Is Buying a Bank Owned Property Really a Good Idea?

REO's or Bank Owned Properties are in abundance in Los Angeles and for that matter all over the nation right now, however is it really such a good idea to purchase a bank owned property?

They usually have very attractive price tags but buyer beware once you decide you want to put an offer in on that property the banks are playing hardball in their contracts.

Here are a few of the issues you may run into when purchasing a REO:

1. Buyer receives a lengthy complicated addendum of usually 8-30 pages that are often in contradiction to the offer.


2. Terms are often changed.

    a. Contingency periods are often reduced.
    b. Contingency removal is passive rather than active. Which means once you pass the contingency period timeframe you're 3% deposit could be at risk.
   c. Change of some costs- transfer taxes.
   d. May need to be reviewed by your attorney.
   e. You may end up being responsible for the costs of retrofitting, which traditionally the seller pays for, even if the contract says otherwise.


3. There are Fewer Disclosures Required.

   a. Since the seller, the bank, never lived in the property, there are a number of disclosures not required. In a standard sale and short sale the sellers have to provide the buyers with a lot of disclosures providing details about the past and current condition of the home and any work/renovations they may have done.

  b. This puts more responsibility on the buyer for inspecting. Which you should do regardless, however it's much more reassuring seeing all the details about the condition and or defects that the seller discloses as well.


4. It's usually priced lower making it a good deal which generally attracts multiple offers driving the price up. On top of that you'll most likely be competing with investors who are paying all cash which is hard to compete against if you have to get a loan for the purchase.


5. The listing agent and the bank often are non-responsive. Questions and documents take time and you will need to have patience.


6. For every day past the loan contingency time period agreed upon in the offer or counters they often will charge a per diem, which can get quite expensive.


7. They are usually sold "as is" without repairs or credits being made for problems that are found, and will often not pay for termite repairs or if they do agree it's just a small portion.


The long and the short of it is if you cannot accept the conditions of an REO transaction- RUN, don't walk away from them!


All my best,

Amanda Contreras
Realtor, SFR
Keller Williams Realty
c. 310.694.4819
e. thecontrerasgroup@gmail.com
w. thecontrerasgroup.com
DRE# 01739095

 

Purchasing a Short Sale Property

Here are some basic guidelines on what to expect when you want to purchase a Short Sale.

Once you write your offer you're agent will submit it to the sellers agent, (listing agent). At this point you're dealing with the seller not the bank. You'll be negotiating with the seller until you can come to an agreement in the price and or terms. Once that happens the listing agent will submit your offer to the bank.

Short Sale: A short sale is when the seller owes more on the property than what it's worth.

With your offer the bank will want to see a couple months worth of bank statements and pay check stubs, if you're self employed they'll want to see 2 years of your tax returns.

Be ready to wait, they are called short sales however generally you'll wait a long time, between 3-6 months for the bank to approve it, if they do. The only time this really isn't the case is if there was a approved buyer before you who got tired of waiting and walked away. If there's a lot of interest in the property you'll want to make sure your offer is as clean as possible. Below are a few suggestions:

1. Don't ask for the bank to pay for your closing costs.

2. Offer a reasonable price, one that you'll have a good chance of getting accepted. Have your agent do a CMA, (comparative market analysis), to establish what's a reasonable price. The bank will send out their own agents to perform a BPO, (brokers price opinion), to show them what the value is and an appraiser. They aren't in the dark as to the value themselves. It's wise to submit this along with your offer.

3. Upon acceptance by the seller you'll agree to put a 3% deposit into escrow. They will like to see that you're serious and will appreciate that you're putting some skin in the game.

4. Agree to pay for termite, HOA fees and maybe even some retrofitting. Banks usually won't agree to pay the first 2 items. They'll pay retrofit, however if it's between you and another buyer or buyers offering to pay this could put you over the top.

5. BE PATIENT! The banks are generally understaffed, under trained and swamped. Your agent should give you weekly update as to the status of your offer.


I hope that you found this helpful. If you're looking to buy, sell or invest please give me a call!

All my best,

Amanda Contreras
Keller Williams Realty
c. 310.694.4819
e. thecontrerasgroup@gmail.com
w. thecontrerasgroup.com
DRE# 01739095

Tips for a Successful Sale

 Deciding to sell your home is a big decision with many moving parts. If you hire the right Realtor and put the right price on it you'll have a successful outcome. Below are some tips on what to do after you've made the decision that it's time to move onto greener pastures.

1. Hire a Realtor that has an intimate knowledge of your neighborhood.

2. Be open and honest with your agent at all times. They can't provide you with the best service if they aren't clear about your needs, wants and expectations. The right Realtor will take the time to  explore what you expect from them and the home selling process.

3. Price it right!!!! Statistically the longer your home sits on the market the less money you'll make. The buyers will believe that your home has something wrong with it and pass it up for others. If you remember nothing else on this list remember this one!

4. Make your home accessible to be viewed by the buyers. The easier it is to show the better your chances of selling it.

5. Stage your home. You aren't going to get a second chance at a first impression. Put away the nick nacks and remove excess funiture so your home appears larger than it is. If it's dark buy extra lamps, paint it a nice light neutral color and open the blinds.

6. Property sells year around, not just in the summer time. In the winter you'll have less competition from other sellers and the buyers out looking at that time are probably very serious about buying.

7. If you've had a lot of showings and no offers go back to step #3, if you've had hardly any showings and no offers go back to step #3, if people aren't coming in or calling about it at all, you've totally missed the mark on price go back and re-evaluate your price! Re-adjust it quickly and I'm sure you'll have a SOLD property in no time.

Please let me know how I can assist you with your real estate needs!

Best,

Amanda Contreras
310.694.4819, thecontrerasgroup@gmail.com
thecontrerasgroup.com

Santa Monica Single Family Homes

                             September 2010 -vs- September 2011

• Median Sales Price is down by 1%.
• Median For Sale is up 6%, Median Sold  down 1%.
• Sold Properties down 33%.
• Under contract properties down 50%.
• New properties listed up 11%.
• Expired remains the same.
• Supply is down 15%, Demand is down 33%.
• Days on Market up 17%.
• Months Supply of Inventory up 80%.

For more information on this area or any other Westside neighborhood call me at 310.694.4819.

All my best,
Amanda Contreras
Keller Williams Realty~Santa Monica
Realtor, SFR

Westside Market Information

As you may have already heard real estate is hyper local, prices can vary greatly from neighborhood to neighborhood. Below I've compared 2 years of market data for single family homes for 5 Westside areas.

If your neighborhood is not included in this list please call me and I'll be happy to get you the most up to date information for your area.


Venice

Sept.2009-Sept.2010
Total Sales:160, Average Days on Market:71, Median Sales Price: $897,000.
Sept.2010-Sept.2011
Total Sales:177, Average Days on Market:78, Median Sales Price: $925,000.

West L.A.

Sept.2009-Sept.2010
Total Sales:61, Average Days on Market:40, Median Sales Price: $680,000.
Sept.2010-Sept.2011
Total Sales:73, Average Days on Market:64, Median Sales Price: $630,000.

Culver City

Sept.2009-Sept.2010
Total Sales:145, Average Days on Market:45, Median Sales Price: $650,000.
Sept.2010-Sept.2011
Total Sales:147, Average Days on Market:57, Median Sales Price: $615,000.

Mar Vista/Palms

Sept.2009-Sept.2010
Total Sales:267, Average Days on Market:51, Median Sales Price: $740,000.
Sept.2010-Sept.2011
Total Sales:287, Average Days on Market:49, Median Sales Price: $710,000.

Santa Monica

Sept.2009-Sept.2010
Total Sales:244, Average Days on Market:64, Median Sales Price: $1.4M
Sept.2010-Sept.2011
Total Sales:245, Average Days on Market:70, Median Sales Price: $1.3M

Please don't hesitate to call me with any of your real estate needs!

All my best,
Amanda

5115 Raintree Circle

 Great opportunity to own your own home! This condo is priced like a bank owned property! This is a short sale, featuring 1 bedroom and 1 bathroom, fireplace, central air conditioning and heat, 2 car parking, large balcony overlooking lush landscaping.

 The community has a large heated pool, spa, gym and recreation room. The expansive pond with ducks, waterfalls and fountain makes you feel like you're on vacation. Great central location, minutes away from all that Culver City has to offer! Offered for $190,000.00!

 Follow this link for pictures and contact information to schedule a showing: http://www.realtor.com/realestateandhomes-detail/5115-Raintree-Circle_Culver-City_CA_90230_M16093-93639?source=web

Recent Market Statistics for West Los Angeles and Santa Monica

Here's some compelling figures about our current Westside Real Estate Market. The figures show the MSI, Months Supply of Inventory, and the DOM, days on market.

 The statistica are for Santa Monica, Palms/Mar Vista, West Los Angeles, Culver City, Brentwood, Venice and Marina Del Rey. This is for single family homes only and is comparing current conditions to the conditions from the same time a year ago.

The months supply of inventory is how long it would take for all the homes on the market to be sold/absorbed and the DOM is the number of days on average it takes for a home to sell.

Santa Monica: MSI is 7.8 which is down 9%, DOM is 114.6 up 122%.

Mar Vista/Palms: MSI is 3.3 which is down 14%, DOM is 38.8 up 48%.

West L.A.: MSI is 4.3 which is up 7%, DOM is 45.4 up 2%.

Culver City: MSI is 3.5 which is up 42%, DOM is 40 up 61%. 

Brentwood: MSI is 5.2 which is down 29%, DOM is 55 up 105%.

Venice: MSI is 5.4 which is up 11%, DOM is 82 up 33%.

Marina Del Rey: MSI is 10 which is up 11%, DOM is 42 up 9%.

 So what does this mean to todays buyers and sellers? Well, it all boils down to this: the lower MSI means homes are moving fairly quickly and it's a hot market/neighborhood with lots of buying activity. The buyers see this area as an area where they can get the most bang for their buck. Homes that are priced right, neatly staged and marketed well will most likely end up selling pretty quickly.

 The higher MSI the more the buyers have to choose from so they can be a little more select in regards to what they'll put an offer on which will most likely end up giving them the upper hand during the negotiations with the seller. Homes are lingering on the market and a lot of them aren't selling at all. The seller will be competing with many homes at any given time making him/her have to price very competitively or risk not selling at all.

Please remember this is a broad picture of each area as real estate is hyper local. If you'd like a free report for your neighborhood just give me a call and we'll get that out to you asap!



All my best,

Amanda Contreras
SFR(Short Sales and Foreclosure Resource), Realtor
Keller Williams Realty
c.310.694.4819 e. thecontrerasgroup@gmail.com