Thursday, May 27, 2010

Updates in real estate

I don't think I've mentioned too much on here what's been going on with my real estate clients, so here goes...

Texas and her husband have an accepted offer with the owner of a house in a short sale situation. They have been waiting patiently for five weeks now to hear a response from the bank. The funny thing is that the bank had already previously accepted an offer that would have netted them slightly less than our offer. We honestly thought it would be a no brainer and a quick approval. Three weeks before we put in the offer, they were going to make X and they accepted it. The buyer walked. We come along and put in an offer where they will make X plus Y and they have to think about it. I can't imagine why people think so ill of banks...

Another client of mine, an investor, has an accepted cash offer on a little place. When I originally wrote the contract five weeks ago, I put in a closing date of today. Cash deals usually close in two-three weeks but I threw that far out date in the contract "just in case". I figure it's better to close earlier than your projected date than to assume it will go well and have my client hit with a "per diem" for delaying the closing. Thank goodness I did because the people running her IRA/trust have to be some of the biggest buffoons I've ever had the displeasure of dealing with. Seriously. All they had to do was sign the paperwork that my client and the seller agreed to and sent them three weeks ago and they've managed to drag it out until the last possible second. The funding came in yesterday. As of last night they still hadn't managed to get the signed paperwork to the title company.

The investors from Colorado came into town last week and we went out viewing homes on two of the days they were in town. We found three possibilities and put in an offer on one of them. Hopefully we'll hear something good on that one today. The listing agent was in Australia and had another agent dealing with her business while she was gone. A really low ball offer had come in just prior to ours (within hours) and the other agent immediately had the sellers sign off on it and submitted it to the bank. The listing agent landed on Monday at noon, the exact deadline that we had given the sellers to respond to the offer. She saw what had been submitted and knew that the bank would reject it outright so she called me and asked if we would be willing to wait until today to get a response. So we're waiting.

Another set of clients I'm working with whom I refer to as "The Two Robs" is still waiting for Rob-1 to get his money. When we first met, he was in the process of selling his business to one of his employees. It's taken forever to get it done but it looks like (fingers crossed) it might be wrapping up tomorrow. If that's the case then we can put in an offer on a property that we found a month ago that had gone under contract but that just came back on the market yesterday. Fingers crossed people, fingers crossed!

I have another client coming in from Detroit next week to view some homes. So far he hasn't even decided that he wants to live in Arizona but I think once he gets out here that he might actually like it. I mean the man is coming from Detroit, what's not to love about Arizona? We'll see.

As for our own real estate well, we're getting hit as much as the next guy. When we bought our home in late October of 2008, we thought we were getting a great deal. We were paying $85,000 less than our next door neighbor did when he bought the exact same floor plan a year earlier. The only difference between our homes was that his house had the fireplace and ours didn't. But for $85,000 less, I think I can live without a fireplace that I can't use anyway because our city has "no-burn" days for most of what little winter we have. All in all, we got a great deal, right? Not so fast Sparky, the decline continues. Now our neighbor that's in the closest cul-de-sac is trying to sell the exact same floor plan in a short sale. There are several things that her house has that trumps ours.

1. It's in a cul-de-sac.
2. Because of #1, she automatically has a larger lot than us. About 40% larger.
3. She has the fireplace.
4. She has a pool.

Worst of all, she's asking $75,000 less than we paid eighteen months ago. Aghhh!


Madison said...

Wow, is real estate always that challenging? I am hoping to learn a little about foreclosures, any information on how those work, what the bank will take on the dollar, or where to go to learn more. I've read about 4 books and I'd like to move forward from there but I am still too green to start investing,

Mirth said...

@Madison: I would say that real estate is always "different". No two transactions are the same and I learn something new every time. As for what banks will take on the dollar, your guess is as good as mine. Each bank and each deal is different. Some banks do have "absolute bottom" percentages of, for example, 60% of the amount owed but it's not consistent across the industry. But remember that this is on the amount owed, not the amount they are asking. This is a great time to invest in real estate because the prices and interest rates are so low. Get a good real estate agent to help you find a good deal in the area you are interested in. They should be able to show you data of all the recent sales so you have a better idea of what a good deal looks like in your area. Good luck!