New Supreme Court Ruling May Impact Short Sales

March 26th, 2015

The latest case on the Supreme Court docket could affect the number and difficulty of future short sales, so if you are short selling, purchasing/planning to purchase a short sale, or if you are an agent who may be selling one, please read on. dreamstime_6795077

In Bank of America v. Caulkett, the Supreme Court will soon rule as to whether a borrower has the right to void a second lien through bankruptcy when his home is not worth the value of the first mortgage. In simpler terms, if you have two loans and file bankruptcy, and your home is not worth the amount of the first mortgage (say you owe $500,000 on the first loan and $100,000 on a second loan, and your home is worth $450,000), filing Chapter 7 bankruptcy would allow you to void the second loan. The home could then be sold via short sale and the second lienholder would get nothing and have no rights to intervene.

Back during the short sale wave of 2008-2011 many second lienholders were successfully able to block negotiated bankruptcy settlements that benefitted the borrowers and first mortgage holders; thus many short sales fell through, and those homes eventually ended up going into foreclosure. When the economy worsened many of these foreclosure proceedings got pushed to the back burner and homeowners stayed in their homes for long periods of time, even years, without paying anything. This led to damaged and neglected homes, and in some parts of the U.S. entire neighborhoods deteriorated. This of course resulted in cost increases for taxpayers and the bank bailout.

Not long after this all started many first lienholders began to offer small sums to the second lienholders (usually about $10,000) in exchange for their blessing on the short sales, and this became standard practice. But not all second lienholders acquiesce. If they are now given the legal right to block these agreements in bankruptcy it could create problems that would be passed along to taxpayers.

Two of the Justices – Kennedy and Sotomayor – have indicated that they do not think it fair that a second lienholder would be able to hold hostage a bankruptcy settlement reached by the borrower and first lienholder.

Keep an eye on this case and the outcome, which should be decided in June, especially if you are a homeowner in this situation, a short sale buyer or an agent who sells short sales. The decision could affect short sales as we know them…stay tuned.

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LaMar Real Estate Welcomes Eduardo Padilla

March 24th, 2015

LaMar Real Estate is pleased to announce that Eduardo Padilla is now a Realtor Associate. Eduardo has been working as a real estate and referral agent in Arizona and California for 10 years and has great people skills. He is intelligent, dedicated, detail-oriented and quite possibly the friendliest person you will ever meet. Eduardo pic

Eduardo is a welcome addition to LaMar Real Estate, and his presence will allow us to continue to stay true to our mission to help buyers and sellers in the best way possible, with service that is second to none and a focus on every detail – because real estate professionals should offer experience, patience, dedication and the benefit of a brokerage with legal perspectives.

Congratulations to Eduardo Padilla and welcome! Please help us welcome him and make him feel at home in the North San Diego real estate community.

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5 Steps to Determine the Validity of that List Price

March 19th, 2015

There are many buyers out there who do not know how to read and understand recent comparable sold properties (there are also many agents in the same boat, so if you are a buyer do not feel bad). Of course, if you are working with a real estate agent who is familiar with the neighborhood(s) where you are focusing your home buying search, then that agent will be able to help you understand how to sort through the comps and come to a valid price so that you can write an offer. house_question

The problem is that oftentimes agents may not be intimately familiar with a neighborhood (i.e. they do not themselves know why some homes have lower sales prices than others), so it is up to the agent to really do some research. Here are the steps to follow so that you know whether that asking price is in fact valid:

1.  Print out all recent sales in the last 6 months in the area. If there are none then your agent will need to go outside the neighborhood to find similar homes – those that have amenities and other features that are comparable to the home you are thinking of purchasing. If there are still none then s/he will need to find some that may have more or less to offer, and then weigh the factors to come to a reasonable price.

2.  Speak with the listing agent. Every agent should place a call or visit to the listing agent whenever there is a question about value. The listing agent is the one who listed the home at that price, so the best place to start is with that person. Your agent needs to ask what comps were used to decide on a list price (in cases where it is not obvious – if you are looking in a tract neighborhood and there are 5 homes that have all sold in the same range then it is usually clear). If the listing is in a neighborhood where homes have sold across a wide value range, then you need to understand why.

justice-scales3.  Call the listing agents who sold the comparable homes. You can often get even more information this way that you may never have been able to see in photos or a virtual tour. For example, I just listed a home in a neighborhood where there is a discrepancy amongst recent comparable prices. I happen to know the neighborhood well (I live there), but a potential buyer’s agent called to ask me about the comps (I had sold a few of them) and I happen to know a lot about them and why they sold at the prices they did. I drafted an analysis on all the sold properties, and this was a big help to the agent and his clients. When I am representing a buyer in that same situation I ask for the same thing – at least a verbal analysis if someone is not willing to draft one (I of course take notes and then draft it up for my clients).

4.  Understand that “price per square foot” is not the sole focus. If you look only at price per square foot and there are comps all over the place, you may be under-or over-valuating the home you are considering. There are many factors that need to be taken into consideration – location, upgrades, condition (even upgraded homes can be poorly maintained, and vice versa), amenities, views, lot size, and negative factors (noise, high traffic areas, hazard zones, etc.) Even two identical homes in the same community can have vastly different prices depending on the factors mentioned. You really need to get more information to understand the discrepancies before progressing. Always remember that every home has it’s own resume and story to tell, so just because another model match sold for a particular price does not mean that the same price applies to the home you are considering.

5.  Make a chart or comparison table to understand the comparable properties. You can include features that are positive and negative, and you can then compare them to the subject property (the one you are thinking about purchasing). Seeing it on paper can really help many buyers to understand differences and feel better about making an offer that will appraise (if you are getting a loan), and that makes sense in light of the other homes that have sold nearby.

In the end it is common knowledge that those who have more information are better informed to make big decisions. Since buying a home is one of those big decisions it is imperative to do your homework. Find a smart, experienced agent in the area(s) you like and use them to help you get to the point where you feel comfortable with the values in an area by heeding the above advice. That is their job. Happy house hunting!

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Lovely New South Carlsbad Listing

March 11th, 2015

Welcome to 1601 Sapphire Drive in Carlsbad, perched high on a hill in the gated community of Mar Brisa. Enjoy ocean breezes from this serene, bright and beautifully updated home, offering much to excite the senses and accommodate any lifestyle. 02_image_02_mls

The entryway welcomes you with an infusion of natural light, high ceilings and a cozy formal living room, complete with real hardwood flooring that extends through the downstairs living area.

11_image_11_mlsThe bright family room overlooks your private west-facing backyard, and connects to the stunning, recently upgraded kitchen, showcasing new cabinetry (including several glass door cabinets) with glider drawers and pull out shelving, and adorned with high-end granite counters, Italian tile backsplash and new stainless appliances. The large center island comes complete with a granite lazy Susan.

 

Features include:

  • 4 bedrooms plus optional 5th bedroom
  • 2336 square feet
  • Downstairs office/den/play area or 5th bedroom
  • Downstairs bathroom with shower
  • Hardwood flooring downstairs 06_image_06_mls
  • Designer carpeting upstairs
  • $40k kitchen renovation includes new cabinetry with glass doors and glider drawers and shelving, beautiful high-end granite counters, and large center island with lazy Susan, stainless appliances
  • Burglar-proof security screens at front door and back slider
  • Hunter Douglas window treatments in master and kitchen
  • Custom paint throughout
  • 24_image_24_mlsFans in all bedrooms
  • Formal dining room
  • Air conditioning
  • Central alarm system
  • New glass shower enclosures in upstairs bathrooms
  • Located adjacent to spa and tot lot
  • Private backyard with no houses directly behind
  • 3 car garage with epoxy flooring built-in overhead storage
  • Laundry room with sink
  • Low HOA dues, no mello Roos taxes, gated community
  • Community pool, spas, park and tot play area
  • Carlsbad schools
  • Close to beaches, shopping, dining, schools, parks and entertainment

For more information please contact listing agent Rachel LaMar at 760-310-9466 (BRE license #01399682). You can see more photos and a virtual tour by clicking here.

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Buyers: Now is the Time to Plan Your Spring Buying Strategy

March 7th, 2015

All the predictions about the Spring real estate market indicate that it is going to be a busy one. Focusing on my own North San Diego market, I agree and I am getting excited about several upcoming listings of my own. There is a buzz in the air amongst my local colleagues, and many have indicated they have listings coming up as well. With interest rates still low and inventory about to get a boost, it is a good time for buyers to make a plan for finding and purchasing the right home.checklist

Here is how a buyer can be ready to jump once s/he finds the right house this Spring:

1.  Get preapproved. Make sure that you have preapproval from a lender so that you know your budget and can be ready to make an offer when you find the right home. This will save you a lot of time and could prevent you from losing a home you really like to another buyer who was ready to go.

2.  Find a real estate agent in the area(s) you like. Having a skilled local agent on your side is the best assurance that you will be able to view new listings quickly. Another advantage is that many agents hear of “pocket” or upcoming listings before they hit the MLS, providing you with an opportunity many buyers may not have.

3.  Be ready to schedule a showing on listings that meet your criteria when they list. Get into those new listings as soon as you can. If you like the home you can strategize with your agent on how to make the most appealing offer to the seller; in doing so you may be able to avoid multiple offer situations.

4.  Understand the market(s) you are searching. Study recent closed sale prices and understand values in different neighborhoods. This will help you in your search. Your agent can assist you in preparing market analyses for you, and you can look at the photos of the homes to see what features may have (or have not) contributed to the sales price. You will feel much more comfortable when you make an offer if you are armed with all the right information.

Happy house hunting!

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San Diego Calendar of Events for March 2015

February 27th, 2015

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Get Ready for A California Foreclosure Wave

February 24th, 2015

There is a big wave coming to Southern California and it will not be found in the ocean. Foreclosures have hit their highest level in two years and should begin to affect real estate inventory soon, at least for a short period of time.dreamstime_5042227

According to new data released this month by RealtyTrac, one of the largest real estate data firms, the number of homes repossessed by banks in California in December reached the highest levels since December 2012 – nearly triple.

California’s Homeowner Bill of Rights, which is about a year old, has prolonged the foreclosure process for banks, who must now abide by the many protections provided homeowners under the bill, and now that the banks have had time to adjust to the new rules they are going after repossessions.

Notices of default, the first indication that a home is about to enter the foreclosure process, are currently at the same level they have been for the last six months, but will soon rise if all indications are correct.

Real estate agents and homebuyers will soon start to see more foreclosures and short sales popping up, just in time for the Spring selling season. But keep in mind that these sales are not the bargains they once were – even though banks want these properties off their books, they want to sell the homes for value as well. (click here for more information on the changing value of short sales).

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5 Ways to Best Sell a Tenant-Occupied Home

February 20th, 2015

Selling a home the right way can be tricky – you need to make sure the home is clean, clutter-free, shows well and is staged properly. You should  have beautiful professional photos and the home should be inviting and bright…a lot to contemplate when preparing for sale. If the home is occupied by tenants these tasks can be even more challenging. Here are 5 things you can do to make sure your home looks great with tenants living there. spring-cleaning

1.  Make assessments with the tenants. Before listing you should walk through the home with the tenants and your real estate agent. Make a list of things that need to be done in order to get great photos and optimal showing results – is there any clutter that needs to be removed? Does anything need to be remedied? Make a list for the tenant and then offer to help them out to get those items resolved.

2.  Include the tenants in the planning. Make sure you discuss with the tenants the ideal time(s) for showings – get them involved so that they do not feel their privacy is invaded. Find out if they would like to be notified by the agents themselves of potential showings, or if they prefer to have daily times where agents can just go and show (for example, if they will be at work). If there are any pets make sure to get instructions on what agents need to do to assure the pets are safe during showings. Consideration goes a long way and will make your tenant feel their needs are being addressed.

3.  Pay for a cleaning service. Tell your tenant that you will be paying for the home to be cleaned. If your tenants are messy you may need to have the cleaning service come every week or bi-weekly during the showing period. Most tenants will like this because they do not have to clean themselves. Make a deal with them that you will do this if they promise to make beds, put away clothing and food items, and keep everything clutter-free. If the home is carpeted you should also have the carpets cleaned, as well as the windows.

4.  Rent reduction. Many tenants have no desire to help you sell the property because it means they will need to move. In order to make sure they keep the house clean and show-ready you need to make it worth their while to do so. The best way to do this is to reduce their rent during the time the home is being marketed and shown. The tenant will agree to keep the home tidy and de-cluttered daily, in exchange for a reduced rent. This can be a win-win for everyone.

5.  Last resort: termination of tenancy. Some tenants just won’t cooperate no matter how much you do to help them. Rather than try to show the home in a poor state, if all else fails you will need to provide your tenants with written notice to terminate the lease (if it is possible to do so according to the terms of your lease). If the lease is still in effect and cannot be terminated it may be advantageous to offer the tenants a monetary sum to terminate the lease early. Make sure you speak with a real estate/tenant and landlord attorney in your area to understand the law and your rights as a landlord, as well as those of your tenants - you should do this before listing the home if you have a lease that is still in effect.

Over the years I have sold properties with tenants – from cooperative tenants to those who lived in filthy conditions and made nasty comments to potential buyers about the home (those tenants started out cooperative and said they were going to keep the place clean – they had to be evicted eventually). In general it is easier to sell properties without tenants, but if you have people who are willing to help out it can be done and it can be a positive situation for everyone if you take steps to be considerate and plan everything out.

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How Real Estate Compares as a Long Term Investment

February 17th, 2015

This is a very informative and helpful infographic showing that real estate is the best long term asset in America over time. Thank you to Jimmy Moncrief at Real Estate Finance HQ for the charts!

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5 Ways to Plan for a Successful Out-of-Area Move

February 11th, 2015

The best way to prepare for a move from outside of an area involves a bit of planning, and can start months or even years prior to moving…the more time you have to research and learn about the different cities and neighborhoods and what they have to offer, the better. I always advise taking time to go through the following steps so that when it comes time to find the right home you are not only prepared, but can feel confident that the neighborhoods you have selected are the right ones for you. images

1. Find a great real estate agent. Yes, it is important to find an agent who is familiar with the areas you are considering, and to do so early in the process. If you do not know which cities or neighborhoods may fit your criteria an agent can help you narrow down areas. You may find properties online that look great, but a local agent will know things about areas and neighborhoods that you may not learn online. Use your agent to help narrow down the possibilities by creating a list of “must-haves” and a list of “desires.”

2.  Start researching cities and important criteria. When planning a move the initial research will be tedious but should be done online. Before even looking at homes you should research areas – cities, specific neighborhoods. Look at maps and find out the proximity of neighborhoods to important places. If you do not know whether an area has homes that fit your budget it is a good idea to get help from your real estate agent. She or he may also be able to provide you with area maps that highlight different housing developments, so that you can see where they are in relation to important places.

Of course there are important criteria that you will insist upon, like being close to “good” schools, shopping, transportation or to your place of employment. Once you have narrowed down specific areas it is time to investigate these things. You can start online if you are not currently in the area, and when you visit you can of course expand your knowledge by driving around and visiting places that may sway your decision one way or the other. If schools are important to you then visit school websites, check out test scores and parent comments, and when you visit you can meet with school staff and even speak to parents to get feedback on the school.

checklist3.  Compare and contrast the differences in the areas that meet your needs. This is where your agent can help as well, especially if you live out of the area. Personally I like to put everything in writing, and I advise my clients make lists of each area they like. The list can be live, meaning that it may constantly change as more information is presented to you or as you visit. Make notes on different neighborhoods and even floorplans – whether you see them online or in person, and keep those lists updated as you move through the process.

4.  Visit the areas and spend time driving around, checking out neighborhoods. I always recommend doing so well before you are ready to move, even it it may be far off, because the way you perceive different neighborhoods can of course be different in person. Drive by homes in neighborhoods in the areas you have identified. I suggest visiting neighborhoods that appeal to you several times – in the morning and afternoon – to check things such as noise levels, whether residents are home during the day, etc.

5.  Make a list of your favorite neighborhoods and start visiting homes for sale. Even if your move is far off, it is a great idea to start looking at homes once you have narrowed your search down to a few neighborhoods. This way you will see what floorplans appeal to you and fit your needs. This makes it a lot easier when it does come time to purchase – you will be much more prepared and will be able to keep up with sale prices and comparables in the areas – all of which will benefit you when you are ready to purchase.

Buying a home should not be a rash decision, even if you need to move quickly. Use your time wisely to research and use your agent to help you. When it comes time to make an offer you will feel knowledgeable and confident because you did your research.

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