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Tuesday, July 6, 2010
Thursday, June 3, 2010
JUNE RANT: More about the CA DRE letter on short sale fraud
Ok, rebels, I think it’s time you saw another side of me.
You know me as an off-the-cuff, kinda crazy, lovably rascally rebel.
All true.
But I’d like to turn on my serious side for a minute. I think it’s important, sometimes, to get kinda serious, maybe even (gasp!) fairly rational in my arguments. And NOW is that time. You’ve heard me rant about the misinformation, logic-gaps, and rumor that exist out there in the world of real estate brokers and agents. A few weeks ago I wrote a bit about the DRE’s recent letter about short sales.
Well, I’ve been re-reading it, and I have more to say.
As a reminder, this is the California Department of Real Estate’s “Short Sale fraud Warning to Licensees”, co-authored by the DRE’s Senior Counsel and Senior Deputy Commissioner. You can get the text here.
Wow. Is it any wonder that most real estate agents won’t touch a short sale listing? Hell, even most of the brokers under whose license they work don’t really understand the ins and outs of the short sale process. Is it so much easier to present an example of a brew of multiple fraudulent or illegal practices than to give licensees a more specific list of the things that must be present than to throw together a concoction of practices that are questionable, fraudulent or illegal? I suppose it is.
So what is it that has me so wound up? Let’s start with one of my favorites, “Is a Real Estate License Required to Represent the Parties to a Short Sale?” And the DRE’s answer, “YES, with some extremely narrow and limited exceptions and exemptions.” They spend six paragraphs explaining their answer. In those six paragraphs, they devote all of one sentence to say that it is ok for the buyer to negotiate on his own behalf. Is this an attempt to drive all of this activity into the hands of licensees, or is it just an attempt to minimize the significance of the buyer in this transaction? As an investor, when I back up and look at a transaction at the simplest level, there are only two parties, the seller and the buyer. The real estate agents come in second, as those who are responsible for looking after the interests of their clients. And, by the way, insinuating that the listing agent somehow owes a duty to the lender is, in my mind, VERY dangerous ground.
As an investor, I insist on negotiating with the lender myself. And why not? It makes no sense to me to leave that in the hands of either the seller or their agent, neither of whom have my interests in mind. And yes, I am always represented by a licensed real estate agent in these transactions, one who understands them. But I talked about this last time, so I won’t keep beating away at that point.
There’s plenty more to tick me off in the letter.
There’s what appears to be a “tip of the hat” to the poor lenders. Yes, the same people who hold out a hand in the form of a short sale but make it so difficult and inefficient that most buyers lose interest before an approval is obtained. Why is it that only an estimated 20-25% of short sale approvals actually close? These are the same "poor" lenders whose collection tactics manage to milk the last dollar of savings from people on fixed incomes, knowing that they will never be able to resume a normal payment. They know this because they already have their financial information. And the best one of all? Some of these poor lenders are actually talked into believing that the property in question has a much lower value that it actually does. This type of “fraud” really has to stop. To suggest that all offers should be sent to the lender is absolutely ridiculous. It seems to me that once I enter into a contract with the seller, continuing to accept offers to pass on to the lender is a blatant violation of California law.
The “fraud” here really is that the authors actually know something about the short sale process. The lenders choose their own method for determining the value of a property, whether it be through BPO’s or appraisals.
I have a message about the lenders:
Stop trying to make like they’re the underdogs here, so easily duped!!
THEY ARE READY TO TAKE YOUR HOME FROM YOU. In the end, their only concern is that a short sale will result in less of a loss than a foreclosure. IT’S A BUSINESS! They really don’t give a tinker’s damn about the people making their home there.
And don’t get me started about the references to the listing agent’s responsibility to the lender. Assuming the listing agent is in compliance with the B & P Code, that agent is there to affect the best outcome for the homeowner. The lender isn’t mentioned anywhere in the contract. In the case of a short sale, the homeowner has elected to sell their home rather than have it taken away from them. It is the lender’s choice to offer that option and it is done on their terms, not the agent’s, homeowner’s or buyer’s.
As an investor, I regularly negotiate with a lender for a short sale price and flip it for a profit. I don’t allow anyone else to negotiate for me, certainly not the seller or their agent. Before I engage, I make it quite clear that my intention is to sell it for a profit and that neither the seller nor the listing agent will be paying a fee. It’s my money, after all, that’s being spent. And while the DRE is busy looking for fraud being perpetrated by investors, they turn a blind eye to the common practice of lenders demanding promissory notes to approve short sales. When this is routinely done, even in the case of a non-recourse loan, knowing that they can “hold up” the homeowner whose only other choice is foreclosure, THIS is unethical. But I somehow doubt that the DRE is going to scrutinize this practice, perpetrated by their friends the lenders. And while nothing will justify fraudulent practices, the inference that the practice of short sale flipping is harmful to the community completely ignores the negative impact that the sea of foreclosures we see is far more damaging, to the homeowner and the community.
The federal government continues to implement ineffective programs to assist those who find themselves facing foreclosure. In the meantime, the lenders continue, unencumbered, with their predatory practices. It’s time we start insisting that our state representative do something about these practices.
I, for one, intend to speak with both my state senator and assembly representative to enact legislation that prevents these practices and makes the LENDERS accountable when they violate them. The practices of making a short sale contingent upon the signing of a promissory note for a portion of the balance, or what amounts to deed restrictions limiting the resale of the property have got to stop. Is anyone in Sacramento paying any attention to what the lenders are doing???
Come on, people!
Wheeew. I think that got my blood pressure up!!
Stay rebellious!!
-Larry
You know me as an off-the-cuff, kinda crazy, lovably rascally rebel.
All true.
But I’d like to turn on my serious side for a minute. I think it’s important, sometimes, to get kinda serious, maybe even (gasp!) fairly rational in my arguments. And NOW is that time. You’ve heard me rant about the misinformation, logic-gaps, and rumor that exist out there in the world of real estate brokers and agents. A few weeks ago I wrote a bit about the DRE’s recent letter about short sales.
Well, I’ve been re-reading it, and I have more to say.
As a reminder, this is the California Department of Real Estate’s “Short Sale fraud Warning to Licensees”, co-authored by the DRE’s Senior Counsel and Senior Deputy Commissioner. You can get the text here.
Wow. Is it any wonder that most real estate agents won’t touch a short sale listing? Hell, even most of the brokers under whose license they work don’t really understand the ins and outs of the short sale process. Is it so much easier to present an example of a brew of multiple fraudulent or illegal practices than to give licensees a more specific list of the things that must be present than to throw together a concoction of practices that are questionable, fraudulent or illegal? I suppose it is.
So what is it that has me so wound up? Let’s start with one of my favorites, “Is a Real Estate License Required to Represent the Parties to a Short Sale?” And the DRE’s answer, “YES, with some extremely narrow and limited exceptions and exemptions.” They spend six paragraphs explaining their answer. In those six paragraphs, they devote all of one sentence to say that it is ok for the buyer to negotiate on his own behalf. Is this an attempt to drive all of this activity into the hands of licensees, or is it just an attempt to minimize the significance of the buyer in this transaction? As an investor, when I back up and look at a transaction at the simplest level, there are only two parties, the seller and the buyer. The real estate agents come in second, as those who are responsible for looking after the interests of their clients. And, by the way, insinuating that the listing agent somehow owes a duty to the lender is, in my mind, VERY dangerous ground.
As an investor, I insist on negotiating with the lender myself. And why not? It makes no sense to me to leave that in the hands of either the seller or their agent, neither of whom have my interests in mind. And yes, I am always represented by a licensed real estate agent in these transactions, one who understands them. But I talked about this last time, so I won’t keep beating away at that point.
There’s plenty more to tick me off in the letter.
There’s what appears to be a “tip of the hat” to the poor lenders. Yes, the same people who hold out a hand in the form of a short sale but make it so difficult and inefficient that most buyers lose interest before an approval is obtained. Why is it that only an estimated 20-25% of short sale approvals actually close? These are the same "poor" lenders whose collection tactics manage to milk the last dollar of savings from people on fixed incomes, knowing that they will never be able to resume a normal payment. They know this because they already have their financial information. And the best one of all? Some of these poor lenders are actually talked into believing that the property in question has a much lower value that it actually does. This type of “fraud” really has to stop. To suggest that all offers should be sent to the lender is absolutely ridiculous. It seems to me that once I enter into a contract with the seller, continuing to accept offers to pass on to the lender is a blatant violation of California law.
The “fraud” here really is that the authors actually know something about the short sale process. The lenders choose their own method for determining the value of a property, whether it be through BPO’s or appraisals.
I have a message about the lenders:
Stop trying to make like they’re the underdogs here, so easily duped!!
THEY ARE READY TO TAKE YOUR HOME FROM YOU. In the end, their only concern is that a short sale will result in less of a loss than a foreclosure. IT’S A BUSINESS! They really don’t give a tinker’s damn about the people making their home there.
And don’t get me started about the references to the listing agent’s responsibility to the lender. Assuming the listing agent is in compliance with the B & P Code, that agent is there to affect the best outcome for the homeowner. The lender isn’t mentioned anywhere in the contract. In the case of a short sale, the homeowner has elected to sell their home rather than have it taken away from them. It is the lender’s choice to offer that option and it is done on their terms, not the agent’s, homeowner’s or buyer’s.
As an investor, I regularly negotiate with a lender for a short sale price and flip it for a profit. I don’t allow anyone else to negotiate for me, certainly not the seller or their agent. Before I engage, I make it quite clear that my intention is to sell it for a profit and that neither the seller nor the listing agent will be paying a fee. It’s my money, after all, that’s being spent. And while the DRE is busy looking for fraud being perpetrated by investors, they turn a blind eye to the common practice of lenders demanding promissory notes to approve short sales. When this is routinely done, even in the case of a non-recourse loan, knowing that they can “hold up” the homeowner whose only other choice is foreclosure, THIS is unethical. But I somehow doubt that the DRE is going to scrutinize this practice, perpetrated by their friends the lenders. And while nothing will justify fraudulent practices, the inference that the practice of short sale flipping is harmful to the community completely ignores the negative impact that the sea of foreclosures we see is far more damaging, to the homeowner and the community.
The federal government continues to implement ineffective programs to assist those who find themselves facing foreclosure. In the meantime, the lenders continue, unencumbered, with their predatory practices. It’s time we start insisting that our state representative do something about these practices.
I, for one, intend to speak with both my state senator and assembly representative to enact legislation that prevents these practices and makes the LENDERS accountable when they violate them. The practices of making a short sale contingent upon the signing of a promissory note for a portion of the balance, or what amounts to deed restrictions limiting the resale of the property have got to stop. Is anyone in Sacramento paying any attention to what the lenders are doing???
Come on, people!
Wheeew. I think that got my blood pressure up!!
Stay rebellious!!
-Larry
PS-I'll be taking a week off next week, but stay tuned for all kinds of cool changes, here at the Real Estate Rebel and at our investor websites!!
Wednesday, May 19, 2010
May Buyer's Tip-Everybody Marches Out of Step but Jimmy
I don't remember which TV show it was, but there was a sit com back in the *harumph*ties where somebody read a letter from an elderly relative talking about how proud they were of a young man who was doing so well in the army. "I was at the parade when his unit came past," says the letter, "And everybody was marching out of step but Jimmy..."
I think about that scene whenever I start to think about market trends and forces, whether Doom & Gloom Analyst A or Perky & Optimistic Talking Head B is right about what's going to happen in real estate over the coming months. Should we all step out with our left foot, or lead with our right?
Then another memory pops up. I was at an investor conference and the speaker asked the room how many people thought the market would go up over the next 6 months, about half the audience raised their hands. He then asked what how many thought the market would fall, and the OTHER half of the room raised their hands. He smiled at us and then said, "Half of you are wrong. But nobody knows which half."
And so, since May is here and spring is definitely arrived in our City by the Bay, I thought it couldn't hurt to remind people of some basics of buying a home. Like last week's column, this is targeted at your Average Rebel, who is looking to buy a home for their family.
I think about that scene whenever I start to think about market trends and forces, whether Doom & Gloom Analyst A or Perky & Optimistic Talking Head B is right about what's going to happen in real estate over the coming months. Should we all step out with our left foot, or lead with our right?
Then another memory pops up. I was at an investor conference and the speaker asked the room how many people thought the market would go up over the next 6 months, about half the audience raised their hands. He then asked what how many thought the market would fall, and the OTHER half of the room raised their hands. He smiled at us and then said, "Half of you are wrong. But nobody knows which half."
And so, since May is here and spring is definitely arrived in our City by the Bay, I thought it couldn't hurt to remind people of some basics of buying a home. Like last week's column, this is targeted at your Average Rebel, who is looking to buy a home for their family.
- Just because everybody is doing something, doesn't mean you should do it, too. If all your friends are finally buying houses because they're afraid the market is going to to soar and they want the lowest price possible, fine. It doesn't mean YOU should do it. Plenty of people did NOT follow their friends' actions during the run up to the recession, and also DID NOT follow their friends into foreclosure. Buy only if the deal works for YOU.
- Don't try to time the market. I'm a real estate investor and finance professional, and even I don't try to time the market when I'm looking at a property. I know what risk-levels work for my investment portfolio, and what represents a good deal today.
- Don't wait for a perfect deal. I have said this so often I think it's become a meditation mantra. If you are looking at a home that you like, and it fits most of your criteria, and you know you can afford the payment over time, and that you wouldn't mind living there...what's stopping you??
- Don't rush into things. This is the flip side of the "Don't wait" rule. If you're not sure you can keep up the payment (fer instance), or your real estate Agent is prodding you into making an offer just because "Well, the market's turning and you won't see these prices again," take a deep breath and re-run the numbers, or ask to see another property more within your budget.
Enough said!
And I'm pretty sure Jimmy was a Rebel...
Best,
Larry
Friday, May 14, 2010
May Resource Post-ARGH, I'M HIJACKING MY OWN BLOG!
Ok, this week, I’m going to rebel against myself.
Normally, I’d be putting together a resource post for you Rebellious Readers out there, choc-full of useful links, sites, and tools to help you navigate the short sale real estate world and beyond.
But I’ve been going over and over in my head a recent issue that has come to my attention, and I thought I’d spend a little time talking about it…
You’ve all heard me rail against the craziness that seems to be inherent in the real estate industry when it comes to understanding short sales.
Now, there seems to be a whole ‘nother layer being created, this time coming from the Department of Real Estate in California (CA DRE). Now, they seem to say, only licensed real estate agents are allowed to talk to people about short sales on their properties, or to banks to negotiate a short sale price. I keep hearing this from both RE brokers and agents, so I started doing some digging myself. And, of course, I found that it ain’t necessarily so. IF YOU READ REBELLIOUSLY, and most people don’t, here’s what you find…
The core of the issue seems to come from the question of who is allowed to talk to a lender to negotiate a short sale on a property, as a recent article from the DRE muddies, er, I mean “attempts to clarify”, the issue. A short excerpt follows:
A real estate broker license (or a real estate salesperson license where that person is working under the supervision of his or her broker) is required under section 10131 (d) of the California Business and Professions Code (B&P Code) where a person, in a representative capacity on behalf of another, "negotiates loans…or performs services for borrowers or lenders …in connection with loans secured directly or collaterally by liens on real property…" for or in expectation of compensation, "regardless of the form or time of payment".
In addition, under section 10131 (a) of the B&P Code, a real estate broker license (or salesperson license with appropriate supervision by the broker of record) is required of any person who, as a representative of another, "Sells or offers to sell, buys or offers to buy, solicits prospective sellers or purchasers of, solicits or obtains listings of, or negotiates the purchase, sale or exchange of real property…" (http://www.dre.ca.gov/pdf_docs/Article_ShortSales03_2010.pdf accessed May 10, 2010)
I’d like to bring your rebellious attention in particular to this sentence from the above excerpt: “a person, in a representative capacity on behalf of another, "negotiates loans…or performs services for borrowers or lenders”
And that, my friends, is the rub. When I take a look at an investment property, I look at buying it FOR MYSELF, and, sometime later, SELLING IT. Nobody is “representing” me in the sense of the law, and while I may have employees engaged in some of the tasks involved in the process along with me, it’s my money and my company purchasing the property. YES, later on I will sell it, for more money than I bought it for. That’s kinda the point of being an investor.
So tell me, what is to stop me from talking to the banks to negotiate a short-sale on a property?
As I read it, as long as I’m the buyer, then nothing at all. Again, it comes down to that line that reads “…as a representative of another”. If I want to negotiate a price on something I’m spending my own money on, nothing in the code prohibits me from doing so.
I’ve got more to say about this letter in coming weeks, but I’m doing a bit more digging first. So stay tuned!
Rebelling everywhere,
Larry
Normally, I’d be putting together a resource post for you Rebellious Readers out there, choc-full of useful links, sites, and tools to help you navigate the short sale real estate world and beyond.
But I’ve been going over and over in my head a recent issue that has come to my attention, and I thought I’d spend a little time talking about it…
You’ve all heard me rail against the craziness that seems to be inherent in the real estate industry when it comes to understanding short sales.
Now, there seems to be a whole ‘nother layer being created, this time coming from the Department of Real Estate in California (CA DRE). Now, they seem to say, only licensed real estate agents are allowed to talk to people about short sales on their properties, or to banks to negotiate a short sale price. I keep hearing this from both RE brokers and agents, so I started doing some digging myself. And, of course, I found that it ain’t necessarily so. IF YOU READ REBELLIOUSLY, and most people don’t, here’s what you find…
The core of the issue seems to come from the question of who is allowed to talk to a lender to negotiate a short sale on a property, as a recent article from the DRE muddies, er, I mean “attempts to clarify”, the issue. A short excerpt follows:
A real estate broker license (or a real estate salesperson license where that person is working under the supervision of his or her broker) is required under section 10131 (d) of the California Business and Professions Code (B&P Code) where a person, in a representative capacity on behalf of another, "negotiates loans…or performs services for borrowers or lenders …in connection with loans secured directly or collaterally by liens on real property…" for or in expectation of compensation, "regardless of the form or time of payment".
In addition, under section 10131 (a) of the B&P Code, a real estate broker license (or salesperson license with appropriate supervision by the broker of record) is required of any person who, as a representative of another, "Sells or offers to sell, buys or offers to buy, solicits prospective sellers or purchasers of, solicits or obtains listings of, or negotiates the purchase, sale or exchange of real property…" (http://www.dre.ca.gov/pdf_docs/Article_ShortSales03_2010.pdf accessed May 10, 2010)
I’d like to bring your rebellious attention in particular to this sentence from the above excerpt: “a person, in a representative capacity on behalf of another, "negotiates loans…or performs services for borrowers or lenders”
And that, my friends, is the rub. When I take a look at an investment property, I look at buying it FOR MYSELF, and, sometime later, SELLING IT. Nobody is “representing” me in the sense of the law, and while I may have employees engaged in some of the tasks involved in the process along with me, it’s my money and my company purchasing the property. YES, later on I will sell it, for more money than I bought it for. That’s kinda the point of being an investor.
So tell me, what is to stop me from talking to the banks to negotiate a short-sale on a property?
As I read it, as long as I’m the buyer, then nothing at all. Again, it comes down to that line that reads “…as a representative of another”. If I want to negotiate a price on something I’m spending my own money on, nothing in the code prohibits me from doing so.
I’ve got more to say about this letter in coming weeks, but I’m doing a bit more digging first. So stay tuned!
Rebelling everywhere,
Larry
Wednesday, May 5, 2010
May Seller's Tip-Distilled Wisdom for yer Average Joe
Hola, Amigos, and Happy Cinqo de Mayo! I think I'll celebrate the victory of the Mexican Army over the better equipped French force at the Battle of Peubla in 1862 by taking a look at how an Average Joe looking to sell their home can come out ahead in these tough real estate times. I'm bringing you a few tips to navigate today's market as an average, non-short sale, non-foreclosure seller. Oh, and of course, I'll head out for some cervezas too...
What if, instead of fighting of French soldiers, that Average Joe (AJ) is stuck in the mire that is today's real estate market and is trying to sell his house? Supposing AJ is being moved out of town by his company and just needs to sell his Bay Area home and move to another state, but is worried about getting the best price when so many homes are on the block for below market rates? Or if AJ (Average Jane, in this case), just watched her last kid graduate from college and head for the big city to start a career and she is starting to think that it might be time to relocate herself?
Here are the top three things that I'm seeing recommended for a "normal" home seller in today's market. Now, remember, I spend most of my time focusing on the Bay Area short sale market, but I do keep my eyes and ears open to all aspects of Real Estate in San Francisco and beyond.
Larry
PS-Coming next week, The Government is dictating who can negotiate on your behalf with a bank?? What the..?
What if, instead of fighting of French soldiers, that Average Joe (AJ) is stuck in the mire that is today's real estate market and is trying to sell his house? Supposing AJ is being moved out of town by his company and just needs to sell his Bay Area home and move to another state, but is worried about getting the best price when so many homes are on the block for below market rates? Or if AJ (Average Jane, in this case), just watched her last kid graduate from college and head for the big city to start a career and she is starting to think that it might be time to relocate herself?
Here are the top three things that I'm seeing recommended for a "normal" home seller in today's market. Now, remember, I spend most of my time focusing on the Bay Area short sale market, but I do keep my eyes and ears open to all aspects of Real Estate in San Francisco and beyond.
- Get a REFERRAL to a good Real Estate agent. As much as I get frustrated with brokers and agents in the Short Sale environment, a good agent is your best bet for getting the top price for your home in a regular sale. If there's any good coming out of the housing crash, it's that a lot of half-baked agents are getting out the industry, leaving a smaller pool of dedicated professionals. BUT ASK AROUND, check with friends and colleagues who have USED the person's service. "Cousin Bob is a real estate agent" doesn't cut it. "The agent who helped me sell my house in a week at a great price six months ago" is closer to what you're looking for.
- Make absolutely sure there's not much of work that will need to go into your home. The days when a seller could knock down the price a little during negotiations because the potential buyer spotted a ragged corner of carpet are gone. Fixer-uppers are everywhere, especially in areas where the previous owners walked away from a mortgage payment but took the faucets with them.
- BE REALISTIC. As I've mentioned before in these pages, this is not the market in which to try and recoup all your stock market losses at one fell swoop. Although there seems to be some light in the tunnel, it's still a tunnel and we're not sure if that's a train or not, so if an offer comes in that looks good but isn't exactly what you want, think hard before you turn it down.
That's it, Rebels, if you read through all the blogs and articles, it still comes down to being smart, flexible, and realistic.
And drinking Cerveza. Which I'm heading off to do...
Rebelliously,Larry
PS-Coming next week, The Government is dictating who can negotiate on your behalf with a bank?? What the..?
Wednesday, April 28, 2010
April Resource Post-Raw Rate Data Rocks!
Greetings Rebels!!
I have been accused of being everything from an old fogey to a young whippersnapper, and never has my age and skill set been more questioned than when it relates to the Internet and the tools it represents.
Obviously, I love the Internet. I'm on LinkedIn and FaceBook, I Blog (duh), and every now and then, I even Tweet. But I don't Digg stuff, I don't have a playlist on MySpace, and my old college photos of that embarassing incident with the goat better not show up on Flickr any time soon. I consider the Internet a tool for business, staying in touch with clients, colleagues and some friends, and most of all, RESEARCH.
I find that the flattening of the playing field when it comes to available data is probably the best aspect of the dub-dub-dub, and while my years of digging deep into obscure financial info are behind me, I do keep an eye on what's happening that effects my business-particularly information on interest rates.
If anything, there's TOO much data out there, and more often then not you're asked to provide some kind of contact data before you can get the information you're looking for. So for this month's Resource Post, I thought I'd separate some metaphorical wheat from the virtual chaff and show you a few spots where I keep an eye on the financial indicators around lending/borrowing. As always, read rebelliously and make up your own mind.
So, my Rebellious Readers, go forth and get informed! No more excuses!
Yours in Rebellion,
LARRY
I have been accused of being everything from an old fogey to a young whippersnapper, and never has my age and skill set been more questioned than when it relates to the Internet and the tools it represents.
Obviously, I love the Internet. I'm on LinkedIn and FaceBook, I Blog (duh), and every now and then, I even Tweet. But I don't Digg stuff, I don't have a playlist on MySpace, and my old college photos of that embarassing incident with the goat better not show up on Flickr any time soon. I consider the Internet a tool for business, staying in touch with clients, colleagues and some friends, and most of all, RESEARCH.
I find that the flattening of the playing field when it comes to available data is probably the best aspect of the dub-dub-dub, and while my years of digging deep into obscure financial info are behind me, I do keep an eye on what's happening that effects my business-particularly information on interest rates.
If anything, there's TOO much data out there, and more often then not you're asked to provide some kind of contact data before you can get the information you're looking for. So for this month's Resource Post, I thought I'd separate some metaphorical wheat from the virtual chaff and show you a few spots where I keep an eye on the financial indicators around lending/borrowing. As always, read rebelliously and make up your own mind.
- For the official picture, if you can ignore the "Aint we cute, we got a website" nature of the government's online presence, the Dept of the Treasury has the 411 on interest rates. And if there's not enough there for you, head over the the Federal Reserve website. Also VERY handy if you find yourself needing some help getting to sleep. Just click the link to any of Chairman Bernanke's speeches and save a fortune on Sominex.
- For something a little more consumer friendly, as well as comparison shopping for things like credit cards and mortgages, I'm a fan of Bankrate. Plus, they have a lot of helpful calculators that don't require you to give them your contact data before making the calculations.
- While I think it's important for Rebels to think about their own situations before thinking in big, national terms, there is room for some counter opinions. So for data with a bit of a technical bent and analysis, more technical head to tradingeconomics.com
- And lastly, for the die-hard big picture people, if you're looking for worldwide stats at your fingertips global-rates.com has a wealth of data, including historic and in-depth American inter-bank numbers.
So, my Rebellious Readers, go forth and get informed! No more excuses!
Yours in Rebellion,
LARRY
Wednesday, April 21, 2010
April Rant-It may be Lending...or it may be Predatory Lending
I was having coffee the other day with one of my bird dogs (the people who hunt up properties at risk of foreclosure), and he said to me, “Ever notice how ‘Banker’ rhymes with ‘Wanker’?”
I nearly choked on my coffee! I’m proud of being The Real Estate Rebel, but we were at a crowded café in the middle of San Francisco’s financial district, and even Jack Sparrow (er…CAPTAIN Jack Sparrow) knew to keep his voice down when the Governor could hear him.
Although now I can admit that the thought had occurred to me. Especially after I spent some time catching up on some of the latest shenanigans in the banking world. And “shenanigans” are about the nicest things I can call them.
Seriously, I’m thinking that some of this latest stuff may fall in the predatory lending category. I urge you to do some more digging and, if you agree, it may be time to call your local lawmakers to action.
So here’s what I’m hearing in the Loan Mod world, through conversations and digging around…
A homeowner applies for a loan modification…then the lender says that they’ll “consider” the application and while they’re doing that, the homeowner will be put on a 3-month trial repayment plan with a lower interest rate.
So far, nothing abnormally abnormal here. I’ve talked before about how shaky that is, but for now, I’m more ticked off at the NEXT point…
BUT THE BANK ALREADY KNOWS THEY WILL BE DECLINING THE MODIFICATION.
Yes, that’s right. This stuff isn’t rocket science. It’s not like there is an army of analysts taking that application for modification and pouring over it with a fine tooth comb to see what the bank should do with it. A few key pieces of data are plugged into a spreadsheet and the answer is there.
SOOOOOoooo…why do the wankers…I mean Bankers…approve the “trial period”??
Because it does two things for them:
1) During the trial period, any outstanding interest piles up and is capitalized if the application is ultimately declined. If the bank already know the application will be declined, it’s a way to get the outstanding balance even higher than when the trial period started
2) It creates a larger asset that may be picked up eventually by you and me via the intervention of TARP, who won’t be looking at where the balance comes from.
And if TARP doesn’t buy it, and if the owner goes into foreclosure, well, that’s just a bigger, inflated number that can be written off as a loss against any profits that year.
Holy cow. I’m really really smart, I’m really really tricky, and even I couldn’t have come up with a scheme that does all this.
So, ya know what, for the next few weeks, even if I whisper it, “Wanker” it is…
Stay Rebellious!
-Larry
I nearly choked on my coffee! I’m proud of being The Real Estate Rebel, but we were at a crowded café in the middle of San Francisco’s financial district, and even Jack Sparrow (er…CAPTAIN Jack Sparrow) knew to keep his voice down when the Governor could hear him.
Although now I can admit that the thought had occurred to me. Especially after I spent some time catching up on some of the latest shenanigans in the banking world. And “shenanigans” are about the nicest things I can call them.
Seriously, I’m thinking that some of this latest stuff may fall in the predatory lending category. I urge you to do some more digging and, if you agree, it may be time to call your local lawmakers to action.
So here’s what I’m hearing in the Loan Mod world, through conversations and digging around…
A homeowner applies for a loan modification…then the lender says that they’ll “consider” the application and while they’re doing that, the homeowner will be put on a 3-month trial repayment plan with a lower interest rate.
So far, nothing abnormally abnormal here. I’ve talked before about how shaky that is, but for now, I’m more ticked off at the NEXT point…
BUT THE BANK ALREADY KNOWS THEY WILL BE DECLINING THE MODIFICATION.
Yes, that’s right. This stuff isn’t rocket science. It’s not like there is an army of analysts taking that application for modification and pouring over it with a fine tooth comb to see what the bank should do with it. A few key pieces of data are plugged into a spreadsheet and the answer is there.
SOOOOOoooo…why do the wankers…I mean Bankers…approve the “trial period”??
Because it does two things for them:
1) During the trial period, any outstanding interest piles up and is capitalized if the application is ultimately declined. If the bank already know the application will be declined, it’s a way to get the outstanding balance even higher than when the trial period started
2) It creates a larger asset that may be picked up eventually by you and me via the intervention of TARP, who won’t be looking at where the balance comes from.
And if TARP doesn’t buy it, and if the owner goes into foreclosure, well, that’s just a bigger, inflated number that can be written off as a loss against any profits that year.
Holy cow. I’m really really smart, I’m really really tricky, and even I couldn’t have come up with a scheme that does all this.
So, ya know what, for the next few weeks, even if I whisper it, “Wanker” it is…
Stay Rebellious!
-Larry
Wednesday, April 14, 2010
April Buyer's Tip-Tax Credit Expiring Soon!
There's nothing certain but death and taxes. And when it comes to temporary tax credits, those aren't even all that certain.
I was chatting with one of my rebellious buddies the other day over a glass of wine and we were discussing the tax credit for first time buyers (defined, conveniently, as those who have not owned a principal residence for 3 years or more), and he said those words I HATE to hear.
"You know Larry, I'm telling people not to hurry their decision to buy a place in order to take advantage of the tax credit. It'll probably get extended again..."
Oh, my dear readers, you KNOW how much I hate that "let's wait and see" thing. So, in addition to making him pay for the wine as punishment, I told him to put on his rebel hat and "get, while the getting is good".
It also occurred to me that many folks out there aren't completely sure what's going on with the credit-how it's defined, how it's claimed, etc.
Now, it's against my rebel nature to tell people what to do and where to go (I hear you snickering, quit it!), but there are some great resources out there so people unsure of the credit can get the information first hand. As ALWAYS, read rebelliously and consult your tax advisor (Or your magic 8-Ball, if it can be trusted more) about what all this means for your situation in particular.
A good layman's discussion can found here, on a site provided by the National Association of Home Builders. It uses normal language and does a nice job of clarifying the different credits.
For those of you like pain and primary sources, the relevant IRS sections about the extensions of the credit can be found here, on the IRS site itself. I recommend taking an aspirin both before and after sorting through the legalese.
Lastly, there's some nice discussion of the extensions available via the CBS site MoneyWatch, which you can access here.
As always my Rebellious Readers, my advice is always on the Go For It side. If you are looking a home and a deal and a tax structure that works for you NOW but are hesitating to see if things get better, the odds are just as good that waiting will hurt you.
Coming Next Week...
More Shenanigans in the Banking World...
Best,
Larry
I was chatting with one of my rebellious buddies the other day over a glass of wine and we were discussing the tax credit for first time buyers (defined, conveniently, as those who have not owned a principal residence for 3 years or more), and he said those words I HATE to hear.
"You know Larry, I'm telling people not to hurry their decision to buy a place in order to take advantage of the tax credit. It'll probably get extended again..."
Oh, my dear readers, you KNOW how much I hate that "let's wait and see" thing. So, in addition to making him pay for the wine as punishment, I told him to put on his rebel hat and "get, while the getting is good".
It also occurred to me that many folks out there aren't completely sure what's going on with the credit-how it's defined, how it's claimed, etc.
Now, it's against my rebel nature to tell people what to do and where to go (I hear you snickering, quit it!), but there are some great resources out there so people unsure of the credit can get the information first hand. As ALWAYS, read rebelliously and consult your tax advisor (Or your magic 8-Ball, if it can be trusted more) about what all this means for your situation in particular.
A good layman's discussion can found here, on a site provided by the National Association of Home Builders. It uses normal language and does a nice job of clarifying the different credits.
For those of you like pain and primary sources, the relevant IRS sections about the extensions of the credit can be found here, on the IRS site itself. I recommend taking an aspirin both before and after sorting through the legalese.
Lastly, there's some nice discussion of the extensions available via the CBS site MoneyWatch, which you can access here.
As always my Rebellious Readers, my advice is always on the Go For It side. If you are looking a home and a deal and a tax structure that works for you NOW but are hesitating to see if things get better, the odds are just as good that waiting will hurt you.
Coming Next Week...
More Shenanigans in the Banking World...
Best,
Larry
Wednesday, April 7, 2010
April Seller's Tip-You might HAFA do it, so do it right
Ah, it's like those old Campbell's soup commercials, where the letters kept rearranging themselves to spell out new words...the government just keeps coming up with more and cleverer (clever-ier? cleverererer??) agencies and acronyms.
But this time, I think it's a pretty good thing. You've heard me rant about the problems that plague anybody working with the banks to work out their loan modification or to get a short-sale approval through the system. Now, with the Home Affordable Foreclosure Alternatives Program (HAFA) from the Obama administration, those of you are trying to avoid foreclosure via short sale have some real support.
In brief, HAFA is designed to help those homeowners who will just not be able to stay in their homes avoid foreclosure through increased incentives to banks to allow a short-sale, in addition to other assistance. One of the BEST of these additional benefits, and kudos to whoever thought it up, is that the program actually has a relocation benefit to help the homeowner make the transition to different housing arrangements.
This is a remarkable win-win, in my rebellious view (at least on paper-more on that later). Banks are increasingly encouraged to support the short sale process, the homeowner trying to make a graceful exit gets some assistance themselves, and all of this means that there are some real solutions out there.
BUT.
And in this case, it could be a BIG but...or a small one...depending on the lender...
As in many of the cases for these government sponsored programs, participation by the lender is optional, and, according to the official information page about the program ( http://makinghomeaffordable.gov/hafa.html ) the lenders write their own guidelines for eligibility.
So the success or failure of the program depends on the actual willingness, flexibility, and preparedness of the lender.
No, wait, don't laugh.
Yet.
The program has just been rolled out, and some early signs are very optimistic. According to DSNews, the on-line news site of the Default Servicing industry, real estate companies and banks are putting a lot of effort into getting on board with the program. http://www.dsnews.com/articles/government-agents-lenders-vendors-one-solitary-force-when-it-comes-to-hafa-2010-04-06
So, those of you that are looking at a short sale as a better solution than foreclosure for yourselves, and for investors like my team, this could be great news. It's well worth your time to check out the website to learn more about your options. http://makinghomeaffordable.gov/hafa.html
And if it joins the jumble of other progras and agencies and fades uselessly back into soupy mix, you can bet that I'll be Ranting about it!
Rebelliously,
-Larry
But this time, I think it's a pretty good thing. You've heard me rant about the problems that plague anybody working with the banks to work out their loan modification or to get a short-sale approval through the system. Now, with the Home Affordable Foreclosure Alternatives Program (HAFA) from the Obama administration, those of you are trying to avoid foreclosure via short sale have some real support.
In brief, HAFA is designed to help those homeowners who will just not be able to stay in their homes avoid foreclosure through increased incentives to banks to allow a short-sale, in addition to other assistance. One of the BEST of these additional benefits, and kudos to whoever thought it up, is that the program actually has a relocation benefit to help the homeowner make the transition to different housing arrangements.
This is a remarkable win-win, in my rebellious view (at least on paper-more on that later). Banks are increasingly encouraged to support the short sale process, the homeowner trying to make a graceful exit gets some assistance themselves, and all of this means that there are some real solutions out there.
BUT.
And in this case, it could be a BIG but...or a small one...depending on the lender...
As in many of the cases for these government sponsored programs, participation by the lender is optional, and, according to the official information page about the program ( http://makinghomeaffordable.gov/hafa.html ) the lenders write their own guidelines for eligibility.
So the success or failure of the program depends on the actual willingness, flexibility, and preparedness of the lender.
No, wait, don't laugh.
Yet.
The program has just been rolled out, and some early signs are very optimistic. According to DSNews, the on-line news site of the Default Servicing industry, real estate companies and banks are putting a lot of effort into getting on board with the program. http://www.dsnews.com/articles/government-agents-lenders-vendors-one-solitary-force-when-it-comes-to-hafa-2010-04-06
So, those of you that are looking at a short sale as a better solution than foreclosure for yourselves, and for investors like my team, this could be great news. It's well worth your time to check out the website to learn more about your options. http://makinghomeaffordable.gov/hafa.html
And if it joins the jumble of other progras and agencies and fades uselessly back into soupy mix, you can bet that I'll be Ranting about it!
Rebelliously,
-Larry
Friday, April 2, 2010
Happy Easter!!!
Well gang, just a quick happy Easter greeting to all you rebels out there! We'll be back next week with more tips, tricks, rants, and raves!!
-Larry
-Larry
Wednesday, March 24, 2010
I'm Not Making This Stuff Up! March's Resource Post
Ok, my Rebellious Readers, it's time for another resource post for you folks out there who get tired of listening to my voice...no, really, it's ok to admit, for a few minutes every month you'd like to see a couple of other places to click...spend some time apart...give each other some space...
So I thought I'd point you in the direction of some of the information out there that I base my business model on, and more importantly, fuel my Rants from time to time. Honestly, I couldn't make this stuff up (I'm good, but not even I could imagine some of the shennanigans that banks think up to snarl the short sale process...)
Here are some directions to the original research that I use to fuel my inner fire...click away...I know you'll come back to me...you always do!
So I thought I'd point you in the direction of some of the information out there that I base my business model on, and more importantly, fuel my Rants from time to time. Honestly, I couldn't make this stuff up (I'm good, but not even I could imagine some of the shennanigans that banks think up to snarl the short sale process...)
Here are some directions to the original research that I use to fuel my inner fire...click away...I know you'll come back to me...you always do!
- Just what exactly is a "Short Sale"? This article is a great summary. It's a little dated, but was updated last year and is still a good starting place to understand the who/what/why of the process http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/UseAShortSaleToEscapeForeclosure.aspx
- Do the banks really deliver somewhat less-than-stellar customer service in the short sale environment? Don't believe me? Check out http://articles.sfgate.com/2007-08-12/business/17255730_1_short-sales-lender-approval-buyers
- Lastly, several readers asked about my recent rant about the promissory notes that lenders are asking owners to sign to approve a short sale. Read more about them at http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2009/07/13/story15.html
So, whaddya think of me now? It's ok, I know you had to spread your wings and soar...and I know I'll see you next week, ya Rebel!!
Stay rebellious!!
-Larry
Thursday, March 18, 2010
March Rant-Where There's a Will...There's a Won't...
In the words of the immortal Sam Kinison, comic, commentator and Rebel, "OH...OH...OOOOOHHHHHHHH!!!"
That's what I said when I came across the latest tactic that some lenders are engaging in when it comes to messing up the short sale process. We've talked about the stalling, the poor customer service, the incorrect (to put it kindly) information, the ridiculous no-resale requirments, etc etc that are experienced by anybody trying to navigate the short sale environment. I'm not going to bore you with any of that again (but, I reserve the right, not to bore you, but to, um... GET YOU FIRED UP AGAIN about it a later date...), so let's move on to the latest bit of chicanery afoot in California and particularly in San Francsico Bay Area short sales.
Let's turn our attention to the folks in the #2 position...the SECOND mortgage holder...
For those of you who are NOT real estate investors but who bought homes in the past 5 years in the Bay Area, you know that having a second mortgage was practically de riguer in order to get into anything. So, of course, as a homeowner falls farther and farther behind on payments, it's not just the primary mortgage but the second that is growing more and more past due. Nothing new there...
So, a short sales expert comes along, and negotiates a deal-the homeowner gets out from under the house, the primary mortgage holder gets some cash (more than they would get at auction, and the place is off their books)...again, nothing new here. Now, the SECOND mortgage holder is often given a token sum depending on the primary lender; I generally see about $3k being approved and given to this #2 spot.
BUT NOW...
Many second mortgage holders are refusing to OK the short sale unless the soon-to-be former owner of the house signs a personal promissory note for the amount of the second mortgage, or for some huge lump-sum amount "today" in lieu of a larger amount spread out over time.
So what? Why shouldn't they hold out for more?
BECAUSE IF THE PLACE GOES TO AUCTION THEY GET NOTHING!!!!
That's why.
The whole point of a short sale (from a bank's perspective) is to avoid the low return and hassle of a repo. The banks work with investors like me and my team BECAUSE they will make more money that way (it ain't because they appreciate my or Sam's humour, I can tell you THAT fer nuthin!).
So, the lender in the #2 position refuses to OK a short sale and turns up their nose at the $1K-$3K that I commonly see going their way, unless the owner signs a new note for the $35k or $75K or whatever they owe...a note that is now UNSECURED, with interest that is now non-tax deductible, and rates that are often variable.
So the owner, who couldn't make the payments in the first place but at least has a roof over their heads that they are willing to give up if they can get out of debt, understandably says NO WAY! This means the property will probably go to auction and the lenders will make much, much less, the owner's credit is destroyed, nobody wins.
Get that?? It's worth repeating...
NOBODY WINS when a bank puts up roadblocks to a decent short sale offer.
Ok, I think that'll do for now. It's so simple, even a BANKER should be able to understand it!
Stay Rebellious!!
--Larry
That's what I said when I came across the latest tactic that some lenders are engaging in when it comes to messing up the short sale process. We've talked about the stalling, the poor customer service, the incorrect (to put it kindly) information, the ridiculous no-resale requirments, etc etc that are experienced by anybody trying to navigate the short sale environment. I'm not going to bore you with any of that again (but, I reserve the right, not to bore you, but to, um... GET YOU FIRED UP AGAIN about it a later date...), so let's move on to the latest bit of chicanery afoot in California and particularly in San Francsico Bay Area short sales.
Let's turn our attention to the folks in the #2 position...the SECOND mortgage holder...
For those of you who are NOT real estate investors but who bought homes in the past 5 years in the Bay Area, you know that having a second mortgage was practically de riguer in order to get into anything. So, of course, as a homeowner falls farther and farther behind on payments, it's not just the primary mortgage but the second that is growing more and more past due. Nothing new there...
So, a short sales expert comes along, and negotiates a deal-the homeowner gets out from under the house, the primary mortgage holder gets some cash (more than they would get at auction, and the place is off their books)...again, nothing new here. Now, the SECOND mortgage holder is often given a token sum depending on the primary lender; I generally see about $3k being approved and given to this #2 spot.
BUT NOW...
Many second mortgage holders are refusing to OK the short sale unless the soon-to-be former owner of the house signs a personal promissory note for the amount of the second mortgage, or for some huge lump-sum amount "today" in lieu of a larger amount spread out over time.
So what? Why shouldn't they hold out for more?
BECAUSE IF THE PLACE GOES TO AUCTION THEY GET NOTHING!!!!
That's why.
The whole point of a short sale (from a bank's perspective) is to avoid the low return and hassle of a repo. The banks work with investors like me and my team BECAUSE they will make more money that way (it ain't because they appreciate my or Sam's humour, I can tell you THAT fer nuthin!).
So, the lender in the #2 position refuses to OK a short sale and turns up their nose at the $1K-$3K that I commonly see going their way, unless the owner signs a new note for the $35k or $75K or whatever they owe...a note that is now UNSECURED, with interest that is now non-tax deductible, and rates that are often variable.
So the owner, who couldn't make the payments in the first place but at least has a roof over their heads that they are willing to give up if they can get out of debt, understandably says NO WAY! This means the property will probably go to auction and the lenders will make much, much less, the owner's credit is destroyed, nobody wins.
Get that?? It's worth repeating...
NOBODY WINS when a bank puts up roadblocks to a decent short sale offer.
Ok, I think that'll do for now. It's so simple, even a BANKER should be able to understand it!
Stay Rebellious!!
--Larry
Wednesday, March 10, 2010
March Buyer's Tip-Think Local, Think Credit Unions
I've spent a lot of time critiquing the banks and mortgage brokers for their one-size-fits-all solutions, poor customer support, and general not-with-it-ness (hey, why be a rebel if you can't make up a word from time to time...?). And next week, I'll be getting back to that topic.
But today I thought I'd share a solution to the big-bank re-financing trap that a lot of people are in. Or, even if you're a new buyer looking for financing.
Take a look in your own backyard. If you're looking for innovative and still local decision making, try out your local credit union. Even if you don't already have an account, a small deposit ($50-$100 in most cases) will open one and give you access to their services.
According to the American Credit Union Mortgage Association, (www.acum.org) Credit Unions are well positioned to take advantage of the current lending crisis. Because they are generally local and association based (credit union membership is usually predicated on some kind trade, academic, or residency affiliation. See, I can use big words too...), reaching out to those members who are not being well served by the bigger banks represents a unique opportunity to grow a Credit Union's membership and asset base. This means that they are actively looking to restart their mortgage lending. Huzzah!
So what are you waiting for?? If you're having a tough time getting a response from your bank, check out http://www.creditunion.coop/ to find a Credit Union that fits you.
Good luck, and go gettem!!
-Larry
But today I thought I'd share a solution to the big-bank re-financing trap that a lot of people are in. Or, even if you're a new buyer looking for financing.
Take a look in your own backyard. If you're looking for innovative and still local decision making, try out your local credit union. Even if you don't already have an account, a small deposit ($50-$100 in most cases) will open one and give you access to their services.
According to the American Credit Union Mortgage Association, (www.acum.org) Credit Unions are well positioned to take advantage of the current lending crisis. Because they are generally local and association based (credit union membership is usually predicated on some kind trade, academic, or residency affiliation. See, I can use big words too...), reaching out to those members who are not being well served by the bigger banks represents a unique opportunity to grow a Credit Union's membership and asset base. This means that they are actively looking to restart their mortgage lending. Huzzah!
So what are you waiting for?? If you're having a tough time getting a response from your bank, check out http://www.creditunion.coop/ to find a Credit Union that fits you.
Good luck, and go gettem!!
-Larry
Wednesday, March 3, 2010
March Seller's Tip-for Real Estate Agents
Recently we've spent some time talking about how we like to work with Brokers/Agents (B/As...and again...NO SNICKERING!) who really understand the short sale process. Especially San Francisco Bay Area foreclosures remaining high.
Sadly, as we mentioned, in many cases, we've found that many B/As are under some very false assumptions about the short sale process, even being confused about whether or not the process is legal. I'm not going to address THAT particular issue again (IT'S ABSOLUTELY LEGAL!), but recently my team and I thought that we'd be doing the world (and, frankly, ourselves) a favor if we worked hard at educating this group so they can work with the hundreds of sellers out there facing a short sale.
So I'm pleased to announce the launch of www.realtor.bea-corp.com, a sub-site of our investor focused site designed to help Real Agents work with us in the short sale market.
Using this site, B/As can get find a great resource to help them
Sadly, as we mentioned, in many cases, we've found that many B/As are under some very false assumptions about the short sale process, even being confused about whether or not the process is legal. I'm not going to address THAT particular issue again (IT'S ABSOLUTELY LEGAL!), but recently my team and I thought that we'd be doing the world (and, frankly, ourselves) a favor if we worked hard at educating this group so they can work with the hundreds of sellers out there facing a short sale.
So I'm pleased to announce the launch of www.realtor.bea-corp.com, a sub-site of our investor focused site designed to help Real Agents work with us in the short sale market.
Using this site, B/As can get find a great resource to help them
- Handle a short sale by bringing our team into the transaction
- Spend more time on finding a buyer for a property at a competitive market rate
- Spend less time talking to the lender negotiating all the short-sale issues (MUCH, MUCH less time-none at all, in fact)
- Earn their full commission on a property
- Do what they love-sell houses!
So if you are a B/A (or if you know one, pass this along) facing walking away from commission checks because short-sale properties are too much work and, frankly, outside of your expertise, www.realtor.bea-corp.com presents an excellent opportunity to become a Real Estate Rebel in your own Right (oooh, how awesome alliteration accelerates acceptance!) and start making money in a part of the market that you've previously stayed away from.
Keep Spreading the Rebellion!
-Larry
Wednesday, February 24, 2010
Numbers, Numbers, Numbers-February's Resource Post
Numbers, Numbers, Numbers!!
In a previous incarnation, I was a numbers guy. That meant I crunched ‘em, munched ‘em, and spit out a whole slew of reports, analyses, and, yes, even the odd full-color chart from time to time. Sometimes, after combining wine-tasting with work, the graphics for those charts were VERY odd, indeed.
Now, I’m still a numbers guy, but as a Real Estate Rebel I tend to focus on the deal or the project at hand, and I’m less willing to spend a lot of time creating formulas and forecasting profitability curves (in fact, I get a little frisson just thinking about it…I’m not sure if that’s fear of wasted energy or some sweet nostalgia…). And investing, is after all, a numbers game.
BUT, I’m willing to let somebody else do the real digging and delving and Excel-sheeting, while I read the comic pages of the SF Chronicle and drink a cup of coffee and glance at their blogs. In the spirit of openness I mentioned a few postings ago, here’s a brief, non-comprehensive, list of blog resources to get your number-crunching fill.
ALWAYS REMEMBER: Read Rebelliously!! Form your own opinions, because in the words of Mark Twain, “There’s lies, damn lies, and then there’s statistics”. Often, sites are managed by Real Estate agents, and while they’re written in good faith, I tend to stick to sites that have reasonable explanations of the criteria/methodology/sources for their reports.
For some hard-core graphics of pricing trends, check out http://blog.redfin.com/sfbay/, and no, you’re not looking at roller-coaster schematics. Welcome to the wild ride that is real estate investing…
For a decent snap-shot of home prices in the SF Bay Area, http://www.lubasf.com/blog/, puts out a monthly report. The report is pulled from MLS sources, so keep in mind that not every development or property goes through that channel. And short sales are under-represented.
And for the broader, more national scope, I like folks over at http://blog.altosresearch.com/, although they’re a little thin on SF Real Estate data on the blog, having a wider focus.
Alright, my coffee’s getting cold and Garfield doesn’t read himself, so I’ll see you all next week.
STAY REBELLIOUS!!
-Larry
In a previous incarnation, I was a numbers guy. That meant I crunched ‘em, munched ‘em, and spit out a whole slew of reports, analyses, and, yes, even the odd full-color chart from time to time. Sometimes, after combining wine-tasting with work, the graphics for those charts were VERY odd, indeed.
Now, I’m still a numbers guy, but as a Real Estate Rebel I tend to focus on the deal or the project at hand, and I’m less willing to spend a lot of time creating formulas and forecasting profitability curves (in fact, I get a little frisson just thinking about it…I’m not sure if that’s fear of wasted energy or some sweet nostalgia…). And investing, is after all, a numbers game.
BUT, I’m willing to let somebody else do the real digging and delving and Excel-sheeting, while I read the comic pages of the SF Chronicle and drink a cup of coffee and glance at their blogs. In the spirit of openness I mentioned a few postings ago, here’s a brief, non-comprehensive, list of blog resources to get your number-crunching fill.
ALWAYS REMEMBER: Read Rebelliously!! Form your own opinions, because in the words of Mark Twain, “There’s lies, damn lies, and then there’s statistics”. Often, sites are managed by Real Estate agents, and while they’re written in good faith, I tend to stick to sites that have reasonable explanations of the criteria/methodology/sources for their reports.
For some hard-core graphics of pricing trends, check out http://blog.redfin.com/sfbay/, and no, you’re not looking at roller-coaster schematics. Welcome to the wild ride that is real estate investing…
For a decent snap-shot of home prices in the SF Bay Area, http://www.lubasf.com/blog/, puts out a monthly report. The report is pulled from MLS sources, so keep in mind that not every development or property goes through that channel. And short sales are under-represented.
And for the broader, more national scope, I like folks over at http://blog.altosresearch.com/, although they’re a little thin on SF Real Estate data on the blog, having a wider focus.
Alright, my coffee’s getting cold and Garfield doesn’t read himself, so I’ll see you all next week.
STAY REBELLIOUS!!
-Larry
Wednesday, February 17, 2010
February Rant-It's Really a Compliment...REALLY!
Ok, Rebels…this is NOT a rant…this is an observation…or maybe a compliment…directed toward Real Estate Brokers and Agents we work with as short sale investors in the California San Francisco Bay Area.
I’d like to give kudos to the many, many Brokers and Agents (B/As, for short, and NO SNICKERING) who really get and understand the short sale process. How do I know them? Remember, this is my business…
I can always tell when I’m working with a B/A who knows what they’re talking about. If they are listing a short-sale property, they understand that it’s not the normal transaction. Their role in the process isn’t to get the highest price possible for their clients, but rather to quickly and efficiently get their client out from under the housing payment and off the foreclosure list. B/As in this situation know that they need to look at the buyer in a very different light. The question then isn’t who came in with the highest offer, the question is, who came in with the most dependable offer, an offer that the B/A knows is funded, an offer that won’t fall through because the buyer’s financing disappears, or will be subject to snags and delays, leaving the B/A’s client twisting in the foreclosure winds for another month or more.
This type of B/A also knows that they are in a little bit of a weird spot, in terms of their relationship with the owner and the banks. If they’re working on a short sale offer, they don’t take it back to the homeowner for approval, they need to negotiate with the BANK to approve the deal. Things like this are why many B/A’s don’t work with short sales-there’s not a lot of money to be made BUT it’s a very complicated and confusing transaction best left to experts.
Sadly, I can always also tell when I’m working with a B/A who hasn’t got a clue about how different a short-sale deal is from a regular listing. I’m actually fine with somebody not understanding a complicated and unusual set of circumstances, but I really have a hard time with B/A’s who are full of misinformation, inaccurate understandings of the law, and are operating on the basis of hearsay and gossip. The most common error I hear when I talk to these B/A’s is “I can’t work with you on this property if you’re planning to resell it quickly. Flips are illegal.” This, oh my dear readers, is absolute rubbish. Hogwash. Hooey. Even, dare I say it, Phoney Baloney. I apologize for the strong language.
I’ve been so surprised by this response, and the certainty in the voice of the people who utter it, that I decided to do some digging. Was it actually possible that my entire business model, and the model of many real estate investors much smarter and cooler than me (hard to believe, I know) was actually illegal??
And I found NOTHING, anywhere to indicate that buying and then reselling a house is illegal!! What I did find, and what makes sense, is a lot of fine print from places like Fannie Mae encouraging lenders to take a closer look at buyers who are intending to flip a property bought at short sale to avoid what is called equity skimming or predatory flipping. I won’t go into detail, but these activities ARE illegal, and involve lying, cheating, and stealing.
Let me repeat: equity skimming and predatory flipping are illegal, but buying a house as an investor at a wholesale price and then reselling it at market value is not illegal. It's called investing. Many lenders, who tend to take the safe road when under the microscope (but NOT when doing the things that landed them under it), are adding restrictions into their lending documents about title seasoning, however, that’s not law, that’s the CYA (Cover Your Assets) system at it’s finest. There are lenders have no title seasoning requirements on their loans. Guess who I work with and make money for??
Now, there is a LOT of fine print out there about this stuff, and B/As are wonderful salespeople who really good at organizing all the myriad pieces of paper that have to be in place to buy and sell a home. Sadly, many of them are NOT great readers of fine print, and so go with the “NO” when approached by me or a member of my team.
Now I ask you, is that really in the sellers’ best interest?
BUT, again, this is more of a THANK YOU and GOOD JOB to those B/A’s out there who get and understand what it means to work with a short sale property and an investor like me. And we’ll be making money for years to come!
And keep in mind, reading the fine print is REBELLION at its finest!!
Best,
Larry
I’d like to give kudos to the many, many Brokers and Agents (B/As, for short, and NO SNICKERING) who really get and understand the short sale process. How do I know them? Remember, this is my business…
I can always tell when I’m working with a B/A who knows what they’re talking about. If they are listing a short-sale property, they understand that it’s not the normal transaction. Their role in the process isn’t to get the highest price possible for their clients, but rather to quickly and efficiently get their client out from under the housing payment and off the foreclosure list. B/As in this situation know that they need to look at the buyer in a very different light. The question then isn’t who came in with the highest offer, the question is, who came in with the most dependable offer, an offer that the B/A knows is funded, an offer that won’t fall through because the buyer’s financing disappears, or will be subject to snags and delays, leaving the B/A’s client twisting in the foreclosure winds for another month or more.
This type of B/A also knows that they are in a little bit of a weird spot, in terms of their relationship with the owner and the banks. If they’re working on a short sale offer, they don’t take it back to the homeowner for approval, they need to negotiate with the BANK to approve the deal. Things like this are why many B/A’s don’t work with short sales-there’s not a lot of money to be made BUT it’s a very complicated and confusing transaction best left to experts.
Sadly, I can always also tell when I’m working with a B/A who hasn’t got a clue about how different a short-sale deal is from a regular listing. I’m actually fine with somebody not understanding a complicated and unusual set of circumstances, but I really have a hard time with B/A’s who are full of misinformation, inaccurate understandings of the law, and are operating on the basis of hearsay and gossip. The most common error I hear when I talk to these B/A’s is “I can’t work with you on this property if you’re planning to resell it quickly. Flips are illegal.” This, oh my dear readers, is absolute rubbish. Hogwash. Hooey. Even, dare I say it, Phoney Baloney. I apologize for the strong language.
I’ve been so surprised by this response, and the certainty in the voice of the people who utter it, that I decided to do some digging. Was it actually possible that my entire business model, and the model of many real estate investors much smarter and cooler than me (hard to believe, I know) was actually illegal??
And I found NOTHING, anywhere to indicate that buying and then reselling a house is illegal!! What I did find, and what makes sense, is a lot of fine print from places like Fannie Mae encouraging lenders to take a closer look at buyers who are intending to flip a property bought at short sale to avoid what is called equity skimming or predatory flipping. I won’t go into detail, but these activities ARE illegal, and involve lying, cheating, and stealing.
Let me repeat: equity skimming and predatory flipping are illegal, but buying a house as an investor at a wholesale price and then reselling it at market value is not illegal. It's called investing. Many lenders, who tend to take the safe road when under the microscope (but NOT when doing the things that landed them under it), are adding restrictions into their lending documents about title seasoning, however, that’s not law, that’s the CYA (Cover Your Assets) system at it’s finest. There are lenders have no title seasoning requirements on their loans. Guess who I work with and make money for??
Now, there is a LOT of fine print out there about this stuff, and B/As are wonderful salespeople who really good at organizing all the myriad pieces of paper that have to be in place to buy and sell a home. Sadly, many of them are NOT great readers of fine print, and so go with the “NO” when approached by me or a member of my team.
Now I ask you, is that really in the sellers’ best interest?
BUT, again, this is more of a THANK YOU and GOOD JOB to those B/A’s out there who get and understand what it means to work with a short sale property and an investor like me. And we’ll be making money for years to come!
And keep in mind, reading the fine print is REBELLION at its finest!!
Best,
Larry
Wednesday, February 10, 2010
February Seller's Tip-Check out the Government's free tips...
Ok, folks, last week we talked about someplace that people looking to buy a home that had gone through foreclosure could check out.
So, in the interest of balanced reporting, I'm pleased to let you know about another website that offers some great tips for people thinking about selling their homes. I'll be honest-I started thinking about when one of my colleagues, after months of trying to sell a home, switched listing agents and got two offers in two days. So I started doing some digging to see what advice was out there that was USEFUL, not just some Real Estate agent or broker's personal page designed to get you to use their services.
So often, if you hunt for help on selling a home, that's exactly where you end up-getting some canned and pre-packaged RE agent site. Now, I'm not knocking RE agents (at least not yet...but fair warning, look for a future rant on the topic), but how exactly can you entrust what may be the biggest financial transaction of your life to somebody based on their website, especially when so many of them look the same?
Similarly, how do you get a good understanding of settling costs and other seller's issues? I'm pleased to report that at least SOME of our tax dollars are helping homeowners answer questions like this (although don't forget to read Rebelliously and make up your own mind!). The US Department of Housing and Urban Development (HUD) has put together a fairly user-friendly and accessible site to help. You can find it at http://portal.hud.gov/portal/page/portal/HUD/topics/selling_a_home and look for tips on everything from interviewing a broker to understanding settlement issues.
So, if you're thinking of selling for any reason, I bet there's information there that will be helpful. Go Gettit!
Rebelliously,
Larry
So, in the interest of balanced reporting, I'm pleased to let you know about another website that offers some great tips for people thinking about selling their homes. I'll be honest-I started thinking about when one of my colleagues, after months of trying to sell a home, switched listing agents and got two offers in two days. So I started doing some digging to see what advice was out there that was USEFUL, not just some Real Estate agent or broker's personal page designed to get you to use their services.
So often, if you hunt for help on selling a home, that's exactly where you end up-getting some canned and pre-packaged RE agent site. Now, I'm not knocking RE agents (at least not yet...but fair warning, look for a future rant on the topic), but how exactly can you entrust what may be the biggest financial transaction of your life to somebody based on their website, especially when so many of them look the same?
Similarly, how do you get a good understanding of settling costs and other seller's issues? I'm pleased to report that at least SOME of our tax dollars are helping homeowners answer questions like this (although don't forget to read Rebelliously and make up your own mind!). The US Department of Housing and Urban Development (HUD) has put together a fairly user-friendly and accessible site to help. You can find it at http://portal.hud.gov/portal/page/portal/HUD/topics/selling_a_home and look for tips on everything from interviewing a broker to understanding settlement issues.
So, if you're thinking of selling for any reason, I bet there's information there that will be helpful. Go Gettit!
Rebelliously,
Larry
Wednesday, February 3, 2010
February Buyer's Tip-Explore FannieMae's Homepath
Ok Rebels, remember this rule about government agencies and those that are ESSENTIALLY government agencies: Not ONLY should we look a gift horse in the mouth, we should also double check that all four hooves are present and the animal is actually breathing. And I put FannieMae squarely into the "Essentially Government" category.
That being said, I have been happy to see that the organization is at least doing some interesting things to move houses off the market and into the hands of owners who will take care of them, thus re-filling many of the neighborhoods where FannieMae (FM) funded homes that are in foreclosure.
One of my readers recently tipped me off to Homepath.com, the website where properties that have been foreclosed on by FM can be found. The site also lists some interesting incentives that the FM is putting forward, such as a rebate of up to 3.5% of the cost of a home given back to the new buyer or credited toward the purchase of new appliances. Check the website for the fine print-more on that later.
Also, the site has a very user-friendly interface for finding prices/locations of properties for sale from their REO inventory.
Why am I recommending that people take a look at it? After all, it's possible that people may consider Homepath.com a competitor of us Real Estate Rebels. Nope. These homes have already been foreclosed on, and we work on Bay Area Short Sales, trying to work with homeowner BEFORE foreclosure happens. It's in everybody's best interests for neighborhoods to avoid empty houses, decaying lawns, and that odd ghost-town feeling that some blocks in areas get at times like this when too many properties have "REO" signs out front.
So I'm all for programs like this. JUST REMEMBER TO READ THE FINE PRINT! Also, specific lenders may have their own requirements when lending on these properties, so check out every option before you sign anything. Ever.
But it's nice to know that at least somebody's coming up with some clever ideas (besides us Rebels, of course) to get vacant homes filled and neighborhoods populated again.
So, if you're in the market for a home, you could do worse than check the site out and see if something there might work for you.
Have Fun!
-Larry
That being said, I have been happy to see that the organization is at least doing some interesting things to move houses off the market and into the hands of owners who will take care of them, thus re-filling many of the neighborhoods where FannieMae (FM) funded homes that are in foreclosure.
One of my readers recently tipped me off to Homepath.com, the website where properties that have been foreclosed on by FM can be found. The site also lists some interesting incentives that the FM is putting forward, such as a rebate of up to 3.5% of the cost of a home given back to the new buyer or credited toward the purchase of new appliances. Check the website for the fine print-more on that later.
Also, the site has a very user-friendly interface for finding prices/locations of properties for sale from their REO inventory.
Why am I recommending that people take a look at it? After all, it's possible that people may consider Homepath.com a competitor of us Real Estate Rebels. Nope. These homes have already been foreclosed on, and we work on Bay Area Short Sales, trying to work with homeowner BEFORE foreclosure happens. It's in everybody's best interests for neighborhoods to avoid empty houses, decaying lawns, and that odd ghost-town feeling that some blocks in areas get at times like this when too many properties have "REO" signs out front.
So I'm all for programs like this. JUST REMEMBER TO READ THE FINE PRINT! Also, specific lenders may have their own requirements when lending on these properties, so check out every option before you sign anything. Ever.
But it's nice to know that at least somebody's coming up with some clever ideas (besides us Rebels, of course) to get vacant homes filled and neighborhoods populated again.
So, if you're in the market for a home, you could do worse than check the site out and see if something there might work for you.
Have Fun!
-Larry
Sunday, January 31, 2010
Bird-dog Program Invitation
Hey Rebels!
Most of you have seen my stories about two of our "bird-dogs", people making money in California and Bay Area Real Estate without risking any of their own cash or having a real estate license. If you haven't, take a look at the recent interview with Francine, one of those people who is part of the program.
I'm happy to announce that we'll be rolling out a new training program for bird-dogs, and you're invited to apply. If you're interested in making money in real estate by sources properties that are good short-sale investment opportunities, we'd like to chat with you.
Please be aware that not everybody will be a good match for the program-here's our preferred criteria:
Most of you have seen my stories about two of our "bird-dogs", people making money in California and Bay Area Real Estate without risking any of their own cash or having a real estate license. If you haven't, take a look at the recent interview with Francine, one of those people who is part of the program.
I'm happy to announce that we'll be rolling out a new training program for bird-dogs, and you're invited to apply. If you're interested in making money in real estate by sources properties that are good short-sale investment opportunities, we'd like to chat with you.
Please be aware that not everybody will be a good match for the program-here's our preferred criteria:
- live/work in the San Francisco Bay Area or Los Angeles Area
- be outgoing, friendly, and solution driven; somebody people like to talk to
- currently working in an environment that brings you into contact with homeowners from all walks of life on a regular basis
Essentially, the program is about earning money by finding and referring acceptable properties for our team. If you'd like to be considered for the program, please click here and drop our team a note. One of my group will reach out to you and discuss details and to see if the program is a good fit...
...and get ready to join the Rebels!!!
Rebelliously,
Larry
Wednesday, January 20, 2010
January Rant-A Call to (examine) ARMS
What’s in a name?? When is an interest rate not an interest rate? When it’s an ARM. I think it’s time we call these loans what they are-teasers, ticklers, or worse, traps.
I’ve been staying on top of what’s going on in Real Estate in the San Francisco Bay Area for awhile now, and I’ve got to be honest, I’m getting pretty nervous about what I’m seeing on the ARM horizon. I’ve mentioned it before, but in talking to people and banks in the area I’m afraid there’s a lot of head-in-the-sand attitudes out there about this topic.
Think about it. In the Bay Area, most people have to use an ARM to get into just about any home, in order to soften the blow of the payments they have to make in the beginning of their mortgages. Often, the thinking goes that by the time the ARM rate increases, the buyer will be in a position to refinance their mortgage for better terms, or they’ll be ready to sell in any case.
So what happens when their real estate has actually gone DOWN in value?? Or if the buyer can’t refinance? Well, then, the payment goes UP. And UP…, and if they were barely making ends meet already, then they’ve gotten themselves into a trap that leads directly into default and often foreclosure.
Why is this on my mind right now? One of my readers just sent me a CNN.Com piece from a couple of weeks back that really puts it into perspective:
“For many of the more than 350,000 option-ARM borrowers, it's time to pay the piper. Their loans will change into fully amortizing mortgages that will carry much higher monthly payments. A very large percentage of these homeowners will default, according to Shari Olefson, author of "Foreclosure Nation: Mortgaging the American Dream."
"We've still only seen the tip of the foreclosure iceberg," she said.” (CNN.com)
Yep, that’s 350,000 loans resetting that are at higher risk for foreclosure THIS YEAR than they were LAST year.
And what’s the government doing with our money to help ease these extra burdens on the economy? That’s a REALLY good question. The tax credit is set to expire this year, there are still no teeth to any of the modification programs, and the banks have been remarkably silent on the issue of how they’ll handle this next wave of foreclosures. Add to that the reminder that the government re-purchase of mortgage backed securities will taper off this year, and you’re looking at least one more tough year in the housing arena and a good case for thinking interest rates will rise. Besides, there’s not a heck of a lot left for the government TO do in this area.
So what’s a borrower to do if they’re looking at a mortgage payment that’s suddenly going to go up? Sadly, I don’t have a lot of advice there. If you’re looking at default/foreclosure, you know my best recommendation is to explore all your options, including short sale.
BUT, if you’re one of those lucky few who are actually buying a house in this environment, you should consider one question very carefully: can you, if the interest rate increases in a few years, still afford the payment? Are you already 110% stretched, or is there a little wiggle room in your budget?
Remember the Schwab posters… “My house is worth a million bucks is NOT a retirement plan”? If you’re looking at taking an option-ARM, make your motto “If the payment gets too high we can just refinance is NOT sound financial strategy.”
So, me Rebellious Readers, before you take up ARMS, take a sharper pencil to your worst-case scenario budget.
Stay Rebellious!
Larry
I’ve been staying on top of what’s going on in Real Estate in the San Francisco Bay Area for awhile now, and I’ve got to be honest, I’m getting pretty nervous about what I’m seeing on the ARM horizon. I’ve mentioned it before, but in talking to people and banks in the area I’m afraid there’s a lot of head-in-the-sand attitudes out there about this topic.
Think about it. In the Bay Area, most people have to use an ARM to get into just about any home, in order to soften the blow of the payments they have to make in the beginning of their mortgages. Often, the thinking goes that by the time the ARM rate increases, the buyer will be in a position to refinance their mortgage for better terms, or they’ll be ready to sell in any case.
So what happens when their real estate has actually gone DOWN in value?? Or if the buyer can’t refinance? Well, then, the payment goes UP. And UP…, and if they were barely making ends meet already, then they’ve gotten themselves into a trap that leads directly into default and often foreclosure.
Why is this on my mind right now? One of my readers just sent me a CNN.Com piece from a couple of weeks back that really puts it into perspective:
“For many of the more than 350,000 option-ARM borrowers, it's time to pay the piper. Their loans will change into fully amortizing mortgages that will carry much higher monthly payments. A very large percentage of these homeowners will default, according to Shari Olefson, author of "Foreclosure Nation: Mortgaging the American Dream."
"We've still only seen the tip of the foreclosure iceberg," she said.” (CNN.com)
Yep, that’s 350,000 loans resetting that are at higher risk for foreclosure THIS YEAR than they were LAST year.
And what’s the government doing with our money to help ease these extra burdens on the economy? That’s a REALLY good question. The tax credit is set to expire this year, there are still no teeth to any of the modification programs, and the banks have been remarkably silent on the issue of how they’ll handle this next wave of foreclosures. Add to that the reminder that the government re-purchase of mortgage backed securities will taper off this year, and you’re looking at least one more tough year in the housing arena and a good case for thinking interest rates will rise. Besides, there’s not a heck of a lot left for the government TO do in this area.
So what’s a borrower to do if they’re looking at a mortgage payment that’s suddenly going to go up? Sadly, I don’t have a lot of advice there. If you’re looking at default/foreclosure, you know my best recommendation is to explore all your options, including short sale.
BUT, if you’re one of those lucky few who are actually buying a house in this environment, you should consider one question very carefully: can you, if the interest rate increases in a few years, still afford the payment? Are you already 110% stretched, or is there a little wiggle room in your budget?
Remember the Schwab posters… “My house is worth a million bucks is NOT a retirement plan”? If you’re looking at taking an option-ARM, make your motto “If the payment gets too high we can just refinance is NOT sound financial strategy.”
So, me Rebellious Readers, before you take up ARMS, take a sharper pencil to your worst-case scenario budget.
Stay Rebellious!
Larry
Wednesday, January 13, 2010
January Buyer Tip-5 Questions
It’s a new year, and already the questions about what 2010 will bring are POURING in…as, unsurprisingly, are the pseudo-answers. Ira Glass, host of public radio program “This American Life”, had a great commentary on the uselessness of predictions, in particular his feelings about The Economist Magazine’s annual prediction issue, in his show a couple of weeks ago. You can listen to the program here…
You all know that I’m not in the business of predictions. Unless, fer instance, the question is “Will Larry open that last bottle of wine?” For things like that, I’m usually bang on. Instead of predictions, I’m going to give those of you considering BUYING a property this year some questions to help you make up your mind. For each question, I’ll ALSO talk about why it’s important to think about it. Remember, there are no right answers…
1) How stable is your job?
Even if you’re looking at a great deal on a property, if you look around you and see waves of layoffs at your company, and the guy next to you just got his pink slip it’s very possible you’re the next head on the block. If you lose the job, can you still afford the place you’re considering? This is especially important for single-income families to think about. If you’re in sales or marketing and heavily commission based, even if your job is secure, what income fluctuations may loom?
2) How are you “fixed” in your current housing payment?
If you rent, are you looking at doubling or tripling your monthly housing payment? If you are an owner right now, will you be able to get terms that are more favorable as you have currently?
3) How much do you love the property/neighborhood you’re looking at?
I have a colleague who was looking at buying a condo in the SF Bay Area. He and his wife liked it a lot. They didn’t LOVE it enough to believe that, if they ended up without any extra cash for a few years, they’d be perfectly happy re-arranging the furniture every Friday night instead of going out to dinner and a movie. They walked away and have never ever regretted the decision.
4) Where are you in the family planning stage?
If you’re just starting, do you really need that second bedroom already? If your kids are grown and out, do you want to have room for them to come visit or does the excuse “We just don’t have enough space for everybody for Christmas” sound like an EXCELLENT way to justify a trip to the Bahamas for the holidays next year?
5) Do you have the skills to take care of any issues that may pop up in a fixer-upper or bank-repo’d home you buy?
I know several people who made great deals and learned how to take care of some basics that the previous owners let slip while the place was undergoing the foreclosure process. They knew they could figure out a leaky pipe or a sagging porch and avoided spending money on contractors.
Remember, Rebels, there’s no right or wrong. There’s also no guaranteed good/bad time to buy. The Real Estate Rebel formula is simple: go in with your eyes open and consider your risks.
Of course, if all else fails, ask the Magic 8-Ball. The signs always point to “maybe”…
Rebelliously,
LARRY
You all know that I’m not in the business of predictions. Unless, fer instance, the question is “Will Larry open that last bottle of wine?” For things like that, I’m usually bang on. Instead of predictions, I’m going to give those of you considering BUYING a property this year some questions to help you make up your mind. For each question, I’ll ALSO talk about why it’s important to think about it. Remember, there are no right answers…
1) How stable is your job?
Even if you’re looking at a great deal on a property, if you look around you and see waves of layoffs at your company, and the guy next to you just got his pink slip it’s very possible you’re the next head on the block. If you lose the job, can you still afford the place you’re considering? This is especially important for single-income families to think about. If you’re in sales or marketing and heavily commission based, even if your job is secure, what income fluctuations may loom?
2) How are you “fixed” in your current housing payment?
If you rent, are you looking at doubling or tripling your monthly housing payment? If you are an owner right now, will you be able to get terms that are more favorable as you have currently?
3) How much do you love the property/neighborhood you’re looking at?
I have a colleague who was looking at buying a condo in the SF Bay Area. He and his wife liked it a lot. They didn’t LOVE it enough to believe that, if they ended up without any extra cash for a few years, they’d be perfectly happy re-arranging the furniture every Friday night instead of going out to dinner and a movie. They walked away and have never ever regretted the decision.
4) Where are you in the family planning stage?
If you’re just starting, do you really need that second bedroom already? If your kids are grown and out, do you want to have room for them to come visit or does the excuse “We just don’t have enough space for everybody for Christmas” sound like an EXCELLENT way to justify a trip to the Bahamas for the holidays next year?
5) Do you have the skills to take care of any issues that may pop up in a fixer-upper or bank-repo’d home you buy?
I know several people who made great deals and learned how to take care of some basics that the previous owners let slip while the place was undergoing the foreclosure process. They knew they could figure out a leaky pipe or a sagging porch and avoided spending money on contractors.
Remember, Rebels, there’s no right or wrong. There’s also no guaranteed good/bad time to buy. The Real Estate Rebel formula is simple: go in with your eyes open and consider your risks.
Of course, if all else fails, ask the Magic 8-Ball. The signs always point to “maybe”…
Rebelliously,
LARRY
Wednesday, January 6, 2010
Putting Christmas Lessons into action in 2010-check out some other RE sites!
"I know on the face of it, this plan sounds idiotic and impossible, sending Macy's customers to Gimble's. But gentlemen, you cannot argue with success! -Miracle on 34th Street
One of my favorite things about the holidays (now that they’re over, at least) is the regular reminder about life lessons, captured in great stories like “A Christmas Carol” and movies like “It’s a Wonderful Life.” Both as a kid and as an…ahem…adult (well, kind of an adult) I feel that the little reminders about the way life should work are helpful, and gosh-darn it, I still like to think that every time a bell rings, an angel gets his wings!
One of the things that I think is missing from our world today (and maybe of yesterday too, since they put the idea into a movie made in 1947) is the idea that helping people find what they WANT, versus what you want to sell them, is a hallmark of fantastic service. You remember the scene from Miracle on 34th Street, right? When Santa tells kids where to go find the toys they really want, even if they don’t have it at Macy’s? At first, it seems incredible, but then, it works, and the people at Macy’s are heroes, even if they sent a customer to Gimbles.
I’ve been mulling over that idea for awhile, and thought I’d put it into action in a way here on the Real Estate Rebel by sharing with you some of the best, in my humble opinion, places other than here to get information on the Real Estate market. I don’t always agree with every conclusion they reach, and in some cases people may think they’re my “competition”, but the information is sound and, in true rebel fashion, I encourage you to use your own judgment about what you read.
Now, there are roughly a hundred zillion sites out there that a person can go to, from individual Real Estate Agent pages and the MLS all the way to high-end sites requiring a credit card for investment advice. I’ve narrowed it down to five places that 1) I use regularly to keep updated, 2) DON’T require payment for basic information and 3) present intelligent analysis as well as facts. I’ve listed them in no particular order, so click away and again, read REBELLIOUSLY!
1) Patrick.net has a forum called “Housing Crash” that has a lot of spirited discussion about what’s going on today, with a focus on the California Bay Area. It’s a good source of links to additional information, as users are constantly tossing up new sites and news items.
2) www.property-investing.org is a good source for broad spectrum news about Real Estate around the country. There’s a slight bias toward selling some services/books, but the round-up of trends and information is well worth the occasional pitch you’ll find buried in the links
3) www.bloomberg.com has good information from (mostly) market-leading business writers and the basic content is free. I keep my eye on this site for intel specifically from the Fed and other government-based entities that affect the market.
4) www.housingpredictor.com has excellent information about what’s going on in various states. Like Bloomberg (above), basic and useful content is free. If you want to pay for the deeper stuff, go for it!
5) Last but not least, I have to mention the Real Estate News and Commentary Blog at ShortSalesRiches.com, Chris McLaughlin’s website. Great intel there in easily digestible bites.
So there you have it, my Rebellious Readers, a veritable treasure chest of opinion, fact, and perspective on Real Estate around the Bay Area and the country. Go gettem!!
Oh, and one more time, HAPPY NEW YEAR!
Rebelliously,
Larry
One of my favorite things about the holidays (now that they’re over, at least) is the regular reminder about life lessons, captured in great stories like “A Christmas Carol” and movies like “It’s a Wonderful Life.” Both as a kid and as an…ahem…adult (well, kind of an adult) I feel that the little reminders about the way life should work are helpful, and gosh-darn it, I still like to think that every time a bell rings, an angel gets his wings!
One of the things that I think is missing from our world today (and maybe of yesterday too, since they put the idea into a movie made in 1947) is the idea that helping people find what they WANT, versus what you want to sell them, is a hallmark of fantastic service. You remember the scene from Miracle on 34th Street, right? When Santa tells kids where to go find the toys they really want, even if they don’t have it at Macy’s? At first, it seems incredible, but then, it works, and the people at Macy’s are heroes, even if they sent a customer to Gimbles.
I’ve been mulling over that idea for awhile, and thought I’d put it into action in a way here on the Real Estate Rebel by sharing with you some of the best, in my humble opinion, places other than here to get information on the Real Estate market. I don’t always agree with every conclusion they reach, and in some cases people may think they’re my “competition”, but the information is sound and, in true rebel fashion, I encourage you to use your own judgment about what you read.
Now, there are roughly a hundred zillion sites out there that a person can go to, from individual Real Estate Agent pages and the MLS all the way to high-end sites requiring a credit card for investment advice. I’ve narrowed it down to five places that 1) I use regularly to keep updated, 2) DON’T require payment for basic information and 3) present intelligent analysis as well as facts. I’ve listed them in no particular order, so click away and again, read REBELLIOUSLY!
1) Patrick.net has a forum called “Housing Crash” that has a lot of spirited discussion about what’s going on today, with a focus on the California Bay Area. It’s a good source of links to additional information, as users are constantly tossing up new sites and news items.
2) www.property-investing.org is a good source for broad spectrum news about Real Estate around the country. There’s a slight bias toward selling some services/books, but the round-up of trends and information is well worth the occasional pitch you’ll find buried in the links
3) www.bloomberg.com has good information from (mostly) market-leading business writers and the basic content is free. I keep my eye on this site for intel specifically from the Fed and other government-based entities that affect the market.
4) www.housingpredictor.com has excellent information about what’s going on in various states. Like Bloomberg (above), basic and useful content is free. If you want to pay for the deeper stuff, go for it!
5) Last but not least, I have to mention the Real Estate News and Commentary Blog at ShortSalesRiches.com, Chris McLaughlin’s website. Great intel there in easily digestible bites.
So there you have it, my Rebellious Readers, a veritable treasure chest of opinion, fact, and perspective on Real Estate around the Bay Area and the country. Go gettem!!
Oh, and one more time, HAPPY NEW YEAR!
Rebelliously,
Larry
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