Live Lake Forest

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There are so many ways to not sell your Lake Forest home in this market, that there is no excuse to make the most common ones!  If you’re going to fail at selling your house, please come up with something more original than these :

Don’t clean it up- just leave the beds un-made, dishes in the sink, dirty screens and muddy windows, laundry piled on the floor, old newspapers and general clutter on every horizontal surface, etc.

Make it difficult to show- don’t use a lock-box, demand that it be shown by appointment-only, then require that the buyer’s agent call 5 different phone numbers to try to reach you for that appointment.  Make it even more difficult by requiring an exact time (+ or – 5 minutes) for it to be shown, (and never before 11:00 am or after 4:00 pm on a weekday!)  If anyone ever does come to see it, make sure you follow them around the house and point out all the “special features” such as new toilet seats, low-flow shower heads, and gold colored doorknobs that you have installed in the last 9 years.

Stink it up- cook garlic, fish, curry and broccoli on a regular basis, and keep the windows closed!  Maybe add to it with a few dirty ashtrays, cigars, and some pet odors mixed in!  Don’t forget to use some over-powering room fresheners or candles to bring out the allergies of many buyers.

Price it just a little above the record set in 2005 by your neighbor’s house which wasn’t nearly as nice!  (An interested buyer can always make an offer!)  

Don’t bother to check what your agent has put in the MLS!  In addition to leaving out critical details about your property, such as correct number of bedrooms, lot size, neighborhood, school district, HOA dues, and tax rate, make sure your agent leaves out any photos that wouldn’t qualify for Athol Kay’s award for Bad MLS Photo of the Day! 

I just checked the MLS – this one sold in 3 days (I knew it was hot)!  (updated 2/28/08)

This one just came on today and I don’t expect it to last very long.  I don’t have a specific buyer of my own* for it, so I’m sharing it here. 

 

This is another REO (foreclosure, or bank-owned property) that I think the previous owner used as an ATM machine.  It was last refinanced for a total of $650,000 in November 2005.  Today, it is listed for  $529,863.  (I don’t understand the “863″ part, but that’s what they are asking.) 

As you can see, it has a 3 car garage, and it seems to be in a decent location near one of the community pools.   It has 3 bedrooms and over 1900 square feet.  Total HOA dues are approximately $97/month.  I think it is better looking than the photo – the overcast sky makes it look all washed out.    Contact me soon if you think it might work for you!   

*When I have a buyer that fits one of my “hot buys,” I call them first before posting to the world.  If you want me to call you first, call or email me and we’ll talk about what you want and where!

Like most of Orange County, Lake Forest has a lot of homes for sale right now.  “Distressed” properties currently make up 44% of the total 357 properties available, with 116 short sales and 40 foreclosures.  Due to the long wait times for lender approval of short sales, most of these are being ignored by the buyers, and many of the foreclosures aren’t realistically priced until after the banks have let them sit on the market for over 60 days.  With 62 homes now under contract, if the distressed properties are taken off the list of availables, the remaining properties represent a little less than a 5 months supply, which puts us closer to a more “balanced” market.

The good news is that there are real buyers around, and they are purchasing the homes that are priced and presented well. Of the 111 properties that have come on the market since the first of the year, 12 have already sold and closed escrow.  There are 2 homes that I personally saw come on the market in the last month, that were clean, staged, available to show, and priced competitively, and they both sold with multiple offers in the first few days!

Single family home prices now start at $409,900 for a 3 bedroom, 2 bath bank-owned home.  There are 33 now listed at $500,000 or less.  The highest priced home is on the lake front, priced at $1,595,000.  Condo prices now start at $164,900  $153,640 (as of 2/24/08) for a 1 bedroom foreclosed property.  There are 13 available today at less than $200,000.

For details about any neighborhood in Lake Forest, please call me or send me an email.   If you would like to search for homes without having to register, click here.

An auction of about 200 foreclosed homes in Orange County was held yesterday in Anaheim.  I had meant to attend and observe, but other business came up, so I missed it.  The Orange County Register had an article about it this morning that gives a pretty good overview and shows some photos of the event.

One of the homes on the auction list was one that I had been watching in Lake Forest for the last 5 months, since it was listed by the REO agent last September at a price of $742,500.   It was a good floor plan in a very nice neighborhood, and had a good location within the tract, so I made it a point to go check it out immediately.  

My estimate is that it needed somewhere between $50K and $75K to replace all the flooring, paint it inside and out, replace appliances, windows, lighting and plumbing fixtures, and re-landscape the yard to bring it up to par with the neighborhood.  At that time, I felt that it should have been listed under $700K, and that would probably have brought in a sale price of around $650K.  After fixing it up, that would put a new owner in a very nice house that would be worth about $750K – $775K.   (The market has deteriorated since then, so I now feel that after fixing it up, the value today would likely be in the range of $675K – $700K.)

The price was lowered several times since September – to $650K, then to $639K, then finally to $619K.  A few days later they changed the wording in the MLS to say “now scheduled to be in auction.”  I spoke with the listing agent at that time and he told me that he had received 3 offers on the house when the list price got down to $619K, but because of the contract with the auction company, they could not accept any of them.

I was out showing homes to some buyers that I just started working with yesterday, and decided to show them this foreclosure to give them an idea of what one looks like.  While we were in the house, the winning bidder from the auction came over to take another look at his prize.  He told me that his winning bid was $593K, which included the 5% premium that the auction company collects, so the lender’s gross sale price was effectively $564,000.   If he doesn’t find a lot of hidden problems with the house, I think he got a pretty good value if he intends to live in the property.   (If he’s planning to fix it and flip it, it doesn’t have enough upside potential to justify spending the money and time and taking the risk in this market.)

This appears to be a happy ending with the buyers getting a house that they can fix up to their own taste, and the neighbors should be happy that it will no longer look un-loved and abandoned, but the lender appears to be the big loser here.  By over-pricing in the beginning, and then committing  to the auction format, I believe they lost at least an additional $50,000 beyond the losses associated with the bad mortgage.  It will be interesting to see how many other lenders turn to auctions to unload their REOs!