Archive for August, 2007

Some Common Mistakes

For most people, a real estate transaction will be among the most financially significant actions they undertake in their entire lives. Given that, it pays to be prudent. Here are two errors I’ve observed in the past year.

Using an Out-of-Area agent to list your home for sale. In one case, a couple used one of their best friends who was an agent in Hollywood to list their Santa Monica condo for sale. The agent did not understand the nuances of location in the Santa Monica market. As a result, the condo sat on the market for months while the market declined and the Sellers finally accepted a much lower sales price than they would have had to accept had their property been priced accurately to begin with.

There is no substitute for on-the-ground experience in pricing and marketing a property. When you hire an agent, make sure that he or she has that on-the-ground experience where your property is located.

Using a Part-Time Agent. In the instance above, the agent was a part-time agent in addition to being from out of the area. As a result, the agent could not respond to buyers and other agents as quickly as he/she could have. Real estate contracts contain a clause that says “time is of the essence” and while this is always true, it’s even more so in a volatile and challenging such as we are experiencing right now.

Using the Agent Representing the Seller of the Home You Want to Buy. I’ve seen parties who are buying a property use that property’s listing agent to list their current home for sale in the hopes that will get them a better deal on the purchase of their home.

The duty of the listing agent is to obtain the best price and terms for the Seller of that property. For the listing agent to induce that Seller to accept terms from a favored client of the agent would be a breach of ethics. Beyond that, from a practical standpoint, the listing agent has a longer pre-existing relationship with the Seller. Either way you figure, counting on the listing agent to get you a better deal because you let him or her sell your own property in exchange is a bad proposition.

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August 28, 2007 at 4:47 pm Leave a comment

Foreclosures, Santa Monica and more broadly

There was a good article in the Los Angeles Times yesterday about foreclosures in the current market. [Please cut-and-paste links into your browser window if clicking on them does not work.]
http://www.latimes.com/news/printedition/la-fi-vacant12aug12,1,7541496.story

Digging past the headlines and into the data shows that the pictures is troubling in the periphery around Los Angeles, lower cost areas where Buyers made purchases with sub-prime loans and/or with little in the way of down payment. Palmdale/Lancaster, San Bernadino, and Riverside are the foreclosure hot spots.

The article also provided a nifty link where you can check on foreclosure activity by zip code: www.latimes.com/news/printedition/la-foreclosures-db,1,7647466.formprofile
I checked out Santa Monica for April-June 2007 and the number of foreclosures were as follows:

90401: 0

90402 (north of Montana) : 0

90403 (north of Wilshire) : 3

90404: 0

90405: 2

A total of five foreclosures for one quarter. More than we’ve had in the past several years in all likelihood buy hardly equivalent to the 40-100 or more foreclosures happening in the more distressed areas and not consistent with some of the doom-and-gloom headlines.

Certainly there will be more foreclosures while it takes time for the lending crisis to burn itself out. But Santa Monica in particular and the Westside in general are going to continue to experience a much more stable picture than other parts of the Southern California region. One of the many selling points about Santa Monica has been that properties here appreciate more in an “up” market, decline less in a “down” market and I see no reason for this pattern to change.

August 13, 2007 at 8:57 am 3 comments

Market Conditions, August 2007

I’ll preface this post by saying that one should be wary when one hears a report on the real estate market. Why? Because there is no such thing as the market. Every market is defined by geography, price range, and type of property. The market for low-end re-sale condos in Santa Monica will very likely bear little resemblance to the market for new construction single-family homes in Santa Clarita. Yet the newspapers, TV & radio, and many other sources give commentary on “the market” as if it were one unified, undifferentiated whole.

That said, I just finished up dating my website (www.santamonicahomes.net) on sales in Santa Monica for the first half of the year. A few quick comparisons between the first half of 2007 and the last half of 2006:

First, contrary to popular notions of declining sales, the total number of sales is roughly the same for both single-family homes and condos. Second, while there are some individual sales that are lower than the preceding lows, and while the top sales prices for condos has retreated a bit, the average sale price for both single-family homes and condos continues to edge up.

If the Santa Monica market is not the runaway Sellers market that it was two years ago, then neither does it mean jubilation for Buyers looking for bargains.

With this description of the general market picture in Santa Monica, then it should not come as a shock to learn that I’m currently representing a Buyer who is in multiple offers competing more than $60,000 over asking price with four other offers. I think my client is going to get the property, we’re just waiting for the signed acceptance on Monday.

The moral of this market report, both the general and the specific, is that a good property, well-priced and well-advertised, will still attract Buyers and will still sell quickly.

August 4, 2007 at 3:49 pm Leave a comment


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