Mike’s Real Estate Show

We are in a county of roughly 430,000 in Northern California and our local Realtor Association, as well as other independent and large franchises, have been running full page ads and appealing to the advertising folks at our local daily to speak with “editorial” about the profusion of articles on real estate, lending, and now appraisers. The advertsing folks have been very forthcoming and are volunteering free ad space for opinion pieces within the “real estate section”. The editorial folks have allowed letters to the editors from our ranks and a larger editorial by our President-elect here in Santa Rosa. Read the rest of this entry »

I don’t think you want to be selling your home, say, in Orange County, California, with an “Impeach Bush” sign in the front yard. Or maybe that’s WHY you’re selling your house in Orange County!! Read the rest of this entry »

Interesting forecast and number: 38%. Not 35% or 40% but 38%! I would love to see their assumptions to arrive at such an exact number. My criterion for price drops centers around the “shaking out” of the loan debacle. We just had Chris Thornberg of Beacon Economics, formerly of the Anderson School at UCLA; speak at a breakfast here in Sonoma County. His take is the mortgage implosion will bring down the house of cards buoyed largely by unsustainable lending which originated in the past three years.

The height of the “re-casting” of these loans will be third quarter of 2008. So 2009 will be a very interesting year!! . He is predicting a 35% drop from the high of the market which matches the date set by Fortune. However, this is centered in the price segment where the largest incidents of unscrupulous “incentive based” lending occurred and that price point for Sonoma County is $400-$750,000. Mr. Thornberg’s record for predictions is very, very good. He stated further we have a 75% chance of a recession at this time. On the flip side, the California Assoc. of Realtors chief economist, Leslie Appleton-Young, is predicting 4% fall in prices next year. I think what we have here are the two “extremes”! Leslie is in fairytale land and Mr. Thornberg has California falling into the ocean!  In our area we’ve seen some neighborhoods unaffected and some with 20-30% price drops!  I think making One million dollar offers on two Million Dollar homes is a bit silly and very paranoid but 20-30%? Who knows? In lovely Marin you’d get laughed out the door with anything BUT a full price and sometimes OVER bidding! Why? Resources, supply and demand, location, location, location!
  Seek out your LOCAL Realtor, get LOCAL data and make an offer based on this LOCAL information. The “Cheerleaders” we now have in our industry are doing just as much damage as those predicting Armageddon!! As usual we have middle, realistic ground which needs to be sought.

Buying a house now in foreclosure—How do I get inspections done or find out just what I’m buying??
    Many properties going TO foreclosure or “Sale” are NOW on the market so getting into them might not be that hard. If this is possible then get your contract or inspector out there. While you’re at it a pest control report and maybe structural engineer, septic, well, etc. Obviously depending on WHAT type of property you are attempting to purchase in the forelcosure sale.

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What Condo and Home Owner Association fees (HOA) funds represent. I had a friend who had his HOA dues increased dramatically due to a lack of funding for deferred maitenance. His complex, an older, not very well built community, needed all new siding, repair of massive dry-rot and roof work. What drew him to the units was their lower HOA fees. They had to float a new bond in the complex and to make matters worse, the contractor they used to do the work went belly-up and they lost over 1/2 the funds for repairs!
  I do agree with you that many NEW complexes are woefully underfunded simply as a marketing ploy for new homeowners. When they are selling the units they all look stunning, landscaping is brand new, pools sparkle, but all of these items need MAITENANCE!!! You also run into very high INSURANCE fees especially when pools are present.
  You need to get many months of past meeting MINUTES, and BUDGET talks! You’ll be able to find if any issues are brewing. In our area we at one time had 8 out of 10 complexes in law suits against the original builder for defects in construction. Many had to do with tar and gravel roofing, decks over garages, etc and siding! Even though the homeowner’s settled– the law suits made the properties virtually unsaleable during the process as most lender wouldn’t touch them with anything less than 20% down. Since most were “affordable and mid market condos” they went begging for buyers for years!
  What to look out for? Older complexes with NO recent, major work performed, lower than normal homeowner’s dues, current lawsuits or brewing storms of such coming down the pike!! I even had a friend who owned a condo in Hawaii get hit with a new “land lease” rent which was 10 times the original!!
  For new complexes you need to check with neighboring complexes. Stop and ask homeoners of the other units how much they pay. Any issues in the area? In a heavily condo populated area I’d be also very wary of price and absorption rates. Auctions in the area are NOT good for long-term stability!

Shark Alert!! If you are currently in the “Notice of Default” stage of the foreclosure process be aware of those who would take advantage of your situation. You’re going to be getting all sorts of post-cards from those stating they are “work-out” artists who can some how save your credit, get your home sold quickly and maybe even allow you to stay in your home as a renter or with a “rent-to-own” situation.  BE VERY CAREFUL with these individuals!  Read the rest of this entry »

A Seller asked me over the phone if I’d cut my brokerage fee to 2.5% total fee. My response:

 if the FIRST THING your Realtor/Licensee does is reduce their fee, how do you think they will handle protecting your PRICE? Read the rest of this entry »