Tuesday, November 27, 2007

6 Tips to Know When Purchasing Foreclosures

The common vision of purchasing a foreclosure property (also known as REO or Bank Owned) is purchasing a home at pennies on the dollar in the most desireable area possible. The reality of purchasing a foreclosure is quite a bit different and needs to be understood. Here are some tips to consider if you are looking for a foreclosure:

  1. You DON'T have to pay for a service like realtytrac if you don't want to
  2. Foreclosures are listed in the traditional Long Beach MLS
  3. Foreclosure properties are sold as-is, meaning what you see is what you get
  4. Banks often penalize you (from $100+ a day) if you go over the period that you agreed upon for the escrow period (so be prepared to get that escrow done in 30 days! :) )
  5. Foreclosures that make it to the general public are generally not in high-end luxury communities but can be in some pretty nice neighborhoods
  6. Strong discounts of 10-20% of retail can be expected but don't expect to get one for 10 cents on the dollar

Have fun searching for foreclosures as you can get some great deals on them, but just be aware of what you are getting into.

Monday, November 26, 2007

The benefits of Arbitration for Real Estate Transactions

The outcomes in arbitration are the same as in court. Studies indicate that individuals prevail at a rate that is greater than or equal to litigation in similar suits.

In addition, arbitration is significantly less expensive than court.
Filing fees for consumer claimants start at $25 for smaller claims. (The
initial filing fee and the case service fee are based on the size of each
party's claim or counterclaim and range from $500, for claims or
counterclaims up to $10,000, to as much as $65,000 for certain claims
greater than $10 million. Therefore, whether or not a party would save
money would depend on the amount of the alleged claim) The case service fee for these cases ranges from $200 to as much as $6,000. The maximum fee amount
for filing is less than the filing fee that an individual plaintiff would
be required to pay in many trial courts. In many cases, the simplified
procedures enable individual parties to proceed without the need to engage
and pay an attorney.

Arbitration avoids the risk of erratic jury verdicts and awards. Jury
verdicts may sometimes side with a tenant or layperson over a business
regardless of factual basis.

Further, arbitration decisions are fair. All National Arbitration Forum
decisions are made by independent and impartial arbitrators who are
experienced legal experts. Arbitrators are former judges or attorneys.
(See www.adrforum.com/)

Arbitration proceedings often can be kept confidential. The
confidentiality provisions in arbitration agreements protect companies and
employees from public disclosure of falsehoods and damaging statements.

Arbitration rules are generally more flexible than trial. For example,
you can elect the type of hearing that is most appropriate for any
particular dispute. Parties can appear in person, by telephone or by
documents. This allows an individual to save the expense of missing work
and/or traveling.

Arbitration is faster than trial proceedings. California consumer
arbitration outcomes shows a median case duration of 4.35 months for
arbitration claims brought by individuals. Court litigation durations
generally take one year or more before trial.

Arbitration decisions are legally enforceable. All arbitration
decisions are approved by a judge before becoming a legally enforceable
judgment. A losing party has the right under the law to challenge or seek
to vacate an arbitration award before a judge. A winning party has right
to seek to confirm an arbitration award into a civil judgment.

Saturday, November 24, 2007

What is a Real Estate Short Sale?

In today's changing real estate market we hear the word short sale used many times. In fact the word is used by both real estate professionals and home owners. Often times the definition of what a short sale is is not clear. It is critical that all parties understand what a short sale in real estate is.

We thought we would define a short sale and give an example so that everyone knows what it is.

A short sale is where a property is being sold for less than the total amount that is owed to all lien holders on the property.

So in other words if the property cannot be sold without the seller, the bank, or someone on the selling side having to take a loss or bring money into escrow to close the transaction it will be a short sale. Short sales are most often done with a bank and that is what we will cover here.

An example of a short sale:

  • Loan 1: $300,000
  • Loan 2: $50,000
  • Total Value of Property: $315,000

So in the above example the property is at least $35,000 short of what is needed and that does not take into account real estate commissions and other fees necessary to sell a property. This is what is considered a short sale where the home owner will go to the bank to ask for assistance.

Wednesday, November 21, 2007

Long Beach Rescue Mission Can Still Use Help

For the past two weeks the Long Beach Broker tour, that meets at Khoury's Restaurant on Thursdays, has been collecting cans for the Long Beach Rescue Mission. The Long Beach resuce mission helps more than 4000 homeless men, women, and children here in Long Beach. Each week the local real estate brokers have been able to collect flats and flats of vegetables for the upcoming holiday.

One of the local real estate teams, the Shapiro Group, has been donating their time at the shelter and lead the way to the donations. Even with this help and some wonderful help from the community the Long Beach Rescue Mission could still use additional help. Whether it is making a donation, donating cans, or donating your time, the rescue mission can still use the help.

Tuesday, November 20, 2007

To Flip or Not to Flip....?

Todays BLOG post was contributed by Kristi Cirtwill

In the last few years, investors who have bought properties, fixed them up and sold them for a profit (otherwise known as “flippers”) have had a great opportunity. Even if the project took more time than anticipated, the flipper had an appreciating market to work with. In many cases, multiple offers would come in on the property, sometimes resulting in bids over list price. If you were a flipper in the last few years, you almost couldn’t go wrong!

However, as we all know, markets do change! We have entered a period where we are in more of a buyer’s market (more sellers than buyers = a buyer’s market). We are experiencing a bit of a slow down in terms of how fast properties are moving and what price sellers are actually fetching for their homes. The media plays an interesting part in all of this too of course….(but that is a topic for another blog….)
So what does this mean for the flipper? Are his rehabbing days over? How can he possibly make any money flipping houses in this kind of market?

Well, I believe that anyone can make money in real estate investing in an appreciating market. The true investors will prove themselves in ANY kind of market. Here are a few tips I will offer to investors who still want to participate in the wonderful world of flipping:

  • BUY RIGHT! It is true when they say you make your money when you buy. Well, this is CRITICAL in this market. When you are determining what your house will sell for after you rehab it, determine what the market will bear 6 months down the road, then subtract 5-10% to be conservative! Then base your purchase price on whatever numbers will work for you, to be able to unload the property quickly at an attractive list price.
  • GET IN AND GET OUTThe rehab should take no more than 4 weeks MAX. The faster you can rehab, the faster you can unload your property. Get your construction crews set up in advance and find out what they’re capable of doing, so you can move fast.
  • LIST WITH A REALTOR – Unless you have a huge database of buyers, why go through the hassle of listing the property yourself? If you’re buying right, you should be budgeting the realtor fees in when you sell. Have the agent do the work for you to show the property and follow up with potential buyers. This will free up your time to move onto your next deal.

I believe flippers can make money in any kind of market, as long as they know what they’re doing! More investing tips to come…..

5 Must Know Items when Purchasing a Short Sale

With short sales, also known as Pre-foreclousres, there is opportunity and sometimes some frustration. As this type of purchase is still relatively new there are some growing pains for both buyers and real estate professionals. Here are 5 tips to help you get through a short sale purchase.

  1. Number of Offers on the Property - If there are multiple offers on the property, is the agent going to have his sellers sign off on 1 of them to start working on that particular offer with the bank? This is key, because if they submit all of the offers to the bank, you have no security in knowing if you are going to have the opportunity to get the property.
  2. Experience of Agent - No, I don't mean the number of years they have been in business or their age! If they have not completed numerous (hopefully more than a 1/2 doezen at this point) short sales on both the purchase or the listing side, be aware that it will be a bumpy ride.
  3. Lien Holders - Is there just 1 bank that has a note on the property or are there 2? This can make the most dramatic difference in how long it takes to get your purchase approved from the bank. The best odds are when there is just 1 bank.
  4. Closing Costs - Realize that most banks are not allowing closing cost back to the buyer. When they are allowing closing costs, it is in general about 1% of the purchase price of the property, although this is largely dependent on what the offer price is on the property.
  5. Offer Price - At this point, you aren't going to get a home for 50 cents on the dollar. Successful buyers are getting short sales approved at 90% of the BPO amount. The BPO (Brokers Price Opinion) is what a real estat broker has evaluated the fair market value of the property to be.

Keep these tips in mind when purchasing a short sale. Short sales can be a great opportunity to save money on the home that you want.

Monday, November 19, 2007

Large Amounts of Equity Available even with Price Drops

With all of the doom and gloom in the real estate market it appears that when the media trys to demonstrate some of the positive aspects of the market it often gets missed. Kenneth R. Harvey, of the Washington Post Writers Group was recently published in the LA times with his article, "Price drops are sobering, but the big picture is still rosy".

Here he accurately covers that although there have certainly been price declines, there is substantial liquidity in the market. This is evident in the fact that there is still a large equity position that the many owners have. Here some some of the facts from his artcile:

  • Federal Reserve calculated that U.S Homeowners equity accounts total 10.9 Trillion
  • In areas like Fort Myers of Florida where they have experienced a 130% jump in the last 5 years, where prices have recently dropped almost 14% still means they are up 116% in the same time period
  • Home Builders in Los Angeles state prices fell 5.7% in the last 12 months, but that still means they are up a net 88.9% since 2002

Data like this is often hard to find....why? Does the mainstream media like to sell ads so badly that they instill panic when it isn't well founded? Let's hear your thoughts.

Protecting Your Credit During Divorce

This post was contributed by Christal L. Dunn

When a marriage ends in divorce, the lives of those involved are changed forever. During this time of upheaval, one thing that shouldn’t have to change is the credit status you’ve worked so hard to achieve.

Unfortunately, for many, the experience is the exact opposite. Unfulfilled promises to pay bills, the maxing out of credit cards, and a total breakdown in communication frequently lead to the annihilation of at least one spouse’s credit. Depending upon how finances are structured, it can sometimes have a negative impact on both parties.

The good news is it doesn’t have to be this way. By taking a proactive approach and creating a specific plan to maintain one’s credit status, anyone can ensure that “starting over” doesn’t have to mean rebuilding credit.

The first step for anyone going through a divorce is to obtain copies of your credit report from the 3 major agencies: Equifax, Experian®, and TransUnion®. It’s impossible to formulate a plan without having a complete understanding of the situation. (Once a year, you may obtain a free credit report by visiting www.AnnualCreditReport.com.)

Once you’ve gathered the facts, you can begin to address what’s most important. Create a spreadsheet, and list all of the accounts that are currently open. For each entry, fill in columns with the following information: creditor name, contact number, the account number, type of account (e.g. credit card, car loan, etc.), account status (e.g. current, past due), account balance, minimum monthly payment amount, and who is vested in the account (joint/individual/authorized signer).

Now that you have this information at your fingertips, it’s time to make a plan.

There are two types of credit accounts, and each is handled differently during a divorce. The first type is a secured account, meaning it’s attached to an asset. The most common securedaccounts are car loans and home mortgages. The second type is an unsecured account. These accounts are typically credit cards and charge cards, and they have no assets attached.

When it comes to a secured account, your best option is to sell the asset. This way the loan is paid off and your name is no longer attached. The next best option is to refinance the loan. In other words, one spouse buys out the other. This only works, however, if the purchasing spouse can qualify for a loan by themselves and can assume payments on their own. Your last option is to keep your name on the loan. This is the most risky option because if you’re not the one making the payment, your credit is truly vulnerable. If you decide to keep your name on the loan, make sure your name is also kept on the title. The worst case scenario is being stuck paying for something that you do not legally own.

In the case of a mortgage, enlisting the aid of a qualified mortgage professional is extremely important. This individual will review your existing home loan along with the equity you’ve built up and help you to determine the best course of action.

When it comes to unsecured accounts, you will need to act quickly. It’s important to know which spouse (if not both) is vested. If you are merely a signer on the account, have your name removed immediately. If you are the vested party and your spouse is a signer, have their name removed. Any joint accounts (both parties vested) that do not carry a balance should be closed immediately.

If there are jointly vested accounts which carry a balance, your best option is to have them frozen. This will ensure that no future charges can be made to the accounts. When an account is frozen, however, it is frozen for both parties. If you do not have any credit cards in your name, it is recommended you obtain one before freezing all of your jointly vested accounts. By having a card in your own name, you now have the option of transferring any joint balances into your account, guaranteeing they’ll get paid.

Ensuring payment on a debt which carries your name is paramount when it comes to preserving credit. Keep in mind that one 30-day late payment can drop your credit score as much as 75 points. It is also important to know that a divorce decree does not override any agreement you have with a creditor. So, regardless of which spouse is ordered to pay by the judge, not doing so will affect the credit score of both parties. The message here is to not only eliminate all joint accounts, but to do it quickly.

Divorce is difficult for everyone involved. By taking these steps, you can ensure that your credit remains intact.

Friday, November 16, 2007

How Many Condos Sold in LA County?

Earlier in the week we gave a chart of how many homes had sold in Los Angeles County. Now Los Angeles county is a rather large area and covers many different cities. Today though we thought we would chart what is happening with condos in Los Angeles County. Not all cities have condos but many do as a result of the density of population of the area that we live in here in Southern California. While there is no list of all cities that have condos a few of the cities that have condos in Los Angeles county are as follows: San Monica, Redondo Beach, Torrance, Marina Del Rey, Long Beach, Signal Hill, Norwalk, Cerritos, and Lakewood. Now keep in mind this is not a complete list but it still shows that within Los Angeles County there are plenty of cities that have condos that people can purchase.

From the chart we can see a few things.

  • Sales of condos are not as far off as those of homes. We believe the reason for that is affordability. Condos tend to be far more affordable than homes.
  • Less condos are being sold than 2007 and probably less condos will sell in 2008 but that does not mean that prices are decreasing. The affordability of condos allows owners to possibly rent them out and retain ownership.
  • What doesn't show up in the chart is there are still many new brand new condo buildings being built and condo conversion projects that will keep interest in the condo product.

Condos are still selling and even if less condos are selling there are less homes being sold but the values are not decreasing by 100% or falling back to prices in 2001 as some have said.

Wednesday, November 14, 2007

How many homes are selling in Los Angeles County

Everyone has been reading about what is selling and what is not selling but it is still hard to find out just how many homes have sold. Most cities within Los Angeles county have seen the demand for property drop. Overall rates have not shifted significantly from last year. It is still a great time to purchase when you look at where rates are historically. With that said the number of homes sold across Los Angeles County is down.

We thought we would chart for everyone the sales for the last couple of months of homes sold. This data comes from what has been recorded and does not include condos which we will include tomorrow.

So what does this chart tell us. It tells us a few things for sure.

  • August 2007 sales are off slightly more than 42% from the same month as last year.
  • September 2007 sales are off 57% from the same period as last year.

These numbers are quite sobering. 2006 was already a year that was down from the previous records and we are off well 2006 pace. The good news in this is that to borrow money and to use first time home buyer programs is still a great opportunity. If you are selling consider your listing price carefully and make sure that you are committed to selling your property. Understand as a seller the easier you make it for the buyer to purchase your property the easier everything will be.

Saturday, November 10, 2007

Buying Your First Home Just Got Easier!!

Todays post is contributed by Christal Dunn

We understand how much you want to own your first home. We also realize how difficult that can be. That is why we offer below market interest rate first mortgage programs and a variety of down payment assistance programs to eligible first-time homebuyers, which can turn your dreams of homeownership into reality. For those who qualify, CalHFA programs are a great way to get started on the path to homeownership. With below market interest rates, which may be combined with “silent second” down payment assistance programs to offer complete financing for your big move.

These programs are available for eligible low and moderate-income first-time homebuyers for both new construction and resale loans in all 58 California counties. Here’s how’s we can help:

  • A 100% CalHFA loan with a fixed rate
  • A 3% Assistance Program (CHDAP for additional down payment and/or closing costs (for eligible buyers)
  • A combined loan-to-value of up to 103%-107% (subject to credit approval)
    Purchase only loans
  • Single-family homes. PUD’s and eligible condos are permitted
  • Manufactured homes may be eligible (special terms and conditions apply)
  • Borrower must be a first-time homebuyer, unless home is in a federally designated Target Area (call for details)

    CalHFA FHA Loan

    Purchase Price of Home $ 250,000.00
    CHAP - Down Payment ONLY $ 7,500.00
    HiCAP - Down Payment ONLY $ 7,500.00
    Total "Silent" Loans $ 15,000.00

    FHA Loan Amount $ 235,000.00
    Principal & Interest $ 1,371.40
    Property Taxes $ 260.42
    HOA - Assumption $ 200.00
    PMI $ 97.92
    Total Monthly Mortgage Obligation $ 1,929.73

Once you take into account the tax benefit of ownership this amount is extrememly close to rents. Take time and consult your lender so you can see what is possible. Bank of America has been particulary helpful with showing our clients what FREE money is available.

Friday, November 09, 2007

Most Expensive Home in Park Estates?

Luxury homes in Long Beach have held their value fairly well even with the pricing pressure that has faced the entire market. Long Beach has not be known to have the same pricing as places like Manhattan Beach or Palos Verdes, but a new home listing here in the coveted Park Estates tract is setting a new benchmark for pricing in Long Beach that doesn't face the Ocean.

This Long Beach home on Bryant Road, listed at $8,400,000, is a must see for that unique buyer looking to have a quiet estate here in Long Beach. Here are some of the highlights of this estate:

  • 6 bedrooms, 9 bathrooms

  • 34,000 sq ft lot

  • 10,000 sq ft Home

  • 8 car garage

  • Guest quarters

  • Tennis court

  • Pool and spa

For those not familiar with Park Estates it is a quiet area by CSULB with large tree lined streets. As you are looking for estates in Long Beach, you will want to put this one on your list(you can view more details using the Long Beach MLS). If you do wander by this property we would love to hear your thoughts, and hey, if you have the $8,400,000 to spend would this be on your list?

Thursday, November 08, 2007

Long Beach Business Growth strong with New Noah's Bagels

Business growth in Long Beach continues to be a bright point in the overall economy. It is always a good to note when office space continues to get leased, especially when you see it is an established business moving into the neighborhood.

Noah's Bagels is opening a store here in the Los Altos area. The location is so new you won't even find it on their website :). If you happen to drive along Bellflower Blvd, near the Los Coyotes Diagonal (by Farmers and Merchants bank) though you will see their sign is up and they will shortly open for business. Noah's has locations in the Southbay and in Orange County so it is nice to get a location here for Long Beach!

We hope you enjoy supporting their new location and if you notice other new businesses coming in here to the city we hope to hear about it from you.

Wednesday, November 07, 2007

Long Beach Statistics for October 2007

As a seller it is important to know who you are competing against or how many homes and condos that you are competing against when you list your piece of long beach ca real estate.

So what has been happening in Long Beach the past 3 months? Well the chart above shows the last 3 months of new listings compared to sold inventory. Just over 400 homes and condos are listed every month in Long Beach. Less than 200 are sold every month and as we get closer to Christmas the number of sold properties will get to around 150 properties. Also of note is the fact that at the time this is being written there are 2,167 active properties in the city of Long Beach. At the moment Long Beach has about 12 months of inventory available. This is not where we would like to be.

The heavy inventory areas, where buyers have more choices, are North Long Beach and Downtown Long Beach.

They key thing is to know how many homes are listed or available for sale within 1-2 miles of your property as that is where buyers are going to be looking. Also make sure the properties are of similar size and price as those are the ones that buyers will be looking at before deciding their purchase.

Tuesday, November 06, 2007

Find "the deal" on your Long Beach real estate

As you are searching through the Long Beach MLS there are values to be found on Long Beach real estate, but how do you determine what is a good value and what isn't? If you are still early on in your research you may not want to contact a Long Beach realtor yet and that's ok, but you still want to understand what is a "good deal". Here are some tips so you can recognize the good deals!

  • Use a Free Long Beach MLS

  • Monitor a specific area ( i.e. Alamitos Beach)

  • Monitor a specific configuration (i.e. 1 bedroom and 1 bathroom)

  • Monitor a specific price range (i.e. under $275,000)

  • Write a checklist of what is important to you (garage, sq footage over 580 sq ft, etc)

Once you have these items complete you will be able to track properties that have such specific criteria you will be able to determine what is a good deal and what is an average deal. If most of the properties in Alamitos Beach are $250,000-$275,000, having 1 bedroom and rarely a garage, then you know that is the average. Then when a property comes out that is 1 bedroom, 1 bathroom, with a garage for $227,000 you know it is a good deal!!

Keeping track of the traditional inventory will help you to spot the deal on your own and then you can contact a realtor at your convenience. If you did this today in Alamitos Beach, you would find there is just 1 condo at $227,000 with a garage :). Happy hunting!

Bank Owned Properties Directory...

is a cool source I found online that produces a list of bank owned properties. There's been so much clatter this past year about NOD's and REO's that I thought this was a very interesting and valuable tool to share with everyone.

Here's an example of a Countrywide listing in Torrance:

TORRANCE , CA 90503 SFR JACK POWER 310-748-3704
request info $609,900

Christian Stefferud
866.4MY.TITLE ~ 866.469.8485

Monday, November 05, 2007

Queen Mary Lease is Almost Complete!

Save The Queen group is now closer to taking over the Queen mary. As the group that currently operates the Queen Mary, Queen's Seaport Development Inc, declared bankruptcy 2 years ago the Queen Mary is definitely need of new leadership to continue to make this a landmark property for the area.

After passing another hurdle in bankruptcy court by agreeing to a buyout of the group AAC's claim that it was owed $500,000 the Queen Mary property seems to be much closer to a new lease on life.

What do you want to see developed at the Queen Mary site?

Saturday, November 03, 2007

Discounts are to be had on Short Sales

There are bargins to be had on purchasing short sales, but they may not be as much as many buyers perceive. Making an offer on a short sale requires patience by the buyer, but you can be rewarded with a discount. It can take anywhere from 30-60 days to be notified that your purchase has been approved. Here are some items to consider that the bank may come back with:

  • Property will be sold as-is
  • In a condo, the buyer may have to pay for their own HOA documents
  • In a home they may not pay for any termite work that is required of Section 1
  • Currently the banks are giving up to a 10% discount from the BPO (Brokers Price Opinion) of the property, which is used to determine market value.

It is important to understand that when making an offer on a property that will be a short sale to have an understanding of where your offer will have some success. Making an offer that is 50% of the list value of a property probably won't have success. Have your realtor help you understand what the market value is and offering a discount on that can help you to succeed!

Thursday, November 01, 2007

Lennar Needs to change Plans for SeaportMarina Hotel Location

Lennar has now pulled it's plans for replacement of the SeaPort Marina hotel off the table. The proposed mixed use project that was to bring 425 lofts and townhomes will have to be substantially re-wored according to the article featured in the Grunion Gazette.

Although many always cry out that it is the city of Long Beach slowing development, in this case there are many parties involved. IN this case Gary DeLong, 3rd District Councilman, and the California Coastal Commission both have raised issues of concern on the proposed project.

Many Long Beach residents will be happy to know that a major concern of the plan is to truly understand impact on the environment as well as the traffic congestation on 2nd and PCH. With this delay it looks like we will still be some years away before we see a new structure replacing the Seaport Marina.