Live Lake Forest

I am getting a lot of calls lately with people telling me that they want to buy a foreclosure.  Maybe it’s the mentality of the market, or the late night infomercials, but many people seem to think that foreclosures, by definition are a “good deal”.  They might be or they might not!

Foreclosures aren’t necessarily priced right, relative to the market conditions, or even relative to other REOs.  I just checked out 2 new foreclosures in Lake Forest today.  Both are within the same (nice) neighborhood, located only 2 blocks from each other. They are the same builder, age, square footage and floorplan, so a direct comparison is very easy.

The first one has a decently upgraded kitchen, scraped ceilings, remodeled baths, and lightly worn carpet. The atrium area is unfinished dirt, and it looked to me like an above ground spa had been removed from that area.  The garage door is the original wood tilt-up (instead of the more popular roll-up door) and it has a wood shake roof that the builder had installed in 1975.  The windows are all original, and the road noise coming in the house at 3:30 in the afternoon was quite loud. That house is priced at $545,000.  (Update 7/14/2008, new price is $439,900!)
 

The second house, just around the corner has similar kitchen upgrades, scraped ceilings, remodeled baths, professionally installed laminate flooring (it looked pretty good), attractive used-brick walkway and atrium, newer tile roof, and no significant road noise. It is priced at $498,900.  (Update 7/14/2008 – price is now $466,900!)

It’s obvious to me which lender is more serious about getting this sale done!

Please call or email me if you would like valuable information about any home for sale – foreclosed or not.  I’m starting to see some well-priced homes come on the market, and they are selling pretty quickly! 

Lenders need to have a local reputation to protect and live up to!  If you use a distant semi-anonymous internet lender, you will just be a “number” to them, and they may treat you like one!

A seasoned agent told me years ago to make sure I always knew how to find my lender “just in case!”  She was only half joking when she advised me to keep them within “choking distance” and make sure they understood the consequences of failing to take good care of my clients.  I have always considered that to be a good rule regarding the lenders that I recommend to my buyers, but really hadn’t thought about it for the lenders that other agents used for the buyers of my listings. 

I recently had a listing sell to a buyer who insisted on using a lender from outside our area -in New York, even though the property and the buyers are right here in California .  The buyers had a previous successful experience through that lender, and wanted to use him again.  They had a substantial down payment, which was verified with a copy of a recent bank statement that they showed to us. 

The out-of-area lender consistently failed to return phone calls or emails, and I had a nagging feeling that something wasn’t quite right.  We got some vague messages about some kind of bank error that was being corrected, and the loan docs would “probably be coming tomorrow.”  The escrow was scheduled to close in 30 days, but on the 24th day, the out-of-area lender finally admitted that he was unable to do the loan.  The buyers still wanted the house, and finally agreed to work with a local reputable lender, who had to start the process all over again. 

The escrow ended up closing 12 days later than originally agreed to.  The sellers were inconvenienced by the delay after knocking themselves out to complete all the disclosures, escrow documents, and repairs required for closing quickly.  The buyers did not get the lower interest rate that had been promised by the original lender, but they realize now that it may have been fictitious along with the “banking error” that they never knew they had.

Lessons to remember :

• Always try to work with local reputable lenders!
• Local lenders have a reputation to live up to.
• Local lenders need to earn the respect of buyers’ agents and to do a good job in order to stay in business.
• Local lenders want to make a good impression on listing agents, in hopes of possible future business with them.
• If you work with a local lender who lets you down, you can go to their office and choke them!

The foreclosures and short sales in Lake Forest are continuing to pressure the resale real estate market.  Last month, for the first time in over 4 years, a single family house closed at a price under $400,000.  It was a small bank owned home, that had been listed at $414,000 but closed at $395,000.  The previous sale of that house had been $625,000 in September 2006, using 100% financing. 

There are currently 2 homes in the active status that are priced at $399,900 and 1 other that is currently on hold. 

The Lake Forest II Homeowner’s Association is currently conducting their annual Board of Directors election.  In recent years, it has been difficult to get enough members to vote to achieve quorum, so this year they are offering cash drawings for those who send in their secret ballots (not proxies). 

If the minimum of 1135 ballots are received by Sunday, May 18th, those ballots will be placed in a drawing for the $1000 “Early Bird” Grand Prize!  The polls won’t close until June 9th, so all valid ballots received after the 5/18 Early Bird date, will be added to the barrel and go into the next 2 drawings for $500 cash prizes!  This is the best possible return on investment ($0 invested) that I have heard of!  As of today, there have only been about 700 ballots received, so even with the incentive it appears that almost 4 out of 5 homeowners haven’t yet voted.  (I’m running for the Board, so even though I sent in my ballot, I’m not eligible for the drawing.  If you want to read my candidate statement, it’s on this other blog site.)   

I just updated the most active neighborhoods in the Lake Forest II area with the year-to-date real estate sales and listings reports.  If you are thinking about buying or selling in one of those 14 neighborhoods, take a look, or call me to get all the details!

Check your home value, or one that you are considering!  Which one do you think is most accurate?  Are there others worth looking at?

Zillow 

Cyberhomes 

RealEstateABC 

Paper Economy Calculator