[housingfreefall]

Hi Guys

The dogs name is Zander. During a home invasion he was either let out or dog napped. The owners are in deep distress and love their dog very much. Reason I know the story is my dog goes to doggie day camp and the lady asked if i would pass out flyers sine I live across from Balboa park.
Keep you eyes peeled and please know it is not a hoax.

ZB

[housingfreefall]

Thought? A rent analysis of this particular area ranges from 1750-1850 making the average $1873. Based on a 6% cap rate which is low the value of this property is $380K. Since they gave a value range of 500K-562K they are looking to lock a potential sucker in at 528ish.
Instead of meeting with the agent, call title companies ask them to run a property report on this property ~public information isn’t America great! Of course mention you will use them if the deal goes through ~makes the report free!
Now this is the info you will use for your offer~ the report will tell you any liens on the property 1st 2nds and property taxes allowing you to know exactly what the banks are owed on this particular property~ Then call the agent back and go in to the property and evaluate cost for fixing it up.
Based on the amount owed on the property, minus the work the property needs. Using comps for the area, the amount owed, minus the work needed= price.
Side note on shorts ~be prepared for a long process especially if you plan on low balling.
Low balling is an over used term similar to “I love you” and you will begin to see it even more loosely used as this thing unravels. Truth is a ‘low ball” is a mathematical process and when used correctly and in the right environment it can land us a deal.

[housingfreefall]

Thought? A rent analysis of this particular area ranges from 1750-1850 making the average $1873. Based on a 6% cap rate which is low the value of this property is $380K. Since they gave a value range of 500K-562K they are looking to lock a potential sucker in at 528ish.
Instead of meeting with the agent, call title companies ask them to run a property report on this property ~public information isn’t America great! Of course mention you will use them if the deal goes through ~makes the report free!
Now this is the info you will use for your offer~ the report will tell you any liens on the property 1st 2nds and property taxes allowing you to know exactly what the banks are owed on this particular property~ Then call the agent back and go in to the property and evaluate cost for fixing it up.
Based on the amount owed on the property, minus the work the property needs. Using comps for the area, the amount owed, minus the work needed= price.
Side note on shorts ~be prepared for a long process especially if you plan on low balling.
Low balling is an over used term similar to “I love you” and you will begin to see it even more loosely used as this thing unravels. Truth is a ‘low ball” is a mathematical process and when used correctly and in the right environment it can land us a deal.

[housingfreefall]

LOL!!!
Value ranges were originally intended to avert low ball offers; it created boundaries ensuring the seller would get a price in or usually above their bottom line. The buyer would have a sense of the seller’s bottom and could more easily guess the price based between two numbers. (it is a modern version of cattle prodding)
This was hatched 2001-02 at the beginning of the boom and has had unquestioned success for the seller. Basically the mentality is I can control how we negotiate.
Negotiation has not died but it has for some time been buried alive the good news is it is making a come back.

Example:
Using 600-650 implies if you plan on bringing anything to the table it better be above 600 and pretty close to 650K.
Hence forth this is a typical deal on a value range property:
Buyer initial offer 610K seller counters 640K seller counters 615K seller counters final meets in the middle 627,500 who just got the deal?

How a house used to be priced was by using comps for the area (as in neighborhood no not Kensington for Normal Heights or Talmadge for College area or Carmel Valley for Mira Mesa) comps in your neighborhood based on sales in the last 30-60 and 90days. The comps give a base line and then the upgrades, yard size, pool, and views are factored in.
The best course of action when dealing with ranges is to get a list of closed deal in the time period indicated above and get in your car and drive. Take the sqft average $ and multiply it by the sqft of the property you are interested in that equals a fair market value.
Take that price and minus 10-15% to establish you initial offer.
Here are some of the things I have heard of late: that is not in range~
Response I am very interested in a counter and you are obligated to present every offer to your client if there is a no to be had let the client be the one to give it. If some one does not deal~it is because they are OVER PRICED

This statement is supported of course by your comps, knowing mathematically what the value of the property is.

ZB

[housingfreefall]

LOL!!!
Value ranges were originally intended to avert low ball offers; it created boundaries ensuring the seller would get a price in or usually above their bottom line. The buyer would have a sense of the seller’s bottom and could more easily guess the price based between two numbers. (it is a modern version of cattle prodding)
This was hatched 2001-02 at the beginning of the boom and has had unquestioned success for the seller. Basically the mentality is I can control how we negotiate.
Negotiation has not died but it has for some time been buried alive the good news is it is making a come back.

Example:
Using 600-650 implies if you plan on bringing anything to the table it better be above 600 and pretty close to 650K.
Hence forth this is a typical deal on a value range property:
Buyer initial offer 610K seller counters 640K seller counters 615K seller counters final meets in the middle 627,500 who just got the deal?

How a house used to be priced was by using comps for the area (as in neighborhood no not Kensington for Normal Heights or Talmadge for College area or Carmel Valley for Mira Mesa) comps in your neighborhood based on sales in the last 30-60 and 90days. The comps give a base line and then the upgrades, yard size, pool, and views are factored in.
The best course of action when dealing with ranges is to get a list of closed deal in the time period indicated above and get in your car and drive. Take the sqft average $ and multiply it by the sqft of the property you are interested in that equals a fair market value.
Take that price and minus 10-15% to establish you initial offer.
Here are some of the things I have heard of late: that is not in range~
Response I am very interested in a counter and you are obligated to present every offer to your client if there is a no to be had let the client be the one to give it. If some one does not deal~it is because they are OVER PRICED

This statement is supported of course by your comps, knowing mathematically what the value of the property is.

ZB

[housingfreefall]

What price point would I buy!
Currently, we are leasing a space across from Balboa Park in Bankers Hill the space is 1671sqft, gorgeous top floor, views to the park, close to everything and a nice bay breeze to keep temperatures perfect. We are in an interesting position because as many on this site we have decided to wait to buy. We took it one step further and in support of our decision we have for the last 24 months paid not only our lease payment of 2700.00, additionally we have made a payment to our savings account; equaling what our mortgage w/ taxes and insurance would be if we purchased this space. This has been an interesting experiment.

1. It has shown how easy it is to save money
2. It has shown how many other things our hard earned money can get us
3. It has proven that in the long run we have saved countless amounts of money and most importantly we have saved ourselves heart ache as the example below will show.

Let me share the results of our little experiment then I will offer the percentage drop necessary for me to enter the market again:

Traditional mortgage on this unit had we bought 24 month ago
Price; 850K
Down payment: 20%= 170K.
Balance due 680K
Payment $3400.00 I/O loan or $4080.00 monthly 6% fixed
Taxes $885.00
Insurance $100.00
HOA $300.00
Total $4685.00 Based on I/O

Lease $2700.00 flat monthly.
24 payments: $1985.00 monthly =$47.640 to savings account
When balance on savings reaches $5000.00 we convert it to a 4.5-5.0% CD
Yields an average of $2143.00 annually

Add all of it up
170K
$47.640.00
$4286.00
Total 221.926.00

Unit next door same location, view, sq footage currently listed $699K (listed is key word) not sold, may or may not move for 640K

Total drop to date 17.5% if we had bought that would equal -$148,750.00

Unit was 509sqft currently: 418sqft (if it sells for 699K). My prediction is 640K: 383sqft. The next round of sales will probably hover at 300-325sqft

I will buy after these three things happen:

1. September lenders will FULLY initiate the new lending standards
2. What is now a short sale and or pre-forclosure will revert back to lenders as REOs in the fall
3. Resets on ARMS will facilitate people literally walking away from their properties. One issue is peoples values have declined, the bigger issue is the new rates for most will be in the 10% range; try that payment on a balance of 500K= 5000th monthly. Sadly many with significant equity fell for this option by taking cash out and reifying in an ARM
5. Lastly, an ARM is not sub-prime in the traditional sense but that is exactly what it is and even the well to do participated some where in the range of 30-50%
4. Many of the properties you currently see on the MLS are falsely being promoted as non distressed properties. The reality is many of these sellers are in some sort of short sale and or pre-foreclosure situation and all including agents and banks are conspiring to make it appear their pricing is correct for the market, even if the market rate has changed. This tactic will not work because, houses, condos commercial properties, are not selling Period.
5. Oct. Nov will be the banks selling season on their REO properties preparing for the 2007 write off of bad loans
Hence 2008 will reset comps for all areas
After all of this happens coupled with the leg work I am currently doing by looking at and visiting every property of interest I will secure a property at 30-35% below today’s market. Over all I predict a 25-35% drop and it will happen quickly and abruptly…….Every one will say they never saw it coming!!!

[housingfreefall]

What price point would I buy!
Currently, we are leasing a space across from Balboa Park in Bankers Hill the space is 1671sqft, gorgeous top floor, views to the park, close to everything and a nice bay breeze to keep temperatures perfect. We are in an interesting position because as many on this site we have decided to wait to buy. We took it one step further and in support of our decision we have for the last 24 months paid not only our lease payment of 2700.00, additionally we have made a payment to our savings account; equaling what our mortgage w/ taxes and insurance would be if we purchased this space. This has been an interesting experiment.

1. It has shown how easy it is to save money
2. It has shown how many other things our hard earned money can get us
3. It has proven that in the long run we have saved countless amounts of money and most importantly we have saved ourselves heart ache as the example below will show.

Let me share the results of our little experiment then I will offer the percentage drop necessary for me to enter the market again:

Traditional mortgage on this unit had we bought 24 month ago
Price; 850K
Down payment: 20%= 170K.
Balance due 680K
Payment $3400.00 I/O loan or $4080.00 monthly 6% fixed
Taxes $885.00
Insurance $100.00
HOA $300.00
Total $4685.00 Based on I/O

Lease $2700.00 flat monthly.
24 payments: $1985.00 monthly =$47.640 to savings account
When balance on savings reaches $5000.00 we convert it to a 4.5-5.0% CD
Yields an average of $2143.00 annually

Add all of it up
170K
$47.640.00
$4286.00
Total 221.926.00

Unit next door same location, view, sq footage currently listed $699K (listed is key word) not sold, may or may not move for 640K

Total drop to date 17.5% if we had bought that would equal -$148,750.00

Unit was 509sqft currently: 418sqft (if it sells for 699K). My prediction is 640K: 383sqft. The next round of sales will probably hover at 300-325sqft

I will buy after these three things happen:

1. September lenders will FULLY initiate the new lending standards
2. What is now a short sale and or pre-forclosure will revert back to lenders as REOs in the fall
3. Resets on ARMS will facilitate people literally walking away from their properties. One issue is peoples values have declined, the bigger issue is the new rates for most will be in the 10% range; try that payment on a balance of 500K= 5000th monthly. Sadly many with significant equity fell for this option by taking cash out and reifying in an ARM
5. Lastly, an ARM is not sub-prime in the traditional sense but that is exactly what it is and even the well to do participated some where in the range of 30-50%
4. Many of the properties you currently see on the MLS are falsely being promoted as non distressed properties. The reality is many of these sellers are in some sort of short sale and or pre-foreclosure situation and all including agents and banks are conspiring to make it appear their pricing is correct for the market, even if the market rate has changed. This tactic will not work because, houses, condos commercial properties, are not selling Period.
5. Oct. Nov will be the banks selling season on their REO properties preparing for the 2007 write off of bad loans
Hence 2008 will reset comps for all areas
After all of this happens coupled with the leg work I am currently doing by looking at and visiting every property of interest I will secure a property at 30-35% below today’s market. Over all I predict a 25-35% drop and it will happen quickly and abruptly…….Every one will say they never saw it coming!!!

[housingfreefall]

I have been a side line reader for some time and finally decided to join the group. If, not merily to be in the company of sane people. Our family realtor called my brother and began a long drawn out dialogue about the condition of real estate. Mind you we are talking top realtor, big office space 6500sqft, top floor office suites, 20 agents, a mortgage company and escrow division this guy is BIG!!!
He told my brother, walk outside, look left, look right and if it is not either one of those houses in foreclosure, then look at your own, becasue 1 in 3 are headed in to foreclosure. He brings up a property Chula Vista in the woods golf course, tells of a guy who bought it for 1.8mil put 500K in upgrades Stunning does not even begin to describe it. Guy gets in some sort of trouble, puts it on the market at 2.2mil nothing………….nothing…..lowered it to 1.8mil letting go of the 500K cash equity…nothing..bank took it over and flipped it back on to the market at 1.2mil, a locust field of buyers rushed in and the ending # was 1.4mil Mind you just a breath away worth this thing was worth 2.2mil..The realtor I mentioned before lived on the same street and was calling my brother to talk him out of using the ticket he bought to the Coronado bridge… This thing is going to unravel in a way that even a shark in the business will feel sorry for the casualties…wait, wait, and if you forget think about the agent he is still alive, but the comps in his area because of the sale of the stunning house~ just took a tank..he had paid 1.4 with a lot less sq footage and half the luxury a mere 8 month ago… The adage is true Remember stupid money always follows smart money.

[housingfreefall]

I have been a side line reader for some time and finally decided to join the group. If, not merily to be in the company of sane people. Our family realtor called my brother and began a long drawn out dialogue about the condition of real estate. Mind you we are talking top realtor, big office space 6500sqft, top floor office suites, 20 agents, a mortgage company and escrow division this guy is BIG!!!
He told my brother, walk outside, look left, look right and if it is not either one of those houses in foreclosure, then look at your own, becasue 1 in 3 are headed in to foreclosure. He brings up a property Chula Vista in the woods golf course, tells of a guy who bought it for 1.8mil put 500K in upgrades Stunning does not even begin to describe it. Guy gets in some sort of trouble, puts it on the market at 2.2mil nothing………….nothing…..lowered it to 1.8mil letting go of the 500K cash equity…nothing..bank took it over and flipped it back on to the market at 1.2mil, a locust field of buyers rushed in and the ending # was 1.4mil Mind you just a breath away worth this thing was worth 2.2mil..The realtor I mentioned before lived on the same street and was calling my brother to talk him out of using the ticket he bought to the Coronado bridge… This thing is going to unravel in a way that even a shark in the business will feel sorry for the casualties…wait, wait, and if you forget think about the agent he is still alive, but the comps in his area because of the sale of the stunning house~ just took a tank..he had paid 1.4 with a lot less sq footage and half the luxury a mere 8 month ago… The adage is true Remember stupid money always follows smart money.

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