My awesome blog about Eagle Rock

I love where I live. Eagle Rock is a great place and I thought I would honour it in my Eagle Rock Real Estate Blog. If you're ever in The Rock, 90041 give me a call.

Whaaa??? What's this? Whispers of a Real Estate Market recovery?

For Home Buyers, The Window To Negotiate With Sellers May Be Closing
from The Mortgage Reports Blog by Dan Green

Accordig to ZipRealty, home supplies are falling in most major U.S. housing marketsIf home prices are all about Supply and Demand curves, it looks like the national recovery is well-underway -- the housing inventory is falling in most major markets.

As reported by ZipRealty, the number of single-family homes for sale nationwide declined by 1.6 percent in October.

What's most interesting about the data, though, is that healthy markets like Seattle and Chicago played as much a part in reducing national home supplies as previously hard-hit cities like Miami and San Diego.

There are a few reasons for home supply dip:

1. Home buyers are keenly aware of the negotiation leverage they have over sellers and they know how to use it
2. Banks are getting good at selling foreclosed homes

These two elements combined to help homes sell like hotcakes during what is typically a "slow" month in real estate, boding well for the housing market going forward. The figures are consistent with the other housing data from last month that showed more homes under contract and more homes selling.

But, wait. There's more!

Over the past few weeks, Chase Mortgage, CitiMortgage, Bank of America and Fannie Mae have all enacted some form of moratorium on home foreclosures. This, too, should lead to lower inventory levels because fewer homes will head for the auction block.

In every market, the value of real estate is based on scarcity.

If the number of homes for sale dwarf the number of active home buyers in that particular market, home prices are going to fall. They have to. It's basic economics. And, that's precisely what we've seen over the past few years -- home supply outpaced home demand for them.

But, based on the chart above, a series of data points from October, and the political pressure to help homeowners in need, expect for home supplies to fall in 2009, taking home buyer's negotiation leverage with it.

Andrew Jackson speaks from 1832 on what is happening in 2008!

Andrew Jackson, the seventh president of the United States, said in 1832:

"Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."


Jackson objected to the existence of a bank that had a powerful voice in national affairs yet was not responsive to the will of the people. He contended that the bank benefited only the creditor, investor, and speculator at the expense of the working and agrarian classes that produced the real wealth of the nation by their labor. The financial procedures of the commercial or moneyed class, he said, created a boom-and-bust economic cycle. When the economy was booming, the creditor was rewarded with a large financial return on his investments. When depression came, credit became scarce. Workers and farmers, who were usually debtors, had no money to pay their debts and went bankrupt. Their lands and properties were then seized by their creditors. Thus, wealth became concentrated in the hands of a few. With wealth came power and the opportunity to reinforce this beneficial position by law.
The election of 1832 was a landmark in American history because the candidates were chosen by party conventions for the first time. The Jacksonians chose Martin Van Buren to run for vice president with Jackson. The history of the Democratic Party is traced from this convention. The supporters of the bank called themselves the National Republicans. The election was centered on the bank issue, and Jackson won a second term easily. He had 219 electoral votes to Clay’s 49.

The Short Sale Myth-Reality Realty.

Hello all, this is my initial Real Estate Blog and I want to take the opportunity to thank you for reading. For anyone who doesn't know me, I am a hyper-energetic realtor based in Eagle Rock and selling all over North L.A. and the San Gabriel Valley. I am also a mortgage lender and I spend a good chunk of my time working with a non-profit organization called Operation HOPE, where I help people get out of foreclosure and save houses. I'd love to put you on my list of satisfied buyers, just give me a call at 310-709-8283.

The first topic I'll dive into is the myth of short sales. Those are properties where the sales price won’t be enough to repay the existing loan and closing costs, so the bank has to agree to take less than they are owed to make the deal work. For example, Joe Homeowner owes $650000 on his house that is being "short-sold" for $500000 so the bank is writing off $150000. After working in foreclosure avoidance for what seems like forever, and also working the other side with buyers who are trying to get into short sale properties, I have come to the conclusion that 99% of short sales will NEVER go through. Why? The bank will almost never agree to take less! They don’t care that they may make less eventually when they have to sell it as a foreclosure. They want to make an example of irresponsible sellers and make them suffer for getting themselves into such a financial pickle. If you are such a seller and need to sell, you had better be in real financial trouble-at LEAST six months behind or your short sale will not be approved. That means you can’t have any other assets, or if you do, you have to give them to the bank. They’ll transfer what you owe to another property, or they’ll take a promissory note if you don’t own any other real estate. And you almost always have to already be in default on your loan, so your credit is trashed regardless. One property that we had an offer on, Flagstar bank was demanding that the seller sign a non-dischargable (meaning bankruptcy-proof) note for not only the deficiency in the purchase price, but also all the missed payments up to that point! That short sale, like all the others, did not go through and the seller is still occupying the property.

There are many reasons why the myth of the short sale gets bargain hunting buyers foaming at the mouth. Most of them stem from the fact that most people don’t understand how they work and they advertise their property as a short sale at a very low price with no idea whether they qualify for one. To further the myth, many Realtors take them on with the same ignorance. The blind leading the blind.

So, you the prospective buyer say, what’s the harm in looking at short sales? Here’s the problem: you are wasting your time. Not just by looking at unlikely properties, but what if you fall in love and make an offer? What if it’s actually accepted—pending lender approval, of course? Then you waste even more time waiting weeks, even months to find, 95% of the time, that the lender turned the deal down and foreclosed on the property yesterday. Not only is that really frustrating, but you have a huge loss in missed opportunities. That cute little foreclosure on the next street that sold in a day. That regular sale that sold in multiple offers last week. Oh, yes, and even though the paper says that the prices are dropping, now that you’re back in the market it seems like anything that’s any good is $20,000 higher than you thought you were going to pay with the short sale.

If you’re a savvy buyer, how can you take advantage of some of the really great deals that do appear, like legitimate REOs? First, can you pay cash? Or do you have such a large down payment that your loan can be under $417,000? You are in good shape. If you already own a home that you have to sell in order to buy another, you need to put it on the market and sell it for whatever you can and be willing to rent until you find the deal you want. It’s not that difficult, there are lots of rentals out there right now. And when you’re ready, don’t be confused by the short sales you see on the market. Just ignore them and look at the homes that you have some chance of actually purchasing. If your existing agent is showing you short sales and writing offers that seem too good to be true that never get accepted you are wasting your time. I'll take you out and show you some quality properties that are actually for sale. Perhaps I will call my company "Reality Realty".