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
Wednesday, February 24, 2010
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
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