South Bay Homes and Real Estate

Pricing for last month’s buyers!

Have you heard of the phrase “chasing the market”? It’s the all-too-common practice of sellers in the South Bay in this declining market where they realize the lost value about 30 days too late. Then, the resultant price reduction is enough to have satisfied last month’s buyers…but not next month’s buyers…and the cycle get s repeated again and again until the seller feels they’ve made huge concessions and the market still yawns!
The antidote for this malady is to have an open and frank conversation about pricing before listing the property. 5 key elements:

1. The market determines the price. Not the owner, not the realtor, not the appraiser…the market. That is, there is a certain amount of $ that a well-informed, qualified buyer will pay for your property in today’s real estate market…
2. Professionally marketed, the home will be seen by 60% of qualified potential buyers within the first 15 days. The initial listing period is extremely important. For a variety of reasons, interest in the property diminishes dramatically after 15 days. 
3. Buyers shop by price range. They search the internet by price range and stipulate a price range to their agents. Agents automatically notify buyers of available homes in their price range. If you overprice your property, by as little as 10%, you will miss as much as 50% of the qualified early viewers. 
4. Property valuation is an art and a science. So, take your love for the home and appreciation for how special it is and couple that with the objective analysis of an appraiser (in declining markets I always pay for an appraisal of my listings upfront) and your Broker’s Price Opinion (BPO). 
5. Price should be calculated to accomplish your goals…speed of sale vs. net.. In a declining market there are just two alternative goals - fast and WRONG. Later in the season is not good, later in the year is not good…later is not good. Your equity is diminishing…whether it’s at 1% per month on the Palos Verdes Peninsula, or 3% per month in Carson. You need to sell quickly or lose. 

I’m writing this from an open house (mls # Z08100276) that I am conducting for a friend. It started on the market 115days ago at $2.45MM and has “chased the market” to $1.89M today. The number of internet site visitors, sign calls, and open house visitors has dramatically declined and the sellers would probably entertain an offer 10% below list price.  I guarantee that, had they offered the home for $1.69MM 115 days ago, they would have had multiple offers and sold it within days.

It’s so easy when it’s not your own money!!!

Mike “Rocky” Rockwood is part of the father/son real estate group, The Rockwood Group. Torrance home buyers and home sellers can reach the Rocky Rockwood Group at 310-809-0203 or Ryanrockwood@kw.com.

Perhaps you are a person who is thinking about acquiring a loan to purchase a Torrance home. You may be considering requesting the loan from a traditional bank, or maybe a smaller mortgage company. However, receiving a loan is not an easy process and can take a significant amount of time. Torrance Lenders want to be sure they are giving their money to someone who is likely to repay the debt.

Read Also: Credit Rating and The FCRA: How They Affect Torrance Real Estate Mortgages

Ideally, a Torrance lender would want to meet and know the borrowers before giving any money to purchase a Torrance home for sale because the potential for inadequate payments and loan defaulting exists. This is why credit reports were created. A credit report is a record of present and past loans, frequency of bill payments, credit card accounts, and unpaid balances.

What is a Credit Rating?

Credit reports factor into your credit rating, which lenders seriously consider when reviewing your application. The reports are distributed by consumer reporting agencies, which are offices that collect the proper facts and make sure the information is available to appropriate parties. These reports are not publicly available, as that would violate federal privacy laws.

To improve your chances of receiving a loan, your credit rating and report should be positive, especially as of late. The reporting agency does not approve or deny you for the loan; they provide the facts and the lender decides. The agencies are essentially the middleman

In a standard credit report, it usually has credit information, public records, and background identification on the consumer. Identification encompasses facts such as work history, name, address, etc. Credit information relates to all credit accounts, paid and unpaid bills, and credit restrictions. Public records are files that anyone has access to, and inquiries are the organizations that have requested viewing your report during the last year.

Read Also: Torrance Home Values Ripple Affect To Renters

How does one start?

To create a Torrance lender-friendly report, keep these pieces in mind, as they show your financial well-being. The sections should work well with each other and paint a picture of a trustworthy potential buyer who deserves a loan. Any discrepancies could lead to a denial of your application

In the identification portion, your work history will be analyzed, and constant job changing will be viewed as a negative. Say with a position for several years before switching to another job. The companies for which you have worked will be examined, along with your standing within these companies.

In relation to credit information, which is the largest factor in the decision process, ensure that you are paying all required bills in full and on time. Unpaid bills are a huge red flag for lenders, including other loans with late payments. If your report shows that you are responsible with your money, you are much more likely to receive a larger amount.

Public records are included to show your standing on tax payments. This is another method of showing responsibility. This will inform the companies of any bankruptcies or other financial problems.

Your home deed (used as collateral) may not be enough in some cases. Certain lenders want to know whether or not you are likely to repay their investment and if you can handle your personal budget. If your credit history and report is sound, a loan is fairly simple to receive. From a young age it is crucial to make smart decisions, as they could greatly affect you down the road.

Read on to learn how any homeowner can negotiate 30% off the principle of their home mortgage.

Hot off the fax is something remarkable and more than a little weird. It’s a letter from Litton Mortgage to one of my clients trying to Short Sell her home to avoid foreclosure on her condo / townhouse in San Pedro, CA.

In case you don’t believe your eyes….yes this a genuine letter. Litton apparently ‘decided’ to write to the San Pedro homeowner in foreclosure - and offer to slash $110,000 off the mortgage principle. Not bad, huh? This after zero negotiation or contact between the homeowner and the bank.

Question:

How were we able to negotiate this amazing reduction?

Answer:

Simple, the homeowner stopped paying her mortgage. There you go, the secret is out!

Meanwhile, my Short Sale Dream Team dukes it out everyday with Litton, Countrywide, Saxon and every other lender under the sun. These negotiations go on for months and many go nowhere. These negotiations are savage, tedious, cold-hearted and brutal.

A real life example:

Saxon mortgage recently held a foreclosure auction of my Redondo Beach condo listing 645 Paseo De La Playa, 301, Redondo Beach, CA (That’s the Cote De Zure complex). The home was sold at auction for about $475,000. The auction was scheduled even though I’d been negotiating with the bank for over 8-months. I even had submitted an offer recently for over $550,000. The buyer loved the home and wanted it badly.. Funny, right? NO, THAT’S NOT FUNNY AT ALL! That’s heartbreaking…and idiotic.

Now back to Litton’s unusual letter:

I’m not one to look a gift horse in the mouth, so let’s give Litton Mortgage its due. This is an awesome offer. But let’s also talk some trash. Litton Mortgage is one of the very worst banks out there. Over and again Litton (and the other big lenders) turn down legitimate offers from our buyers….these banks go on to sell the home for hundreds of thousands of dollars less at auction or as REO (Real Estate Owned). The current system of dealing with over-mortgaged & foreclosed homes is incredibly broken.

Do you have a home that is over-mortgaged?

Are you barely hanging on financially, making huge monthly payments on a home worth less than when you bought it?

If you answered, ‘Yes,’ it’s time for us to have a confidential conversation. I may be able to help you get out rid of your home and get the bank to forgive your debt. There are no out of pocket fees for my services. The bank actually pays me.

Call me now at 310-809-0203 or click on the Contact Me button for more information.

Best regards,

Rocky Rockwood