over by the court system. In addition no appraisal or judicial determination of fair value is required and the debtor has no postsale right of redemption. The creditor may not seek a deficiency judgment.

Further, if there is no irregularity in a nonjudicial foreclosure sale and the purchaser is a bona fide purchaser for value (defined as: one who pays a valuable consideration, has no notice of outstanding rights of others, and acts in good faith concerning the purchase) a large difference between the value of the property and the sales price is not grounds to set aside the sale.

If you choose a nonjudicial foreclosure and the lender chooses to bid, the lender does so in the capacity of a purchaser. The only distinction between the lender and any other bidder is that the lender is not required to pay cash, but is entitled to make a credit bid up to the amount of the outstanding indebtedness. The purpose of this entitlement is to avoid the inefficiency of requiring the lender to tender cash, which would only be immediately returned to it.

If you want more information check out ww.abanet.org/rppt/cmtes/rp/i4/ waldman-Uniform_Nonjudicial_Foreclosure_Act.pdf

The Reality of Foreclosures in Long Beach

As many people search the web for "Foreclosures" or Short Sales to find that beach home for $200,000 or respond to the ad for "Buy a home for $1,000" it is important to realize the reality of the market.

1. If the Naples Island Home or Belmont Shore Home is available for $200,000 instead of $2,000,000, the general public (including realtors) won't get access to the deal. Investors who have relationships with banks often buy notes from the bank, but rarely could they even get a home for 10 cents on the dollar.
2. You can buy a Foreclosure property using a real estate broker! Yes, they are listed on the MLS and it takes a little digging to find them, but ask your real estate broker for what is available. The banks like prepared offers so make sure to include your FICO scores, pre-approval, and proof of funds.
3. Closing Costs - With a well prepared offer, you can get the bank to help you with your closing costs if it is a Foreclosure that is on the MLS. They may not give you all of your costs, but they certainly may help, especially as they are selling the property "as-is" they might help to get you in the door!
4. Buying at the Court house - Yes you can purchase a foreclosure at the court house steps when it goes to auction, but remember these are cash purchases! You don't get an inspection period so be prepared and remember to contact your Title Officer ahead of time so you can find out if there are any other liens on the property.

Looking for the deal can be a challenge, but having a professional real estate broker, title officer, and lender can sure make it a much more enjoyable experience. Make sure you learn as much as you can so you can make your purchase one that is filled with success!

North Long Beach Real Estate Results for September

The northern part of Long Beach is referred to as North Long Beach. This is an area of town that borders the cities of Compton, Carson, and Lakewood. This area can be easily reached by the 91 or 710 freeways. So what is happening in this area of town? Well let's take a look at the numbers to see. The chart to the left shows the activity level. The largest bar represents the number of active properties and the second largest bar is the number of new listings that have been taken in the area since the first of September and ending at the end of the month.

North Long Beach Real Estate Statistics for September 2007

• New Listings - 96


• Properties in Escrow - 31 ( 28 Pending, 3 Backup)


• Expired Properties - 57


• Total Active Listings at the end of Setpember - 426

Ok so what does this all mean. Well it means that North Long Beach has over 13 months supply of homes. This would mean that the market is Long Beach is a buyers market. There is certainly plenty of properties to choose from. Some properties are in turnkey condition but many are in need of repair. This represents ample opportunity for first time home buyers looking to buy a property that needs some work or investors who are looking to provide quality housing on a flip. Many properties have lots that could allow expansion of properties creating additional value as well.

Long Beach Real Estate Results for September 2007

OK the results are in for the city of Long Beach. These are the market numbers for the entire city.

All data comes from the Realtors MLS system that covers the city of Long Beach which is SoCalMLS. If property was sold outside of this system it will not be reflected in these numbers.

So here we go!

September 2007 Real Estate Market Statistics for Long Beach

• Total Active Residential Properties Available as of 10/1/2007 - 2,262
• In Escrow Properties ( Pending & Backup) - 186 ( 117 Pending, 69 Backup)
• Expired Properties - 244
• New Listings in October - 488

OK so what does all of this mean?

• Well if you use the months of inventory barometer. That is the statistic that says how long would it take to sell all the homes currently on the market if no new homes came on. At the current pace of homes sold in Long Beach that would be 12.16 months of supply or just over 1 year. It should also be noted that two areas of the city (Downtown Long Beach and North Long Beach) hold almost 50% of the cities inventory and do not make up 50% of the city in size or population.
• Homes are selling. In fact 186 people got their properties to be sold.
• Homes are expiring or coming off the market. This is happening for a variety of reasons the main one being the price being asked did not get to a point where a buyer could afford or was willing to purchase the property.
• New properties are coming on the market. If you didn't see anything in the past you liked 488 new opportunities came on for you to take a look at.

Please don't hesitate to let us know what you think.