Ken Cash, Lake Tahoe: Lake Front Homes, Luxury homes, Condominiums, Second Homes

So here is the storyline. This past week, I had the usual buyer who says, 'why buy? Shouldn't I just rent? After all look at the costs of owning. Sure the interest rates are low, yes I have good credit and can qualify. Yep, I have 40+% for the down. But why? I mean look at the costs. I am going to pay $3000 month in payments, the taxes are $19,000 a year, the homeowners association is $385 a month. OK, I have $60,000 in deductions. So what? I can rent this same place for $2000 a month."

What do you say to that person? So, I went to the office and ask some of my fellow agents. You know, they said, 'yea, their right!' 'Not only are they right but they could just stay at the Hyatt Spa and Resort, have room service and spend even less'. Several of my peers even said that is exactly what they are doing. Selling their homes, and renting. Some have moved to less expensive areas and took advantage of the REO's. All had the same idea. Reduce the big overhead of owning.

So I went home and talked to my wife, also a REALTOR and ask her the question, not about the potential or not potential buyer, the other agents, but about us. Why are we spending just over $80,000 a year on a home that is not appreciating and who knows when that might turn around. And add to that, how much will it appreciate? So, now we think we will sell, take our profit, rent for awhile and travel more. You know, a month in Australia, maybe a month in Europe and England with relatives, jump over to Ireland and Scotland. Go back to Asia and stuff. We have an RV and should do more travel in the US too.

OK, so we are not really in the mindset to rent. But why not? Maybe we should buy a little place and have a base. You know, get ride of the big house with too much square footage for two people and go to something much smaller. After all, the big house was with the idea that our adult kids, our family and friends from othe places would come and visit. Well that turned out to be far less than anticipated. We can always work those small problems out.

So if we could cut expenses in half or more that would be a good thing, right? Heck, I'd even rent them a room or get them a condo rental for the days they are here. Oh, by the way, we live in a resort area, so that probably makes some impact on that buyer I first mentioned.

What do you think??

Until modern times peaceful Lake Tahoe lay mostly undisturbed by man, except for the seasonal summer visits by the Wahoe Indians in search of quail, grouse, trout and other game. They built no permanent structures. John C. Fremont entered the eastern Sierra slopes near Stevens Peak in 1844 seeing the alpine lake to the north but did not enter the basin. Except for the Pacific Coastal region, the area remained uninhabited for many years. In 1848 flake gold was discovered in Colma on the American River on the Eastern slopes of the Sierra's. Over the next several years tens of thousands of would be miners, farmers, businessmen and tradesman migrated west traversing to the south and north of then Lake Bonpland later changed to Lake Bigler after 1852. There were many trails over the Sierra's but none penetrated the lake basin. Washoe Indians were still the only visitors from spring to fall in the area and Lake Tahoe remained undisturbed to around 1855.

East of Lake Tahoe in Gold canyon or Washoe canyon where miners were recovering gold in streambeds, a bluish silver quartz was discovered near present day Virginia City and suddenly thousands of pedestrians rushed eastward to the new discovery. Over the mountain passes along the lake to Glenbrook and from there eastward to Virginia City.

Glenbrook was more than a roadhouse stop for stages and the silver crazed looking for riches. The new silver camps needed timber for business buildings, houses and for the square set underground supports of mine tunnels. The magnificent stands of trees in the basin became a focal point. A man, Captain Pray built a sawmill on the lake early in the summer of 1861 at this only permanent community. In Lake Valley on the west shore, a small water-powered mill sent logs across the lake which were collected in the corner of what had become Glenbrook Bay. Wagons drawn by horses carried the cut lumber to the top of Spooner summit where they were sent down by flumes and on to the silver mines. Over time several other sawmills popped up, many much closer and easier to send timbers to the silver mines. At one point there were at least six mills in and around Glenbrook.

In 1864 Captain Pray saw the beginnings of tourism. He began operating a small excursion steamer, the Governor Blaisdel, for the pleasure and recreation on the lake. This was but the beginning of further lumber and steamship operations at Lake Tahoe. A resort and spa also provided boating and other recreational fun for the wealth Virginia City mining and business owners. Tiring of the continuing mine blasts, the dust and dirt and the fast pace, the wealth could enjoy the Glenbrook House entertainment and fare. The surrounding meadows provided cool relaxing hikes, horse rides while the lake gave boating and swimming and a sandy beach.

Where the Truckee river flows from and cluster of dwellings built in the mid-1860's became known as Tahoe City. People from San Francisco with summer homes there came and stayed the entire summer. With a hotel, saloons, store and dozens of small craft at anchor, the Governor Blaisdel ran between Glenbrook and Tahoe City on a regular routine. About this time it was estimated that as many as 6600 men on foot, 880 horsemen and several thousand stagecoach trips took place in one summer alone. This slowed in the late 1860's as the new train in the new town of Truckee made travel easier and faster. However this did not slow activities at Lake Tahoe. The demand for timber and water became big business. With the major revival of mining in and around Virginia City, the demand for both grew. With Lake Tahoe's virgin stands of timer and abundant water, the attack of Lake Tahoe was underway.

By Ken Cash, Broker, CRS Coldwell Banker Incline Village Realty Lake Tahoe CA & NV

WHATS THE DIFFERENCE? Bank Owned, Short Sale or Foreclosure...

In my daily business, receiving calls, making calls to my peers, to you and many others and what I've discovered is that most people both inside the industry and outside don't understand the differences between them.

What I have learned and applied to my business I hope will give you an idea about how to go about buying a Lake Tahoe foreclosure, short sale or bank owned property. There are some great deals to be had in Incline Village, but buying them can be very complicated. I urge you to call me to help guide you through this unusual and what I think is a rare opportunity.

Bank Owned: When a home goes to the Trustee Sale and is not sold there on the court house steps (yes they actually bid on them right there in Reno on the court house steps), the property goes back to the bank (or mortgage lender) as the case may be, and becomes an REO. That stands for Real Estate Owned or better known as Bank Owned. They are also referred to as a Foreclosure as unfortunately for some family or investor, the property has been "Foreclosed" on. In almost every case, the homes are sold "AS IS" so you must be very careful. These properties are generally listed with a Real Estate Agent who puts the information in the Multiple Listing Service also known as the MLS. Unfortunately, far too often the bank or mortgage representative known as an Asset Manager, list the property with this agent who is not in the local marketplace so locating and identifying not only the property, but where to find the agent can be time consuming. These homes and properties generally have had liens, additional mortgages, homeowners fees, utility fees placed against them. So working for you, I need to make sure these are all found in our due diligence and removed so we can move along much faster and in the end have a cleaner transaction. I don't want any unknowns after you close escrow that you and I must resolve.

When we present an offer the acceptance time typically takes from a few days to a couple weeks and on occasion much of our work is done verbally until right at the end. I must move your offer forward but not push so hard we loose the buying opportunity. The work loads of the asset manager to whom the property has been assigned are very stressful. Not all deal well with this. I am very accomplished at this, have managed many transactions, so this will all be OK. In some markets, the property can be very distressed, however, here in Lake Tahoe, they seem to always be in reasonably good condition, however, and we will still want to have inspections done. And as in all of these buying opportunities, you need to be pre-qualified by your lender or if paying all cash, provide me with proof of ability to perform. We need to submit that paperwork with our offer on day one. If there is another interested buyer, this may just give us the extra power to win the home for you.

Foreclosures: The word can be misleading as often the property is in a pre-foreclosure where the owner is behind in their payments by several months and the bank has issued them by mail a "Notice of Default" and probably set a date for the Trustee's sale I mentioned above. During this time between the issue of notice of default and the time of the trustee's sale on the court house steps, the homeowner can sell their home and pay off the bank or mortgage company. There are also other measures that can be taken to avoid the foreclosure such as government programs now being proposed. Owners can contact their lender and defer payments or make other arrangements. I truly hope they do and they can. Neither you nor I want to see anyone loose their home.

But if not, the day will arrive and the home will be sold or at least an attempt made to sell at the Trustee's Sale. On this day, the home is sold in a bidding environment and the purchaser must pay for the home in cash or cash equivalent right there right then, at the time of sale. There is no time available to arrange financing. Remember the liens and other mortgages that I mentioned above? You may be buying those as well. You had better be taking great care and caution and know exactly what you are buying. The reason this happens is the trustee may be selling the property for the holder of a second or third mortgage and if you buy under that scenario you could be also be buying the first mortgage and who knows what else. And don't forget, you will be liable for taxes, homeowner association liens, utilities and other liens as well. So as the saying goes, "Buyer Beware".

Short Sales: If the property owner wants to avoid foreclosure and the bad credit that goes along with it, they will attempt to sell the property before the foreclosure takes place. A short sale will be between you and the property owner of record, but the bank must agree to the terms of the sale by discounting the loan balance. Your offer to purchase will likely be less than is owed to the bank or mortgage lender. We will be negotiating with the home owner and the owner in turn will negotiate with the bank who must agree to accept less than is owed when the home is sold. Likely the property owner will owe the difference to the lender bank even after proceeds are given to them. That is why this part takes so long. This is often the trickiest part and why most short sales do not close escrow. The property owner can accept your offer, but that doesn't mean it's a done deal. No no no. The bank must accept the deal too. I have many times experienced the banks rejection of the offer that we and the seller worked so hard to reach. Too often what happens is the buyer and seller agree on the price, and the bank takes weeks to even months to approve and in the mean time, the Trustee's sale and foreclosure happens first. So when I am not too excited about the short sale, it is because we both need to plan on us having 2-4 months for the process to take place and hope we can successfully close escrow. During that time too, you will probably be spending money on inspections, appraisals, escrow fees and if the opportunity fails, you are out that money. There is also in most cases a statement that says, "Not a settlement-in-full" and the deficiency balance remains against the seller. When the seller finds that statement, they too can become less than excited about the process.

I hope this has been of help to you. You should call or email me with your questions. We should also go out and find these great properties, these great homes. Fortunately for everyone, this opportunity will not last forever. As a friend said to me recently, "the money never goes away. It just changes pockets." Let's change some of this money and opportunity to your pocket.

Short Sales: Everything you wanted to know and did not know who to ask.

Nowadays, many homeowners are recognizing that their home can not be sold for the amount of money owed against it. This is called by the media, "being upside down or under water in the mortgage". If you are such a homeowner in Lake Tahoe, please call me immediately to discuss how we can work through this situation. The strategy is called "listing the property as a ‘short sale'." The advantages to an over mortgaged homeowner are avoiding foreclosure or bankruptcy and the long term bad credit that goes along with those outcomes.

For this to work the house must be listed at a very attractive price in order to get rapid market response. Usually the asking price is the amount owed or less than the amount owed to all the mortgage holders.The advantage to the banks: they do not have a foreclosure on their books. Plus they do not have to maintain the property during the marketing phase after the foreclosure. The advantages to the buyers, they are getting a very good deal, well below former appraisal values. Moreover, the homeowner has not stripped the house of appliances and fixtures. Typically the home is in better condition and remains better maintained until close of escrow. Another advantage, during the negotiations with the mortgage holders the Buyer has time to obtain loan approval if financing is needed.At foreclosure sales on the court house steps usually only cash contract offers are considered.

Most important for us to understand in this situation, the seller may agree to a contract and price, but that contract and price must be agreed to by the lender or lenders that have liens against the real estate. Until all lenders and lien holders agree, the seller cannot perform on the contract unless someone comes up with more money to pay off the mortgages. If you are considering buying such a property, I can help you negotiate with the owner, but then the owner and the owner's attorney have to negotiate with all the lien holders and get their acceptance of our price, terms and conditions. Be aware this is frequently a time consuming, patience required, aggravating and frustrating process. Only the flexible, patient, dedicated buyers need apply.

For those of you willing to live with prolonged uncertainty, I will be your champion negotiator. In the short sale, for example, the big lake view home is listed for $1,100,000. However, the owner has a first of $750,000 and a second (home equity loan called a HELOC by the industry) of $600,000. You as a cautious investor want to offer $900,000 because you see it as a fixer upper that needs over $100,000 in cosmetic and structural corrections. Even if you and the property owner agree and sign a contract for a $1,000,000 purchase price "as is" subject to your satisfaction with inspections, we must get signed acceptance by the two mortgage holders to take less than is owned to them before we can close escrow. Typically the contract contains a clause "this contract is subject to mortgage holder approval." Then new negotiations begin. All short sales I have heard that succeed were written "the purchase is as is." The lenders do not want any repair or correction contingencies.

Possibly the property owner will owe the difference to the lender banks even after purchase proceeds are given to the lenders. That is another reason why negotiations take so long. Many times I have experienced the banks rejection of the offer that we all worked so hard to reach. During all these negotiations the clock is still running for the lender to complete the foreclosure process. Because we both need to plan on two to four months for the process to take place, patience is very important. There is no guarantee we will succeed at convincing the lenders to cooperate. During those months you will probably be spending money on inspections, appraisals, escrow fees etc. If the negotiations fail, you are out that money. There is also, in most cases, a statement that says, "Not a settlement-in-full," and the deficiency balance remains a legal encumberance against the seller. When the seller finds that statement in the paper work, they too can become less than excited about the process. However, when the "short sale" succeeds, and that is more likely if the buyer is a cash buyer with no contingencies, it can be a "win-win" transaction for all parties. The Seller is released from a stressful situation.

The Buyer purchases a desirerable property in better condition than most foreclosures for an exceptionally attractive price. If you have further questions, call or email me with your questions. Sometimes the best deals are with the long time home owners who owe very little against the property but really want to "liquidate their holding."

March 10,, 2009

Nancy Fennell, CEO of Dickson Realty and Daniel Jacuzzi, President/CEO of the Select Group, jointly announced the transfer of Dickson Realty's Lake Tahoe offices to the Select Group. Dickson Realty is retaining its Reno/Sparks and Truckee, Calif., office locations. The South Lake Tahoe, Zephyr Cove, Tahoe Keys, Incline Village and King's Beach offices of Dickson Realty are involved in the merger and will become Coldwell Banker offices effective March 11, 2009. "Our country is in a severe economic contraction and most businesses are contracting accordingly. We at Dickson are no exception," said Nancy Fennell, CEO of Dickson. "The Lake Tahoe residential market sales activity is off almost 50% from 2005 and we had to take a hard look at whether Dickson could maintain the level of presence and devotion in this environment that we desire for the markets we serve.

It was a difficult decision, but we have chosen to refocus our efforts on our Reno and Sparks core markets. "The new owners are someone with a strong position in the lake area market, and has resources available to the offices and the outstanding agents in them", continued Fennell. "The Lake Tahoe residential market is really much more California driven, than Reno driven. The Select Group has its roots in the California market, which will be great for the agents in the offices involved in the merger. Jacuzzi recently completed a mergers of several of the most established real estate brokerages in the Reno and Lake Tahoe areas including: Coldwell Banker Village Realty, Coldwell Banker Incline Village, Century 21 Mountain Properties, Century 21 Tahoe Pines and Century 21 Goldcrest Properties.

Dickson's former Tahoe offices will become Coldwell Banker offices under the new ownership. "The Lake Tahoe and Northern Nevada region are very attractive markets for Select's clients throughout Northern California", says Daniel Jacuzzi, President and CEO of The Select Group. "We are excited about the merging of these outstanding firms that both embody our focus on exceptional client‐centric service. In addition, by linking together our Nevada team with our California feeder markets we will be able to create exposure for our Buyers and Sellers that simply cannot be matched by any other company"

About The Select Group

Today the Select Group is a regional, vertically integrated real estate company now operating 20 offices with over 700 Sales Associates in the Reno, Sparks, Fernley, and the Lake Tahoe areas of Nevada and the Sacramento Region, Chico, Paradise, the Sierra Foothills and Truckee in California. The Select Group consists of the well known brnads of Coldwell Banker, Century 21 and ERA. To provide comprehensive real estate services to its clients, The Select Group additionally operates Stanford Mortgage, Select Property Management, The Select Business Development Center, Selectand the Select Client Club.