If you are thinking about buying an REO or tackling a short sale then this video is for you! 

The video may be a bit  over the top but  it does reflect the frustrations of many buyers who are trying to work with banks on short sales and REO's.    I have a client who submitted an offer on an REO almost 6 weeks ago.  His first offer was over the listed price and  was not accepted.  He  resubmitted a new offer that is  higher then his previous offer.  In the meantime the price has been lowered but the listing agent says that the bank hasn't made a decision about  accepting any offers even though his offer is now 10% above the  current asking price.  Needless to say he is very frustrated.

 At least the listing agent on the above property will communicate with me.  In many instances listing agents will not give out any information and only put a fax number on the listing.  They will not answer questions or speak with other agents about the status of offers.  It is not unusual for a lender to take 60 days before giving a reply on an REO and even longer on a short sale.  Often by the time the lender finally responds the initial buyer has found another property and is no longer interested.


 Last week a home sold as a short sale in the Tree section of Manhattan Beach at a price that was the same as the price on an offer my clients made over 9 months ago.  Had the lender accepted the offer from my clients back in February they would have closed escrow in  40 days and been done by April 2009.  Instead they  horsed around  and ultimately wound up losing an even larger chunk of cash by waiting another 6 months to take the same offer they could have received in the Spring.


And just to make things more interesting on properties with conforming loans backed by Fannie Mae and Freddie Mac some new rules are about to be implemented across the country under the Making Homes Affordable Program.  As of September 23, 2009 over 60 lenders  have signed on to be part of the program.  Basically it means if you can't make the payments or sell your home for more then you owe,  you can't just decide to offer your home as a short sale.  You must talk with the bank about modifying the loan first and if that doesn't work then the bank will make the decision about offering the home as a short sale to the general public not the owner.  We live in interesting times...






****A big thanks to Laurie Manny at Long Beach Real Estate for finding this gem!

Have you ever wondered what happened to the inside of some of the smaller homes that have sold  in the last few years and were not torn down... well here's your chance to find out.  

A little over a year ago I sold a little tree section fixer at 3612 Poinsettia, Manhattan Beach. In prior years this house would have been torn down the day escrow closed as it was only two bedrooms, less then 900 square feet with a single car garage and needed work. In fact it had been sold to a builder who backed out just before closing as he had a lot of inventory that hadn't sold.


3612 Poinsettia was a probate sale. I listed Poinsettia around Thanksgiving in 2007 with a starting price of $929,000 which was actually lower then the value given by the appraiser for the state of California. After a few adjustments the price was reduced to $849,000 in March of 2008. Along the way there were many comments about the price and condition. In May 2008 this little home found its place in the market and after receiving multiple offers (7 of them) entered escrow and closed in mid July 2008 at $849,000 with a small credit to the buyer.



Since escrow closed I have driven by and noticed a number of changes. Last weekend I was able to see what the new owners had done to the inside as well as the outside... what a difference a year makes. This was always a sweet house... but now it is charming. They did a number of things I would have done and others I didn't consider. French doors were added to both bedrooms which really opened up those rooms. The new kitchen is stunning and the living room is warm and inviting.



I thought it would be fun for those of you who followed the story of this listing to see the before and after views of this lovely home. If you are considering buying a small "fixer" you will find some great ideas. The exterior was repainted and flower boxes added. They tore out the old kitchen cabinets, etc and redid everything while staying within the same footprint. They made few structural changes other then widening the doorway into the kitchen and closing off the back door by the garage. They scraped the ceilings and revamped the fireplace. Most of the flooring is the original, sanded and stained a darker color. The kitchen flooring was added and is a perfect match to the existing floor. They tore out the old tub and vanity in the bath and put in a double sink and a claw footed tub/shower. French doors were added to both bedrooms. New moldings around the doors and new doors for the closets finished off the project. The backyard and patio area are their next project.


3612 Poinsettia, Manhattan Beach: Before and After....


Before....



After......




All it takes is a little imagination.....and a bit of help from some friends to make a fixer into something special. In the last two years a number of homes that would have been lost to the bulldozer a few years ago are being bought and updated. I think this is great. Many of these older and smaller homes have good bones but need a little fixin' to show off their charm. For awhile there it seemed as if we were becoming a Stepford community of McMansions. It's nice to see a mix of homes around town... this is what adds character and charm to our City by the Sea. .



The new owners are willing to share information about the folks who helped them transform the house. Email me off line if you would like the information.

I was recently asked to pass along  information about Mesothelioma from the Mesothelioma Cancer Center.   The cancer center, as a public service,   wanted to try and get information to the public about problems that might be found in homes built before 1980 that still have asbestos.   Asbestos becomes a problem only if it is friable... that is crunbling.  If the asbestos product is in good condition then there is no problem.  Hi-Tech Environmental Services  in Manhattan Beach will test any material you think might be asbestos.  They are very inexpensive and quick.  They will also remove asbestos products.   Below is the article from the Center:

                                Homeowners Implementing Green Alternatives to Asbestos in the Home

The state of California provides a great environment for active lifestyles and is regarded as one of the top states to call home. The path to owning a home is an exciting time for everyone, but one that will bring additional responsibilities. Utilized in thousands of construction and building applications throughout the 20^th century, asbestos was a highly regarded mineral due to its heat resistant properties.

Potential Manhattan Beach or South Bay Real Estate home buyers or those remodeling older homes should be aware that homes built before 1980 may still contain asbestos. Due to a steady progression of technology and green sustainable methods, there are many ways to ensure your home or property is asbestos free.

With a variety of home materials on the market still not banned b the federal government, there has been an overwhelming amount of concerned citizens regarding asbestos exposure. California is one of many states implementing sustainable methods of construction. Many new homes that are foreclosed may require renovation or repairs, especially in areas susceptible to natural disasters. This process may require inspection for hazardous materials.

Asbestos exposure is easily prevented by taking simple precautions.  Although un-damaged asbestos does not pose any harm, you should be aware that the inhlation of airborne asbestos fibers can cause mesothelioma, a severe lung ailment associated with asbestos exposure. Mesothelioma treatment has varied affects on individuals, with many factors impacting physician prognosis. These include age of diagnosis, latency period and age of diagnosis.

The amount of asbestos-related incidents in the last few decades has lead to asbestos lawyer firms advocating victim rights around the U.S. The negligence involved with the asbestos scandal has been one of greed and dishonesty. Manufacturers of asbestos were aware of its toxic qualities, but repressed this information from the public.

If any asbestos is suspected, the best advice is to leave it un-disturbed. . Sometimes the best action is no action. A home inspector can determine the proper course of action. Asbestos removal in public facilities, homes and workplaces must be undertaken by a licensed asbestos abatement contractor.  The removal of asbestos is a finite process that must be done by a professional. 

Green alternatives to asbestos include the use of lcynene foam, cotton fiber and cellulose. Cotton fiber is made from recycled batted material and treated to be fireproof. A water based spray polyurethane foam, lcynene features no toxic components.

Recently, congress passed the American Recovery and Reinvestment Act into law. Included in this act were extensions to the tax incentives placed for energy efficiency in 2005, as well as new credits for homeowners who remodel or build using eco-sustainable methods. Existing homes are eligible for a series of efficiency measures that pertain to the home shell (Insulation, Windows, Sealing) worth 30% of the installed cost (materials only, labor is not included in the credit basis).

Manhattan Confidential, our local consumer blog, posted an article today about the decline in sales in Manhattan Beach and the Beach Cities. The post points out two things... the number of sales began to decline in 2002- 2003 ( higher prices mean fewer sales) and 2006 was when buyers started saying no and the market started cooling. Fast forward to 2009 and we have a real estate market that is trying to recover from a lousy economy and a tough lending market. Yet with all the chaos of the last few years prices, with a few exceptions, are still on the high side.M/p>

The issue for many Beach Cities' buyers is that while prices have fallen a lot in Manhattan, Hermosa and Redondo; they don't seem to be down as much as many believe they should be. Every news source is telling potential buyers that California has the largest number of foreclosures in the nation and prices are dropping like crazy. The media posts a new statistic every day on how much real estate prices have dropped in California. There are a glut of articles about buying foreclosures and short sales. So why are prices still so high in the Beach Cities?Last Sunday the LA Times had a terrific front page article that addressed the issue... why some markets are not acting in the way buyers expect. The main thrust of the article is that while prices are down overall, they may not be down as much in the more desirable areas.... i.e. The Beach Cities as say in Riverside. This scenario is very frustrating for buyers and for sellers. Buyers believe that sellers should accept lower prices for homes that have been on the market for long periods of time. Sellers/Banks, on the other hand, want to sell for as much as they can, especially when facing a loss. 

While not everyone thinks this is the time to buy... there are a lot of folks who are willing to take a chance and buy now. Most of these buyers don't think we have reached bottom but believe lower prices along with some very good long term interest rates mean it might make sense to buy. The problem is that there is still a big disconnect between where buyers believe prices should be and the prices that many home owners or in some cases banks are willing to accept. Many of my clients are especially frustrated with the prices that banks are setting for short sales.

While we don't have a huge inventory of REO's... there are a number of short sales in all the Beach Cities. Many of these are new construction that didn't find buyers. A number of builders have received NOD's. Logic would seem to say that as these homes have been on the market for a year or more that Banks would be wise to be fairly aggressive about accepting offers from well qualified buyers...but that isn't what seems to be happening.

We have seen an uptick in sales in the last month. This may be a seasonal reaction... spring is historically our buying season. It could be low interest rates. It could be that buyers are seeing a little light at the end of the tunnel in the economy and the housing market. Personally, I think prices still have a way to go before we see the bottom... but the bottom might not be as low as was predicted a few months ago. The kicker for our market will be foreclosures. If we see a spike in the number of foreclosures over the next 6 months then you can expect to see prices drop quite a bit. If we continue to have relatively few foreclosures prices will continue to be soft but will more likely be flat.

The U.S. Senate in an effort to customize their version of the Bailout Bill and add a few more perks the House missed,  voted to give home buyers a credit of 10% of the sale price or a maximum of $15,000 on a home purchase. Of course the bill is not actually a done deal... It has to go back to The House and then be signed by The President before it takes effect. Right now I'm guessing the bill will be changed along the way and won't be ready for consumers anytime soon... if ever.

Unlike the previous version of a $7500 tax credit that must be paid back..the new bill will not require buyers to reimburse the government..ie taxpayers for the money. I understand the idea behind the bill but once again I think the folks in DC are off the mark.

Would a $15,000 credit stimulate sales in the South Bay-Beach Cities...yes and no. Certainly getting an extra $15K credit looks like a good deal for anyone buying but the problem is that while the credit is nice it's pretty useless if banks are not making loans. And therein lies one of the major problems with many of the ideas about real estate and the homes market floating around Washington.

You can pass stimulus packages 'til the cows come home..but they are pretty useless if consumers can't use them. If the boys in DC are really serious about doing something about the housing crisis then I would suggest that the first step is putting a few conditions on the money they are passing around to lending instutions... namely if you want money from the government you have to make loans on homes.