Forum Replies Created
-
AuthorPosts
-
February 27, 2007 at 10:08 PM in reply to: Question for Realtors on Carmel Valley Price Decline #46452
SD Realtor
ParticipantDon’t forget to factor in commissions and closing costs if your friend was going to sell his home. Estimate 3/4 – 1% for the sellers side closing costs, and 3.5-5.5% commission costs depending on who he uses to list the home.
SD Realtor
ParticipantFair is in the eye of the beholder….
The facts are it started at 700k. It is now at 600-640k. The mortgage recording history is a 220k mortgage in 1990 and another 64k in 2004. I guess you could run a comp analysis to see where it falls in the solds comps.
Personally I wouldn’t touch it unless I could get it to pencil out as a rental regardless of what the comps were.
One could SD Realtor
ParticipantHi gn –
I cannot give you the reasoning behind why the builder structures things in the way they do.
I read the contracts, then ask questions, like what if we do this or what if we do that. Then I sit down and explain it to my clients AWAY FROM THE SALESPERSON. Then we go together and talk to the salesperson. In general the salespeople are not thrilled with my presence. In all cases the answer from the salesperson is we keep the earnest money. Now I “would say” that if there was a tragic situation, or perhaps job loss, or something that you would show them to be an extenuating circumstance that is out of your control, then you most likely could get them to refund you the earnest money.
SD Realtor
ParticipantAs usual I agree with Perry. (btw Perry did you buy a home? I was reading that you bought something off of craigslist so I think I incorrectly interpreted that to be a home)
Littlelady, I am sure you take everything on this board with a grain of salt as do I. The very best things you can do are as follows:
1 – Have your realtor keep you updated with the acitivity in your neighborhood. All the actives, pendings, solds, cancelleds, expireds and withdrawns.
2 – Scope out the competition. Go to visit the competitors when they have an open house or even have your realtor show you thier home by setting up an appt.
3 – Make sure you are priced aggressively.
4 – Solicit feedback from those who visited. It is unlikely this will help much but it cannot hurt. If you change the price then make sure your realtor contacts those who came by.
5 – Above all do not panic. It has only been a week.
— I AM a bitter wannabe buyer AND priced out of the neighborhood I want to be in. Some people like to assert thier opinions in harsher manners then others, what can we do right? Anyways if you stay on top of things and work closely with your realtor your house will indeed sell. While there are ALOT of lookers out there I can tell you there are bonafide buyers out there as well. Why? I have no clue but they are there. I do not personally have any looking in Santee but I have a few, sdrealtor does as well, and it wouldn’t surprise me if other realtors who post here don’t have them.
Am I saying the market isn’t going to go down, of course not. I am saying that if you be proactive and keep doing your diligence to make your home the best deal (be it price, showability, condition, etc) out of the competitors, it will sell.
ParticipantCristalight my wife bought land and built her own home out in Ramona before I met her. She actually enjoyed it very much but she was on site EVERY day even though she had a GC (general contactor). The process was lengthy and it was not easy at all. Dealing with the myriad of codes and regulations was maddening.
However, the home she built was by far superior to any she could have bought resale, or that was built by a developer. She was able to build what she wanted, based on here needs.
If you are thinking of doing this you really really need to find people who have done it before and talk to them. Get thier experiences and ask them what they thought of the general contractor, architect, and other contractors they used and get some referrals. Start interviewing these people to get a read on what it will really take. I think it will be eye-opening for you…
To be quite honest with you I would recommend buying resale home. Try to see if you can get your husband to hold out at least until the middle/end of the summer. Then once that time comes try to delay him another few months. Maybe that will work? There are some VERY nice places in Del Cerro. It is a pretty diverse area. Lostcat probably has it pegged in his earlier description.
Participant– Too many rock front yards
I had to laugh at that one LC… I have an old client that lives up there and darned if your assessment didn’t nail it!
SD Realtor
ParticipantHousingbear, I have dealt with many of the developers. Be very wary. In general, when you put up good faith money to hold a reservation that money is not in jeopardy. However, once you do sign the purchase contract, the contingency period is VERY VERY short. It is in no way comparable to a standard Residential Purchase Agreement issued by the California Association of Realtors that are used for resale homes. I have reviewed 2 purchase agreements for 2 different couples in the past month, from different developers yet they were virtually identical from the contingency removal point of view. What I found were as follows:
Basically, the way the developers work is that once they approve you for a loan, (WHETHER YOU USE THIER LENDER OR NOT!) your contingencies are pretty much 100% removed.
The due diligence period that is inherent in resale homes is pretty much nonexistent. Now since the home is new you should not need to hire inspectors, etc…
Basically the sales offices promise to have your loan approval done within 5-7 days after you sign the contract. So if you sign that contract, be darn sure you want the home.
By not using the preferred lenders you essentially receive NO builders incentives. The builders incentives are substantially reduced from last summer.
If you select the preferred lender, but then down the line change your mind and don’t want to use the lender, you end up paying a 1% penalty to that preferred lender!! Now this I found crazy and needed to follow up more on but did not yet. JUST MAKE SURE YOU ASK!!!
If you pry hard enough most of the sales people will tell you that most of the buyers are signing the purchase contract but floating the loan. Thus they are not locking in and banking on the fact that rates will not rise by the time that they get within 30-45 days of closing.
You can go ahead and work with the preferred lender and obtain an extended lock period however they will ding you for 1/4-3/8 cost that they build into the rate of the loan. They will also give you a 1 time option to grab a lower rate if mortgage rates decline while you are waiting for your escrow to close.
For now that is all I remember, there are a few more things but I cannot urge you strongly enough to SCRUTINIZE that contract. Bring it to an attorney or ask a realtor friend if you can. Don’t let it scare you out of buying the home, just know what you are signing.
Finally the answer to your post is NO. If you sign that contract and get the loan approved, and then try to walk and buy a lower priced home they WILL keep your deposit. Now if the pricing dumps by more then the deposit amount, then you do it anyway right? However I cannot emphasize enough how locked in you are once you sign that contract.
(Note signing the contract is different then reserving a home)
SD Realtor
ParticipantHousingbear you could be correct. However, I think that the developers cope much better then resellers. We have seen that the developers were quite proactive slashing prices on existing stock, cutting back on staff, and severely reducing the number of homes per phase. Similarly developers have already taken writedowns on land purchased and eaten the deposits. In fact I was reading about a large purchase that a developer had given up on about 10 months ago, at the deposit, and is now rebuying that same land.
I guess we’ll see what will happen. I believe there very well may be some consolidation in the case of developers stock prices dropping to book value. I guess we will see.
Overall I believe that the developers margin is way more then any of us would estimate and that they are more apt to survive then many would believe.
SD Realtor
Participantromo –
My advice would be to sell your home and rent a home that is larger and closer to your employer to reduce your communte. What sort of rent could you afford? I believe that the upcoming (current) depreciation cycle is going to hurt certain regions more then others. I feel that the areas such as Temecula, Murietta and Winchester could get hit pretty hard, perhaps as hard or harder then Vista. I also advise that if you are going to buy out there, take a very hard look the raw numbers with regards to how much you would be spending a year on fuel and car repair. Finally and perhaps most important the quality of life. If you have outgrown your home I would guess you have kids so you will need to subtract time with your family and add time sitting on the road.
You do not have to own a home to life a good life with your family. I rent, and really do want to buy, and there are some definite downers about renting, but for your situation I think selling, pocketing the cash, and then renting for awhile closer to San Diego may do you well.
SD Realtor
ParticipantYou make alot of sense Perry… I think that the downturn will take an interesting shape with a wider variance of depreciation then I originally thought. I think condos will get pummelled but I think the detached home depreciation will vary widely with geography due to the type of owner, or shall I say the type of financing the owners used. I am not as sure that a widespread hammer will fall on everything. I think the slow secular downtrend over many years is likely something we agree on. Also yes of course crashes/corrections are quite beneficial for inefficiences. Unfortunately the golden rule is in effect. Those with the gold rule (lenders, banks, etc…) and I think those with the gold are going to stretch things out enough to avoid the hard crash…Good post. As usual your points make alot of sense.
SD Realtor
ParticipantYou make alot of sense Perry… I think that the downturn will take an interesting shape with a wider variance of depreciation then I originally thought. I think condos will get pummelled but I think the detached home depreciation will vary widely with geography due to the type of owner, or shall I say the type of financing the owners used. I am not as sure that a widespread hammer will fall on everything. I think the slow secular downtrend over many years is likely something we agree on. Also yes of course crashes/corrections are quite beneficial for inefficiences. Unfortunately the golden rule is in effect. Those with the gold rule (lenders, banks, etc…) and I think those with the gold are going to stretch things out enough to avoid the hard crash…Good post. As usual your points make alot of sense.
SD Realtor
ParticipantLittle Lady, I think you guys will do fine. I think I saw the listing on the MLS and I think you guys have priced it competitively. Hang in there.
SD Realtor
Participanthousingbear –
If anyone is going to cope with the downturn in an effective manner it will be the developers. We have already seen them cut prices, and reduce the quantity of homes per phase release.
I cannot tell you whether this is a cat bounce or not. I am looking to buy for several reasons and will be buying before the bottom hits. One thing that I notice is that for all the bashing that goes on, the bottom line is that all the indicators are pointing to a secular decline over the next several years, however the true bottom line is that we do not know.
So this particularly non-helpful post will try to just stick to the facts. NODs and defaults are higher then they have been in many many years and will continue to rise. By the same token, the pricing for these distressed properties not only has not affected pricing of resale homes, but even the lender owned homes have not been priced aggressively yet. The overall inventory is NOWHERE NEAR the expectation level of the bears. In fact inventory is significantly lower then where it was last year at this time. Why sales have picked up is also speculative. It could be that sellers are pricing are more aggressively. However I am seeing plenty of 700k and up homes going into escrow. So, however screaming the deals are, homes are not anywhere near what I would call affordable.
As you know secular trends all have cyclical runs in them. In my opinion this is a cyclical run that will continue through the rest of the spring. Hopefully things will slow down in the summer but that is hope on my part and not based on fact. My read is a long secular run that will be flat to down for the next few years. I tend to think that if the collapse that some of the posters foresee, happens, then both renters and homeowners will be in alot more trouble then any of us care to admit.
SD Realtor
ParticipantI got ya Arny…
Yeah I am hoping that will be the case as well. I guess we will see. For sure it is not the case right now. Even the REO’s and short sales themselves are not what I would call price competitive right now. So yeah what we need is that real bump in the quantity of REO’s. Then we need them to sit on the market. Then we need them to start price adjusting and affecting overall sales… Let’s keep our fingers crossed.
SD Realtor
-
AuthorPosts
