[TemekuT]

Well, I can’t comment on the REO’s, but have you considered that perhaps not all those MLS listings need to sell? Perhaps they’re just fishing.

My neighborhood (Morgan Hill) has been the target of posts for brown lawns and to an extent it is true…but mostly with the younger families. I am representative of my street…empty nesters that could pay off our houses tomorrow if necessary…just transfer some funds. (NO, I did not inherit from my parents, they are still alive and 80, and the last time I visited, their WAMU statement with >$1,000,000 was sitting out, but that’s another problem if WAMU goes down, and yes, the most combined money they ever made was < 70 K annually, they just didn't spend money buying crap). We're here because of family (younger generation) that purchased in the IE due to affordability issues and although we hate the values downturn and we feel like losers because we put down substantial amounts or even paid cash, and paid for builder and other upgrades with cash cash, we're planted here for now and will not sell until the upturn, even if that is ten years from now. Why? Because we don't need to, and we like living by our families. We (my street's empty nesters) as a group live below our means, drive older paid-for cars, don't take expensive vacations on credit cards, buy clothes on sale, don't eat out very often, hold significant investment portfolios, and wouldn't dream of spending > $2 for a Starbucks drink. (I personally carry filtered water from my house everywhere I go). I recently went to Promenade Mall, was starving, got in line at both Wetzel’s and Auntie Annies, and walked away from both lines…I couldn’t bring myself to spend $2.69 for a few cents worth of dough. I went to Trader Joes’s, bought a bag of Honey Whole Wheat pretzels, ate some, and took the rest of the large bag home.

Perhaps we’re a statistically insignificant microcosm of Temecula stratification, but we do represent the majority on my street.

When we bought this house the McMillan sales agent I had know since our first meeting in 1997 told me she was shocked by all the younger people buying with 100% financing suicide loans. We must have sounded like old biddies; she and I knew that the chickens would come home to roost and it would be 1992 again here in the IE.

P.S. for temeculaguy and everyone else on that post about Chick’s…one of the first things I did upon hitting Temecula was to dye my hair brown, drinks lots of red wine and coffee, have the implants removed, gain 25 pounds, and buy a Subaru :))

[TemekuT]

Whoops, didn’t notice and/or forgot to post relevant details…I must have been coffee deficient.

1. House #1 was headed to REO land early in 2007. It was listed for 6 plus months at $679,000 and expired in February 2007. Then, off of the MLS, looks like some person bought and flipped to a corporation and then to another individual all on the same day in June. The grant deed sequence is confusing and the details are unclear to me, however, since the last MLS listing price prior to expiring in February was $679,000 and since nothing here is going for anywhere near to $810,000 in the last several months, what gives?

2. Only 5% of purchaser’s money in the deal. Wells Fargo 1st & 2nd amount to 85% of the purchase price.

[TemekuT]

Whoops, didn’t notice and/or forgot to post relevant details…I must have been coffee deficient.

1. House #1 was headed to REO land early in 2007. It was listed for 6 plus months at $679,000 and expired in February 2007. Then, off of the MLS, looks like some person bought and flipped to a corporation and then to another individual all on the same day in June. The grant deed sequence is confusing and the details are unclear to me, however, since the last MLS listing price prior to expiring in February was $679,000 and since nothing here is going for anywhere near to $810,000 in the last several months, what gives?

2. Only 5% of purchaser’s money in the deal. Wells Fargo 1st & 2nd amount to 85% of the purchase price.

[TemekuT]

This one is sad. The van owners are friends and they are very good, giving, compassionate people who are not well educated in financial matters and have unfortunately made poor decisions based on the advice of their “investment group” which is headed by some real estate agents & brokers that profited. I fear they are going to be clobbered and go upside down soon. Had I known what they were doing, I would have directed them to this site, however, the damage had been done by the time I found out.

[TemekuT]

This one is sad. The van owners are friends and they are very good, giving, compassionate people who are not well educated in financial matters and have unfortunately made poor decisions based on the advice of their “investment group” which is headed by some real estate agents & brokers that profited. I fear they are going to be clobbered and go upside down soon. Had I known what they were doing, I would have directed them to this site, however, the damage had been done by the time I found out.

[TemekuT]

SD Realtor – I agree with you and you are correct about the earnest money and default and the cost and hassle factor of a legal battle. The fact is that Escrow companies cannot release a deposit in the event of default unless all parties to the contract sign a release.

What I should have added to my post and made clear because of the facts of Tone’s situation is that taking the step of requesting the irrevocable release is a way of putting the Buyer’s “feet to the fire”. A financially weak buyer would panic and run, which in this market would be a blessing in disguise as Tone wouldn’t waste precious days or weeks waiting for the buyer to perform while the market dropped even more. This irrevocable deposit addendum request is a technique used to get a laggard buyer and agent to perform or get out.

Having said that, we know it is easy to get out of a purchase by suddenly having (engineering) a “financial situation” that would preclude qualifying or prevent proceeding, no matter how close to closing you are, and it is almost impossible to get any amount of damages if the buyer wants to fight it. The same applies for damages for a late closing.

[TemekuT]

SD Realtor – I agree with you and you are correct about the earnest money and default and the cost and hassle factor of a legal battle. The fact is that Escrow companies cannot release a deposit in the event of default unless all parties to the contract sign a release.

What I should have added to my post and made clear because of the facts of Tone’s situation is that taking the step of requesting the irrevocable release is a way of putting the Buyer’s “feet to the fire”. A financially weak buyer would panic and run, which in this market would be a blessing in disguise as Tone wouldn’t waste precious days or weeks waiting for the buyer to perform while the market dropped even more. This irrevocable deposit addendum request is a technique used to get a laggard buyer and agent to perform or get out.

Having said that, we know it is easy to get out of a purchase by suddenly having (engineering) a “financial situation” that would preclude qualifying or prevent proceeding, no matter how close to closing you are, and it is almost impossible to get any amount of damages if the buyer wants to fight it. The same applies for damages for a late closing.

[TemekuT]

bayparkwatcher, as a trustee you are bound by the Uniform Prudent Investor’s Act. For your own education as to your responsibilities, I would suggest you read “Investing and Managing Trusts under the New Prudent Investor Rule” by John Train and Thomas A. Melfe. This book is easily ordered online and I’d suggest you read it ASAP. Then, if you will contact me via this board, I’ll create a temporary e-mail account so you can write me and get the name of the financial advisor I plan to use.

I am in my last class for certification as a professional fiduciary trustee and my eyes have really been opened by the classes I have taken. I will be testing the above mentioned advisor by moving a portion of my own portfolio over.

I don’t want to mention the name of the person as this is not the point of this board and also because I am just starting with the person.

[TemekuT]

bayparkwatcher, as a trustee you are bound by the Uniform Prudent Investor’s Act. For your own education as to your responsibilities, I would suggest you read “Investing and Managing Trusts under the New Prudent Investor Rule” by John Train and Thomas A. Melfe. This book is easily ordered online and I’d suggest you read it ASAP. Then, if you will contact me via this board, I’ll create a temporary e-mail account so you can write me and get the name of the financial advisor I plan to use.

I am in my last class for certification as a professional fiduciary trustee and my eyes have really been opened by the classes I have taken. I will be testing the above mentioned advisor by moving a portion of my own portfolio over.

I don’t want to mention the name of the person as this is not the point of this board and also because I am just starting with the person.

[TemekuT]

To protect yourself, request that the buyers sign an irrevocable deposit release. Even though they are going with 100% financing, there should be some sort of deposit. This will allow Escrow to release the deposit to you should the buyers fail to perform. If you don’t do this, Escrow, as a neutral fiduciary, won’t release the funds to you in case of failure to perform unless stipulated via a judgment or negotiated settlement at arbitration. Then, to protect the buyers, you submit an addendum to the contract that credits the deposit back to the buyers at COE. I have done this several times in the case of 100% financing.

Do this before you sign the lease.

Good Luck

[TemekuT]

To protect yourself, request that the buyers sign an irrevocable deposit release. Even though they are going with 100% financing, there should be some sort of deposit. This will allow Escrow to release the deposit to you should the buyers fail to perform. If you don’t do this, Escrow, as a neutral fiduciary, won’t release the funds to you in case of failure to perform unless stipulated via a judgment or negotiated settlement at arbitration. Then, to protect the buyers, you submit an addendum to the contract that credits the deposit back to the buyers at COE. I have done this several times in the case of 100% financing.

Do this before you sign the lease.

Good Luck

[TemekuT]

23109VC – be very careful about those outlying areas. I was in Hemet yesterday (hadn’t driven there for years) and what a dump it all is once you get out of the new areas. Once you buy in, you’re stuck. There’s a reason why the discounts are so deep in the outlying areas.

[TemekuT]

kev374 – where were comparable houses in Temecula or Murrieta priced at $75,000 in 1997? I bought a new house in Temeku Hills in Fairway Point in 1997, a small 1775 sq. ft. 2 and 2 with a den with a great floor plan and it was $154,900. That was the least expensive new home in Temeku Hills and prices in Fairway Point went to the mid 200’s. I don’t recall Murrieta being below 150K for a new 3 and 2. Maybe old, small homes in Hemet or Wildomar were under 100K. I do recall the 3 and 2.5 townhomes on Margarita (blue trim and red tile roofs) were in the 80’s.

[TemekuT]

So Correct, sdrealtor.

Both myself (broker) and my husband (broker) have watched this play out in our neighborhood. The ubiquitous “Everyman” became a realtor/investor in the last few years, speculated on property here in Temecula, got caught in the flip cycle, and just walked away and let the property go. Your posting is timely because just a few days ago we were counting the brown lawns here and commenting on how many were realtor owned (if you can call 100% financed flips owned!). We have watched two realtors on our street lose houses that they lived in. First we saw the NOD’s, then the leased luxury cars disappeared, then the gardeners ceased gardening, then the NOT’s, and in one case, unwillingness to vacate led to bargaining and $$$ in exchange for possession.

We are now watching the realtor across the street trying to hold up the comps. “I’m not going to give my house away” is his line. He can’t accept the downturn, even though his house has been for sale about 15 months and even though as he chased the market down he Heloc’d twice and is now mortgaged about 30% over the market value of his house.

And next door to us the “realtor/investor” finally got a renter in the place…but…the FY 2006-2007 property taxes have not been paid.

It seems like a lot of the recent licensees out here were operating as “neighborhood specialists” and at the same time, flipping property at not exactly arms’ length transactions within their investment groups.

We don’t understand why the DRE lacks funding and manpower to shut down the obvious scam agents. Our 2 reports of extreme wrongdoing were ignored by the DRE.

Too bad the ethical, conservative, competent agents and brokers are automatically tossed in the same pot with the rest.

[TemekuT]

GN, if it is a townhouse there can be different lots (i.e., parcel numbers) for the common areas vs. the actual townhouse.

Generally, the reason for putting the property in a trust is for estate planning and taxation purposes for someone with ample assets.

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