Real Estate Auction in Monterey: November 13, 2008
October 25, 2008
There’s a public “ballroom” auction coming up in Monterey, on November 13 at 7:00 PM. The auction is being held at the Hilton Garden Inn and they will be auctioning off properties from the Salinas-Monterey area.
As it happens, one of my own REO foreclosure listings is going up on the block – 6 Minto Road in Watsonville. The current asking price is $297,000 – I do not know what the opening bid will be, but I would imagine it will open up at something like half that price. There may be a reserve bid, but they usually keep that secret.
Interestingly, this is the only property in Santa Cruz county that is being auctioned off in this particular auction series. They do have some houses out in King City, Salinas, Hollister, and Gilroy, though. Also, the auction company is doing a whole series of auctions – for example, on November 15 at the San Ramon Mariott, they are auctioning off Bay Area properties (there are quite a few) and on November 16, they are auctioning off a good selection of properties from the Sacramento area at the Radisson Hotel Sacramento.
The auction is being put on by Hudson and Marshall, and they gave me a little F.A.Q., which I think applies to all Hudson and Marshall auctions, and is similar to auctions put on by other companies, e.g. REDC.
Q: Can anyone attend?
A: Yes! It is a live auction, open to the public.
Q: Is there a fee to attend/register?
A: No – it is free to register.
Q: What am I required to bring to bid?
A: You must have a photo ID, cashier’s check or cash in the amount of $5,000
Q: How much earnest money must I put down if I am the winning bidder?
A: You must put down at least $5,000 per property, which must be paid in the form of cash or a cashier’s check.
Q: What is the buyer’s premium?
A: This is a 5% fee that will be based off your high bid and added to it, which will then become the purchase price. For example, if the winning bid is $100,000 you will actually pay $105,000 for the property.
Q: How long do I have to pay the balance?
A: You have 30 days to pay for the property. (You should already have financing in place)
Q: Can I use my own real estate agent?
A: Yes, you can attend with your agent, and your agent will be paid at least a 2% commission.
Q: Do I have to pay back taxes or liens?
A: No, the properties are sold with free and clear title.
Q: Who pays the owner’s title insurance?
A: The seller will pay for and provide owner’s title insurance to the property.
Posted by Administrator at 7:39am
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Changes to the Santa Cruz MLS
June 05, 2008
It’s 6:30 AM, which means I must be hard at work. Coffee’s done brewing, time to pour a cup. Right out of the gate, I’m researching properties today. One thing I notice is that MLS numbers have gone from six digits to eight – woooah! MLS numbers have been recycled for some time now – there can be several MLS entries with the same MLS number. I think they expanded the digit count because the MLS is growing, it won’t just be the five counties around here (Santa Cruz, Santa Clara, San Mateo, Monterey, and San Benito) but will expand to include the Greater San Francisco Bay Area.
Another thing that’s happened release with “Release 3.8” of MLSListings.com is that you can now search for bank-owned REO properties. There’s a new attribute on each listing that says if it’s bank-owned. The thing is, of course, that the agent has to manually set that flag, and agents are not the most detail-oriented people in the world – especially busy REO agents, who often put no comments or pictures on their REO listings. We’ll see how well that works out – but no matter, because I have my own weekly Santa Cruz REO and Short Sale list that I send out, which I find by manually reviewing all the listings that come on the market each week and send the list out to subscribers.
Posted by Administrator at 6:48am
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From Santa Cruz to Vegas
May 22, 2008
I’m goin’ to Vegas. And no, I didn’t just win the Superbowl, but at times it feels like I did. Other times, it feels like I’ve just been pushed under a bus. Such is the real estate bidness.
I’m going to come right out and admit it: I love Las Vegas. Las Vegas is one of those really polarizing town – you either hate it, or you love it. I have yet to meet anyone who told me, “I feel kind of lukewarm about Las Vegas.” That town seems to bring out some really visceral reactions in people.
As it happens, I’m not going there to have a good time, although I may, in spite of what’s on the agenda. I’m going there to attend a couple of seminars – two in the same week! One seminar is so I can get started on getting my CRS Designation. I’m a great believer in Realtor designations – those are the strings of letters you often see after Realtor’s names: Joe Blow, Realtor, GRI, ABR, SRES. Sound familiar? I have two Realtor designations – GRI (Graduate of the Realtor Institute) and e-Pro (“e-Professional”).
Why do I believe in getting designations, especially since hardly anyone outside the business knows what they mean? For several reasons. One reason is that there is very little training and education that is required for Realtors, really. The barrier of entry is just so low into this profession, all kinds of hacks and wannabes fill our ranks. Getting designations is just one little way to differentiate yourself – at a glance – from the rest of the crowd. Another reason is that I actually care about being knowledgeable and professional, and a little education and training never hurts. And, while I said that hardly anyone outside the real estate profession knows what those designations mean, many of my colleagues in the industry (especially experienced, long-serving Realtors) do know what those mean, and when you see an offer coming in from someone with, say, a CRS designation, you kind of know that this person is likely to have something of a clue as to how the business actually works.
I actually have another designation, too, but it’s not a Realtor® designation. I’m an RDCPro – a Residential Default Certified Professional; in other words, I’m a certified “expert” in REO (“real estate owned” – bank-owned foreclosure property). And that brings me to the other seminar happening in Vegas the week I’m going.
There’s a super-secret, invitation-only, one-day conference going on. Actually, I didn’t get invited, sniff. But I heard about it, and I wrote in and asked to be invited, and they sent me an invitation. I also invited one of my colleagues, who is bound and determined to break into the REO business. This super-secret REO conference is to last just a single day, right smack in the middle of the CRS seminars. So I’ll do one two-day CRS seminar, take a day off to play in Vegas, then do this REO seminar, and then two more days of CRS seminars…and then on Sunday, I’ll fly home.
It’s going to be pretty punishing. Not the seminars, not Las Vegas – no no. It’s going to be punishing staying away from my business right now, for a whole week, during the busiest time of year – how many deals will I lose? Also, when I come home, how much work will have piled up on my plate? I shudder to think. But, onward and upward – I am committed to being the highest caliber Realtor I can be, and if I have to go through Vegas on that journey, well that’s just as well. I’ll be out of town from June 8 to June 15 – I’ll bring a laptop with me, of course, and my cell phone – I’ll be out of town, but not out of touch.
Posted by Administrator at 8:04am
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The Crazy, Mixed Up Market
May 18, 2008
I know that you know it’s a buyer’s market out there, right? I’ve said it a bunch of times. It’s also a declining market – that is, property prices are, broadly and generally speaking, declining. In a market like this, you’d think it’d be pretty easy to buy a house, right?
Think again. While C.A.R. puts out its advertisements saying that the selection of homes is great right now, you have to take that with a grain of salt. First off, the selection really isn’t that great. It terms of “days of inventory” there may be an historically average selection of properties. But the problem here is that most of those properties aren’t really in the market.
They may be on the market – that is, listed for sale and available for purchase, but their asking prices are way too high for the current state of the market. Or, if their asking prices are reasonable, more often than not, it’s a short sale, which means that the contract and price are subject to approval of the one or more lenders which have loans outstanding against the property. Given that these “short sales” often take a very very long time to gain the approval of the lender’s loss mitigation department, it’s difficult to say that these properties are really “in the market.”
So what does that leave? That leaves bank-owned “REO” foreclosure properties (not all of which are actually priced to sell) and those few not-overly-encumbered homes with enlightened sellers who realize where their homes need to be priced in order to actually be in the market and have a decent chance of selling.
So when you look at homes that are actually in the market and priced right, there really is not a good selection of these kinds of homes. For these kinds of homes, though, there is tremendous demand. I put an offer in on a property last week, for example – we didn’t get it, even though our offer was pretty decent. There were ten offers on the property, and someone came in there and hit it out of the park and got the property.
Sigh. It’s like 2004-2005, all over again – because, really, the right-priced properties sell very quickly still, often with multiple offers. If you’re in the market to buy today, the same rules apply for making an offer as applied back in the good ol’ days – weak offers get batted aside and only the strong survive.
Now, here’s a tale of two sellers. I have one seller who got an offer on their place. The buyers had the effrontery to ask that the seller pay for Section 1 termite repairs. The gall, I thought. This is Santa Cruz. We don’t do that here. But in a market like this, if ever there was a time to try and get the seller to pay for Section 1 termite work, this is it. This tactic only works when there are no other offers on the table and demand for a particular property has shown to be only warm instead of piping hot. As it happens, this is the only offer we’re working with right now, so we’re going to take a long hard look at them section 1 repairs.
Now I’ve got another seller. It’s “the bank” – an REO property. Three offers on it in a week. Before one of the buyers was chosen, I went over the terms of the counter offer the bank was thinking about making. “Now, let’s be clear,” I said. “This property is being sold as-is. Under no circumstances will any credits be given or repairs made. Is your client aware of that and accepts this?” The buyer’s agent replied: “Yes, my client knows that, and that’s fine.” And then today, I got the phone call, “Well, the buyers are going to ask for some credits to repair some of the stuff that came up on the home inspection…”
That’s fine. That’s a complete waste of time, but it’s fine. Why is it a waste? Beyond the fact that the seller, a bank, already said it was an as-is sale and no repairs would be made or credits issued for same, there’s another salient point: there were three offers on the table. We got them in a week’s time. What does that tell you, in a market like this? Two things: the price was low, and demand is high for this property at this price. The bank doesn’t need that particular offer. It accepted the offer, with the understanding that the buyer wouldn’t turn around and try to nickel-and-dime them over repair items. But in a multiple-offer situation like this, any one buyer really is holding the weaker hand.
But go ahead and ask for your credits, if you’ve got the time to waste. Otherwise, suck it up and complete the transaction, or move right along. For right-priced properties, another ready willing and able buyer will be along shortly – and you need to know this when you’re negotiating.
Posted by Administrator at 8:57pm
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Real estate lawsuits – your ticket to real estate riches
April 26, 2008
I just closed escrow as the buyer’s agent on a REO property – that is, the house had been foreclosed on, and the bank owned it. When a bank is selling a property (or, typically, it’s an asset management company that sells the property for the investor, marketed on the MLS using the services of a Realtor), there are few disclosures made about the property – because, of course, the owner of the property is an investment firm in Abu Dhabi or the pension fund for a plastic toy factory in Shenzhen, China – and what, really, could such an owner know about the property?
Exactly. So when you’re buying a property from the bank, you really have to be extra diligent in your investigations of the property. In this particular case, we stumbled onto some significant material facts that had not been disclosed to us by the seller – which is not surprising, because I’m sure the seller didn’t know. The buyer and I were at the property measuring the rooms or something, and one of the neighbors came over to have a chat. “Do you know about the lawsuit?” she asked.
“Lawsuit? What lawsuit?” I replied. That is what you really like when you are starting to wrap up your investigation of a property – to hear that there had been a lawsuit. “Oh, don’t worry,” she said, “it’s all been settled now.” She went on to say that there had been, in effect, a property line adjustment, and the subject property (the one I was helping my client to buy) had relinquished some “useless” land behind the garage in exchange for some use of some of the neighboring ‘s land, which was a non-exclusive easement benefiting the subject property but had been used for years and years exclusively by the former owners.
Fair enough, and any such lot line adjustment would, naturally, appear on the title report. The problem was, we had not been given a title report yet, although I had requested a copy about a week prior. As often happens with the purchase of an REO property, the title & escrow company is some out-of-town outfit, often from L.A. I immediately contacted them, and said, hey, we really really need our title report, now. It took them several days before they actually coughed up a title report.
I forgot to mention – this neighboring parcel – it’s a vacant lot, and it’s for sale. At some point during all this, I had talked to the listing agent for this parcel, and he said he’d heard about the lawsuit, and said he heard that there were some un-recorded grant deeds lying around, but didn’t really know much about it and would check with the owner and get back to me.
I didn’t sit idly by, though. I went on to the county recorder’s office and looked to see if I could find any grant deeds and such that would be required in the event of a lot line adjustment. I couldn’t find any – but then, I’m not a professional title researcher. After a few days, the title report showed up, and…
No mention of any lot line adjustment. The property lines matched precisely the tax assessor’s map which I had already downloaded from First American Title’s beloved Fastweb system. Hmmm. So where, then, was this supposed land swap? What had the neighbor been talking about?
In a burst of inspired genius, I found my way on to the superior court’s web site – it turns out, you can search the case history index on-line. Ahh, voila. I did in fact find that there had been a court case between the former owner of the subject property and the current owner of the vacant lot. Unfortunately, you can’t actually view the case records on-line, you need to schlep yourself over to the courthouse and ask to see the records in person.
So I did. A pretty thick file, actually – two volumes, one of which they had to dredge up from the basement. The lawsuit was brought by the owners of the vacant lot, suing the owners of the subject property (again, the one I was helping my client to buy) for encroaching upon their land, using the non-exclusive easement in an exclusive manner. The judge never made a ruling, but rather, it was settled in a conference.
The result of the settlement was that this lot-line adjustment was to be drawn up, deeds signed, a new fence to be built, etc. The new fence had been built, actually. But where were those pesky deeds?
I contacted the vacant parcel’s listing agent again and told him what I had found down at the courthouse, and he said, “Well, I talked to the seller, and she invites you to call her, she’ll explain everything.” He gave me her number, so I gave her a ring. She’s a very nice lady, and even though this lawsuit and lot-line imbroglio had been hugely taxing for her, she was as pleasant as can be and very helpful.
She explained that yes, per the settlement, she had hired a land-user planner, had surveys done, grant deeds drawn up, got all the signatures in place, had done everything you’d need to do to get a lot-line adjustment done and then, supposedly…the city lost the application to do the lot line adjustment. It just vanished, and the process died. She kindly gave me copies of all the deeds and surveys and everything, and wished me well.
Upon keen examination of the provided documents, my client noted a salient detail: the land behind the garage was being given to the neighbor’s parcel, but the easement that was being encroached on was not being grated to the subject property – it was changing from a non-exclusive easement to an exclusive easement. That’s not the same thing as being granted – in effect, then, the subject’s lot size would be decreasing by about 10%.
To make a long story short, after a week or so of hemming and hawing and talking it over with various parties concerned, we made a devil’s pact with the bank – we would take the property as-is, and proceed to close immediately, if the seller (“the bank”) would drop the price by about 10%. The bank took this offer, and my client proceeded to swiftly close on the purchase of the property – the catch is, this lot line adjustment is now in his hands.
There are all kinds of interesting angels to explore here, like those grant deeds – so far as I know (and of course, I’m not a lawyer!) a signed and notarized grant deed is legal, even if it is never recorded. That’s one big reason why you have title insurance, in case someone shows up down the road with a legal, un-recorded grant deed and says “Hey, uh, actually, your house? That’s mine.”
Another legal angle is the addendum I had the buyer sign where the agrees not to sue anybody (like me, or the seller, or the seller’s agent) for any reason related to boundaries and easements and adjusting or failing to adjust the lot lines. How would that one hold up in court? Hopefully I’ll never need to find out.
My client ended up buying this property at a very good price, thanks to a hard-fought, bitter lawsuit. There are many paths to real estate riches, and this particular bath was bumpy and winding, but my client is going to get there, just the same.
Posted by Administrator at 10:32am
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