When I meet people for the first time at an open house, they often inquire to see if I know of any good foreclosures or short sales. Since typically most of my buyers are looking for something slick that is move in ready, there is usually limited inventory in that genre of real estate. Every so often I do see a decent short sale in desirable buildings, so it's always good to be aware of the different opportunities that are available to you. A friend of mine who was a genius at finding amazing loan rates for perspective buyers has since moved to Texas and is now selling real estate. She sent me this well written article that offers simple explanations of the difference between short sales, foreclosures, and REOs. I hope you find it helpful! PS - If you happen to be moving to the Dallas/Fort Worth Area and need a fantastic realtor, you can check out here home page here: http://www.movetodfw.com/
Let's start with a basic definition of foreclosure, how it works and how long it takes. The foreclosure process is a means by which a bank can recover the amount owed on a defaulted loan, by repossessing the property that secured the loan. The average foreclosure starts when a homeowner misses a mortgage payment and the lender files a notice of default. This is a public record and can be a first step for buyers in finding distressed properties. If the property owner doesn't pay the owed amount in 60 to 90 days (or whatever timeline is dictated by the state you live in), a public auction notice is generally recorded that sets a sale date for the home. If the property doesn't sell at auction, the lender takes ownership of the property with the intent to sell it and recover its money. These bank-owned homes are often referred to as REO properties, a term that stands for "real-estate-owned."
And more importantly, here are 3 ways to buy a foreclosure
1. Short sale
When the value of a home has sunk below the balance of the mortgage or mortgages on it, owners will often try to get the bank to agree to a short sale. Under this arrangement, if you make a fair-market offer on a home that is less than the amount owed, a bank can agree to accept this offer and forgive the remaining debt on the property, staving off a foreclosure for the owner. It can be a good deal if it works, experts say. But getting the bank to agree can be a lengthy and aggravating process both for the seller and the buyer. There's a lot more paperwork for the owner to prove his insolvency, and if there is a second mortgage on the property, you have to persuade that lender to remove or reduce its lien, something that may or may not happen. Short sales do not wipe out these junior liens. It's best for: buyers who are in no hurry to move, or investors who are having a hard time finding deals in their community.
2. Auction
Another way of purchasing foreclosures is to buy them at auction on the courthouse steps. Plenty of investors do this, often because it's a way to buy an attractive property with multiple liens. But for most people, this option is fraught with risks. For one thing, you don't get to see the interior of the house before you buy, you don't get to conduct your own inspection, and often you have to evict the former owner. You also have to be ready with a check that day for the full amount you plan to bid. Moreover, you must do your own title search - there are no title insurance policies here - or else liens on the property could prevent you from getting clear title when you are trying to sell. And many states offer a right of redemption for the previous owner - a time period in which he can get his property back if he pays the lender the outstanding loan amount, plus interest and the lender's costs in foreclosure. You'd hate to buy a property at auction, pour money into it to fix it up and then have the owner reclaim the property and these improvements. It's rare, but investors typically try to head this off in right-of-redemption states by purchasing the "redemption rights" from the previous owner for a few hundred or a few thousand bucks before or after the auction. It's best for: seasoned investors only. There is too much risk involved for people who don't make their living in real estate. And frankly, investors say, often the minimum bid is no great bargain.
3. REO
These are the properties that went to auction but were not bid on, and so they reverted to the lender holding the mortgage. In a hot market, these properties will sell for full market value. But these days, with sales sluggish and banks holding large inventories of these REO properties, many lenders are motivated to discount the price to move the properties off their books. Just how much depends on the market, the financial condition of the bank and how many other foreclosure properties are in the area.However, it's more common to find REO properties running 10% to 20% lower than market value. That may not sound like much of a discount, but on a $450,000 house, a $45,000 discount can mean the difference between qualifying for a loan or not. The good news, experts say, is that REO homes are a lot less risky to buy than properties bought through a short sale or auction. For one thing, all of the junior liens have been wiped out. And, unlike an auction property, you can tour and inspect the home just like any other home on the Multiple Listing Service. But, investors say, they are not without their own set of complications, including damage from an unhappy former owner. Some agents recall irate borrowers pouring cement down the toilet to mess up the plumbing, or intentionally flooding the house to inflict water damage and mold. If a property has been sitting empty for a while, there's a chance it might have missing appliances, dead landscaping or damage from squatters. So it might be a good idea to bring a contractor along to find out what kinds of repairs are needed and what they will cost before you make a bid. McGee suggests that for every dollar you spend on repairs you should knock $2 off the price of the home. Investors caution that while you want to look for a fixer, you don't want to choose a place that needs to be gutted, because you will have a hard time getting financing for it. "Sometimes there's a reason the thing went into foreclosure," Clarke says. "Just because it's a foreclosure doesn't make it a good buy." It's best for: anyone who is interested in buying a property below market value and who is willing to do a little research.
The key pieces of advice for successful foreclosure buying, experts say, are to be educated, be thorough and be unemotional about the houses you bid on
Article Written by Melinda Fulmer for MSN Real Estate
Happy Fourth of July! It's time for Coronas, wieners (and burgers), friends, and fireworks. One of my favorite holiday traditions is cruising up to Malibu for the fireworks display. Be warned, PCH is going to be a nightmare all day especially once you get past Moonshadows so plan accordingly. Here's where you can check out the fireworks throughout the city:
Malibu - Every year private groups rent at least two barges for fireworks displays on July 4th. This year, to date, permits have been issued for the following privately sponsored fireworks displays: Saturday at 9 p.m. from a barge offshore of Malibu Colony, and 9 p.m. from a barge offshore in the area of the 27900 block of Pacific Coast Highway. (Malibu Times)
The LA Coliseum - 3911 South Figueroa Street, LA, CA 90037 -www.lacoliseum.com - A perfect and budget friendly, family outing for the Fourth of July, the Los Angeles Memorial Coliseum will host the Fourth of July Fireworks Extravaganza, a full 60 minute firework show that will light up the Los Angeles skyline in celebration of Independence Day. As the biggest fireworks show in the city, the Los Angeles Memorial Coliseum offers the best seats in the city to watch the breath-taking display for free! (Metromix)
Hollywood Bowl Fireworks with John Fogerty - 2301 North Highland Avenue, Hollywood, CA 90028 - $12-$116 - It's doesn't get much more all-American than fireworks and Fogerty. From his days with legendary swamp-rockers Creedence Clearwater Revival to a successful solo career, John Fogerty has established himself as one of America's favorite sons, if not a fortunate one. Click hereto buy tickets online. Starts at 7:30 (Metromix)
Marina del Rey - Marina Beach, 4101 Admiralty Way - Fireworks are launched from a floating barge in the main channel of the Marina, between Fisherman's Village and the Breakwater. Presented by the famed Zambelli Pyrotechnics. Have yourself an evening of it. Starts at 9pm. (Metromix)
Redondo Beach Fireworks- Seaside Lagoon - 200 Portofino Way, Redondo Beach, CA 90277 - A whole day's worth of fun at the beach-with science workshops, puppet shows and tons of live bands-culminating in an explosive fireworks display around 9:30 p.m. Gates open at 2 p.m.
Have a blast today! Be Safe! The Po Po will be on high alert as of midnight last night to midnight Sunday evening, so as always don't drink and drive!
For you rich kids not familiar with the weekend movie screenings at the Hollywood Forever Cemetary by Cinespia, I'm about to fill you in on one of my favorite summer activities. Hollywood Forever is a cemetery located smack dab in the middle of Hollywood on Santa Monica Blvd and Gower. Although the neighborhood is not exactly the most pristine, once you go behind the gates of the cemetery, you will see why some of Hollywood's elite are buried here. Within the cemetery grounds is an open field like area with a big wall front and center. During the summer, every Saturday (and now to due to such popularity Sunday) they screen old movies outdoors in this open setting. The movie starts at 9:00, but everyone gets there at 7:30 (when the gates to the cemetery open) to pick nick on the lawn. There is a DJ who spins pre movie music while you feast of Trader Joe's best munchies and down bottles of wine (yes, you can bring alcohol onto the grounds). It's not uncommon for the producers of classic films or the actors themselves to introduce the movie and watch them with the rest of us. It's $10 per person to get in and $5 for parking. Attendance has dramatically increased over the last few years, so I suggest getting there an hour before the gates open to ensure you get in (6:30pm). My friends and I have have a pre pick nick bottle of wine to drink in line while we are waiting to get in which makes the time fly. If you can find street parking, all the better.
Jaws is the feature film this July 4th. Unfortunately, I won't be able to make it, but this would be such a fun film to see at the cemetery! Here's the list of upcoming screenings:
Click here or above for more information about Cinespia.
As I had blogged yesterday, downtown is an area that I am not overly familiar with. Like I've said many times, I am definitely a Westside type of guy (meaning no further east then Hollywood) and typically so are my clients. Yesterday was my first excursion into the world of slick new highrises and urban (but chic) downtown lofts. I have to say, I dug the whole scene much more than I anticipated. A lot of thought and design has been put into these new urban communities that are springing up and if you are willing to try something off the beaten path, there is a whole lot of bang for your buck to be had. Yesterday I tweeted as I went through each property to give you a quick snapshot of what I was looking at, as well as my adventure navigating through downtown. There are two properties in particular that I want to highlight - they are the polar opposites of each other, but each has something unique to offer a buyer:
Ev0-South - This was a property that I was really looking forward to seeing. As most of you know, there are not many full service buildings in Hollywood and West Hollywood that are affordable, nor contemporary in design. Of course you have the uber lux Sierra Towers, Empire West, and Shoreham Towers to name a few, but these buildings are definitely dated and the structures themselves could all use a bit of a face lift. West Hollywood put a moratorium on new construction residential highrises in 1973, so these were the first and last of their kind. Evo South is brand new and is sleek in every sense of the word. Rising 23 stories into the downtown LA skyline, you immediately take notice of this building's presence. The tower is sculpted of glass and metal, containing 311 units. The lobby has the same kind of chic modern design element similar to that of Nobu in West Hollywood or the new BOA Steakhouse/Lounge in the 9200 building on Sunset. The residences themselves feature floor to ceiling windows with expansive views (depending on location), dark hardwood floors, high end appliances, and designer fixtures. The layouts seem very usable, although I only had time to look at a few of their floor plans. Some examples of pricing would be: 1br/1ba (726 sq ft-1158 sq ft) - $385,000-$709,000 and 2br/2ba (1132 sq ft-2057sq ft) - $630,000-$885,000. The HOA fees which include infinity pool, lounge, fitness center, 24 security, concierge, gas, water, trash will run you $479-$555 for a 1 bedroom and $527-$752 for a 2 bedroom. For all my rich kids going to USC, this would be a great place to call home. Listed by The Mark Company
Barker Block Lofts - I am not going to lie to you, as I was driving to Barker Block I was a little sketched out by the neighborhood. This area reminds me of my raver days of the late 90's when we would go to parties in these old, abandoned warehouses. I literally remember seeing a corpse of a homeless man lying in the middle of the sidewalk that ended up being removed by LAPD as we were leaving the party. Fast forward ten years and you have a totally different vibe. Where once stood a junkie asking for some spare change and a cigarette now stands the brand new downtown Urth Cafe. Across the street is the Barker Block Lofts. Located in a quiet industrial section of downtown, Barker Block made a fantastic impression on me. Done by the KOR Group who are also responsible for Broadway Lofts and Eastern Columbia (lofts), their signature high quality stamp is everywhere. What's cool about this area is that while you are in downtown, you are somewhat removed from the highrises, leaving you expansive views of downtown LA from many of the units as well as from the chic pool deck and fitness center. The lofts either have polished concrete floors or dark hardwoods. Hopefully I have the story straight, but Barker was an old industrial warehouse that was converted into these lofts. The developers expanded on the initial building , creating a "block" of live/work spaces. Many of the original features from the warehouse can be seen such as vaulted ceilings with wood beams criss crossing the space. There was just something very relaxed about the building and the residents that I happened to walk by. Again, I was surprised at how well I liked not only the lofts, but the area itself. Maybe not the right fit for some of my BH/WeHo rich kids, but if you are looking to try a bohemian lifestyle with posh amenities, this could be the place for you. Lofts start at $325,900 for 799 sq ft, but you can still get a loft at 1100 sq ft for $399,000! The higher priced units with city views range from $533,900-$749,000. HOA dues range from $355-$554. See photo gallery below of Barker Block.
It is slim pickings this week due to the upcoming 4thof July holiday weekend. Since there is not a whole lot new in West Hollywood (with the exception of The Vue- see below) or Beverly Hills, I am going to make my way downtown to see what's happening with all these new high-rises that are popping up. To be honest, I have never been a huge fan of downtown. In my book, walkability and convenience are huge components to happy living in Los Angeles. Since I have very few clients that work or play in the downtown area, I tend to avoid this place altogether. Conversely, I have heard some positive feedback about some new projects that have just sprung up at very competitive prices. I'll be twittering my thoughts on each property as I see them, so if you happen to be in one of these areas and want to check any of the below out, feel free. Broker's caravan is from 11am-2pm, but many of these high-rises have on site sales centers that hold regular business hours. Without further ado, here's what's on the map for today:
West Hollywood
The Vue - 912 North San Vicente Blvd, West Hollywood, CA 90069 - 3br/2.5ba, Units Range 1709-1830 sq ft, Starting at $1,189,000 to $1,229,000- Newest development in WeHo to hit the market. There are five, 4-story units that feature private rooftop decks providing exploisve views of the city. I have heard a lot of great buzz about this project and am really looking forward to checking these units out. Features include: balcony with fireplace, cathedral ceilings, upstairs loft/office space, lux chef's kitchen and bathrooms. According to the agent, there is already one unit in escrow. The location is amazing between Sunset and SM Blvd. Listed by Coldwell Banker Malibu Colony
Downtown
The Solair- Corner of Wilshire and Western - Prices starting at $800,000-$2,500,000 - From 1300-3000 sq ft - The Solair is not quite downtown, but close enough that I thought I would lump it in. This brand new building features 186 units with most boasting some sort of view. Amenities include 40,000 Sky Deck on 7th floor that features pool, spa, cabanas, indoor reading lounge, and glass walled fitness center. This project was initially marketed almost exclusively to the Eastern demographic, but I've heard the building is looking to really diversify it's residents. Full service with 24 security, concierge, etc. This is the first building of it's kind in this location.
Evo-South- 1155 South Grand Ave, Los Angeles, CA - Priced from mid $400,000-$1,000,000 (these are estimates, don't have an exact price sheet), From 730 sq ft-3500 sq ft - Evo South is part of a three building project, this being the final addition. With over 311 units, this an ambitious project. The building itself is full service, has a fifth floor pool deck, gym, and all the other amenities you'd find in a high rise such as this. Evo prides itself of being the only LEEDS Silver Certified building in LA (meaning it is very "green" and energy efficient). I have seen a lot of advertising for price slashing and deep discounting. This could be a very solid option for the rich kid who wants the downtown experience. I am curious to see how much bang you can get for your buck here. Listed by The Mark Company
Concerto- 900 SouthFigueroa Street, Los Angeles, CA - Varies - There is limited information as far pricing and number of units goes, but from what I can gather from the website there are 33 stories with prices ranging in the mid 300's for an 800 sq ft 1br/1ba and a 2br/2ba with 1184 sq ft going for around$596,000. Feature include salt water pool, tai chi lawn, fitness center. It's obviously still under construction, but I am going to stop by the sales center to get the skinny. Listed by Keller Williams Los Feliz
Barker Block Lofts - 510 SouthHewitt Street, Los Angeles, CA - From $329,000-$729,000, Loft style from 900 sq ft-1331 - I've heard a lot of good things about this project. It was done by the KOR Group who is known for their cutting edge design and vision (Broadway Lofts and Eastern Columbia to name a few). The building has a rooftop pool with amazing views, fitness center, and is in close proximity to Urth Cafe Downtown as well as other "hot spots" for that area. What I thought was cool is that they appear to do a lot of community events like Super Bowl parties, etc. I am curious to see what kind of buyer this building attracts. Listed by The Mark Company
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
