Shadow Sales ?

[sdrealtor]

If only one could connect the dots in a straight line….but of course the line zigs and zags in random directions.

[SD Realtor]

Actually when a private party makes a purchase they do not have to record it. It is simply thier own choice.

[SD Realtor]

Actually when a private party makes a purchase they do not have to record it. It is simply thier own choice.

[SD Realtor]

Actually when a private party makes a purchase they do not have to record it. It is simply thier own choice.

[SD Realtor]

Actually when a private party makes a purchase they do not have to record it. It is simply thier own choice.

[SD Realtor]

Actually when a private party makes a purchase they do not have to record it. It is simply thier own choice.

[Rich Toscano]

[quote=Effective Demand]Dataquick takes sales from County records. So the only way “shadow” sales would be happening and people not know about it would be if the new entity didn’t record the deed.

But ask yourself, even if a group did a bulk REO buys they are doing it to sell the homes so that supply is coming on market anyways.

Non-issue.[/quote]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.

So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place?

It would be cool if we could get some data on this but I don’t have the first idea how…

rich

[Rich Toscano]

[quote=Effective Demand]Dataquick takes sales from County records. So the only way “shadow” sales would be happening and people not know about it would be if the new entity didn’t record the deed.

But ask yourself, even if a group did a bulk REO buys they are doing it to sell the homes so that supply is coming on market anyways.

Non-issue.[/quote]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.

So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place?

It would be cool if we could get some data on this but I don’t have the first idea how…

rich

[Rich Toscano]

[quote=Effective Demand]Dataquick takes sales from County records. So the only way “shadow” sales would be happening and people not know about it would be if the new entity didn’t record the deed.

But ask yourself, even if a group did a bulk REO buys they are doing it to sell the homes so that supply is coming on market anyways.

Non-issue.[/quote]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.

So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place?

It would be cool if we could get some data on this but I don’t have the first idea how…

rich

[Rich Toscano]

[quote=Effective Demand]Dataquick takes sales from County records. So the only way “shadow” sales would be happening and people not know about it would be if the new entity didn’t record the deed.

But ask yourself, even if a group did a bulk REO buys they are doing it to sell the homes so that supply is coming on market anyways.

Non-issue.[/quote]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.

So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place?

It would be cool if we could get some data on this but I don’t have the first idea how…

rich

[Rich Toscano]

[quote=Effective Demand]Dataquick takes sales from County records. So the only way “shadow” sales would be happening and people not know about it would be if the new entity didn’t record the deed.

But ask yourself, even if a group did a bulk REO buys they are doing it to sell the homes so that supply is coming on market anyways.

Non-issue.[/quote]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.

So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place?

It would be cool if we could get some data on this but I don’t have the first idea how…

rich

[Effective Demand]

[quote=Rich Toscano]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.[/quote]

“Shadow sales” would only matter if the inventory isn’t coming back on market. If they are selling the homes off the MLS they are still taking out buyers. If you find a bulk sale where they are renting them out that would be news but that is a very inefficient (per unit cost of maintenance, insurance, filling vacancies, etc are all much higher for SFH) way of being in the rental market and I haven’t heard of any institutional desire for doing that outside of the GSEs talking about renting their REOs back to the owners in some states.

[quote=Rich Toscano]
So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place? [/quote]

The consensus? I see it mentioned once and I disagree completely. It isn’t legally required you record your deed (though anyone financing your purchase can require you to do so) you would do so for your legal protection. Since the bulk acquirer isn’t living in the property (which, like recording, provides construtive notice) then they are subject to losing the property through fraud or mistakes.

For example, lets say Bulk seller sells a property to Buyer A and buyer A doesn’t take possession and doesn’t record the deed. Then due to a clerical error Bulk seller sells the property again to Buyer B.. buyer B records the deed. Buyer B owns that property now (yes, bulk seller would owe buyer A the money but owing and getting money are two different things).

It would be a stupid risk to take with no reward for the buyer. You record your deed for your legal protection.

[quote=Rich Toscano]
It would be cool if we could get some data on this but I don’t have the first idea how…

rich[/quote]

I agree the data would be hard to find, because it doesn’t exist. These sales either exists and they aren’t recording it.. and that is happening in sufficient volume to matter to the marketplace. Not very likely at all. Or these sales exist and they are recording the deeds in which case Dataquick picks them up in their numbers. Watching the difference between these two charts:
http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx

And:
http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

Would give you the difference between MLS and non-MLS sales (the 2nd chart should always be higher). There is a timing issue between those two charts since the first goes off when the MLS says a property is sold and the second goes off when the deed is recorded..

I really think its a non-issue though and have yet to hear any compelling reasons to the contrary. In my humble market watching opinion the only “shadow sales” lost by current metrics are those 3rd party sales at the courthouse steps in which the investor plans on renting it out or the house was bought by a person planning on living in the home. In this scenario a trustee deed would be recorded and it wouldn’t be marked as a sale by DQ (it wasnt on the MLS so obviously the CAR wouldnt pick up the sale eitehr).

[Effective Demand]

[quote=Rich Toscano]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.[/quote]

“Shadow sales” would only matter if the inventory isn’t coming back on market. If they are selling the homes off the MLS they are still taking out buyers. If you find a bulk sale where they are renting them out that would be news but that is a very inefficient (per unit cost of maintenance, insurance, filling vacancies, etc are all much higher for SFH) way of being in the rental market and I haven’t heard of any institutional desire for doing that outside of the GSEs talking about renting their REOs back to the owners in some states.

[quote=Rich Toscano]
So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place? [/quote]

The consensus? I see it mentioned once and I disagree completely. It isn’t legally required you record your deed (though anyone financing your purchase can require you to do so) you would do so for your legal protection. Since the bulk acquirer isn’t living in the property (which, like recording, provides construtive notice) then they are subject to losing the property through fraud or mistakes.

For example, lets say Bulk seller sells a property to Buyer A and buyer A doesn’t take possession and doesn’t record the deed. Then due to a clerical error Bulk seller sells the property again to Buyer B.. buyer B records the deed. Buyer B owns that property now (yes, bulk seller would owe buyer A the money but owing and getting money are two different things).

It would be a stupid risk to take with no reward for the buyer. You record your deed for your legal protection.

[quote=Rich Toscano]
It would be cool if we could get some data on this but I don’t have the first idea how…

rich[/quote]

I agree the data would be hard to find, because it doesn’t exist. These sales either exists and they aren’t recording it.. and that is happening in sufficient volume to matter to the marketplace. Not very likely at all. Or these sales exist and they are recording the deeds in which case Dataquick picks them up in their numbers. Watching the difference between these two charts:
http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx

And:
http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

Would give you the difference between MLS and non-MLS sales (the 2nd chart should always be higher). There is a timing issue between those two charts since the first goes off when the MLS says a property is sold and the second goes off when the deed is recorded..

I really think its a non-issue though and have yet to hear any compelling reasons to the contrary. In my humble market watching opinion the only “shadow sales” lost by current metrics are those 3rd party sales at the courthouse steps in which the investor plans on renting it out or the house was bought by a person planning on living in the home. In this scenario a trustee deed would be recorded and it wouldn’t be marked as a sale by DQ (it wasnt on the MLS so obviously the CAR wouldnt pick up the sale eitehr).

[Effective Demand]

[quote=Rich Toscano]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.[/quote]

“Shadow sales” would only matter if the inventory isn’t coming back on market. If they are selling the homes off the MLS they are still taking out buyers. If you find a bulk sale where they are renting them out that would be news but that is a very inefficient (per unit cost of maintenance, insurance, filling vacancies, etc are all much higher for SFH) way of being in the rental market and I haven’t heard of any institutional desire for doing that outside of the GSEs talking about renting their REOs back to the owners in some states.

[quote=Rich Toscano]
So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place? [/quote]

The consensus? I see it mentioned once and I disagree completely. It isn’t legally required you record your deed (though anyone financing your purchase can require you to do so) you would do so for your legal protection. Since the bulk acquirer isn’t living in the property (which, like recording, provides construtive notice) then they are subject to losing the property through fraud or mistakes.

For example, lets say Bulk seller sells a property to Buyer A and buyer A doesn’t take possession and doesn’t record the deed. Then due to a clerical error Bulk seller sells the property again to Buyer B.. buyer B records the deed. Buyer B owns that property now (yes, bulk seller would owe buyer A the money but owing and getting money are two different things).

It would be a stupid risk to take with no reward for the buyer. You record your deed for your legal protection.

[quote=Rich Toscano]
It would be cool if we could get some data on this but I don’t have the first idea how…

rich[/quote]

I agree the data would be hard to find, because it doesn’t exist. These sales either exists and they aren’t recording it.. and that is happening in sufficient volume to matter to the marketplace. Not very likely at all. Or these sales exist and they are recording the deeds in which case Dataquick picks them up in their numbers. Watching the difference between these two charts:
http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx

And:
http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

Would give you the difference between MLS and non-MLS sales (the 2nd chart should always be higher). There is a timing issue between those two charts since the first goes off when the MLS says a property is sold and the second goes off when the deed is recorded..

I really think its a non-issue though and have yet to hear any compelling reasons to the contrary. In my humble market watching opinion the only “shadow sales” lost by current metrics are those 3rd party sales at the courthouse steps in which the investor plans on renting it out or the house was bought by a person planning on living in the home. In this scenario a trustee deed would be recorded and it wouldn’t be marked as a sale by DQ (it wasnt on the MLS so obviously the CAR wouldnt pick up the sale eitehr).

[Effective Demand]

[quote=Rich Toscano]

I don’t think it’s a non-issue. Maybe they are going to resell it, or maybe not, or maybe they will just trickle it out, etc. Regardless, if there are shadow sales offsetting shadow inventory I think that’s significant.[/quote]

“Shadow sales” would only matter if the inventory isn’t coming back on market. If they are selling the homes off the MLS they are still taking out buyers. If you find a bulk sale where they are renting them out that would be news but that is a very inefficient (per unit cost of maintenance, insurance, filling vacancies, etc are all much higher for SFH) way of being in the rental market and I haven’t heard of any institutional desire for doing that outside of the GSEs talking about renting their REOs back to the owners in some states.

[quote=Rich Toscano]
So it seems like the consensus here is that bulk buyers wouldn’t have to record the sale, and there may indeed be shadow sales taking place? [/quote]

The consensus? I see it mentioned once and I disagree completely. It isn’t legally required you record your deed (though anyone financing your purchase can require you to do so) you would do so for your legal protection. Since the bulk acquirer isn’t living in the property (which, like recording, provides construtive notice) then they are subject to losing the property through fraud or mistakes.

For example, lets say Bulk seller sells a property to Buyer A and buyer A doesn’t take possession and doesn’t record the deed. Then due to a clerical error Bulk seller sells the property again to Buyer B.. buyer B records the deed. Buyer B owns that property now (yes, bulk seller would owe buyer A the money but owing and getting money are two different things).

It would be a stupid risk to take with no reward for the buyer. You record your deed for your legal protection.

[quote=Rich Toscano]
It would be cool if we could get some data on this but I don’t have the first idea how…

rich[/quote]

I agree the data would be hard to find, because it doesn’t exist. These sales either exists and they aren’t recording it.. and that is happening in sufficient volume to matter to the marketplace. Not very likely at all. Or these sales exist and they are recording the deeds in which case Dataquick picks them up in their numbers. Watching the difference between these two charts:
http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx

And:
http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx

Would give you the difference between MLS and non-MLS sales (the 2nd chart should always be higher). There is a timing issue between those two charts since the first goes off when the MLS says a property is sold and the second goes off when the deed is recorded..

I really think its a non-issue though and have yet to hear any compelling reasons to the contrary. In my humble market watching opinion the only “shadow sales” lost by current metrics are those 3rd party sales at the courthouse steps in which the investor plans on renting it out or the house was bought by a person planning on living in the home. In this scenario a trustee deed would be recorded and it wouldn’t be marked as a sale by DQ (it wasnt on the MLS so obviously the CAR wouldnt pick up the sale eitehr).

[Author]

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