Has it been 10 minutes? You guessed it, the market has changed again. And it’s about to change one more time. This time it’s had a little help from the California State Legislature.
This past Monday, the California Foreclosure Prevention Act went into effect. It has the potential to be a help to some folks, and the potential to be nothing at all. Essentially, it directs lenders to attempt a loan modification workout before foreclosing on the property. Once a notice of default has recorded, if the lender does not have an exemption on file, they must allow an additional 90 days for a loan modification to be worked out. That is 90 days in addition to the existing 90 days that are statutorily provided for to allow the borrower to catch the loan back up. There are only certain situations where this legislation is applicable. Here is the text of the law respecting who is eligible:
2923.52. (a) Notwithstanding paragraph (3) of subdivision (a) of
Section 2924, a mortgagee, trustee, or other person authorized to
take sale shall not give notice of sale until at least 90 days after
the lapse of three months as set forth in paragraph (2) of
subdivision (a) of Section 2924, in order to allow the parties to
pursue a loan modification to prevent foreclosure, if all of the
following conditions exist:
(1) The loan was recorded during the period of January 1, 2003, to
January 1, 2008, inclusive, and is secured by residential real
property.
(2) The loan at issue is the first mortgage or deed of trust that
the property secures.
(3) The borrower occupied the property as the borrower’s principal
residence at the time the loan became delinquent.
(4) The notice of default has been recorded on the property.
(b) This section does not apply to loans serviced by a mortgage
loan servicer if that mortgage loan servicer has obtained a temporary
or final order of exemption pursuant to Section 2923.53 that is
current and valid at the time the notice of sale is given.
(c) This section does not apply to loans made, purchased, or
serviced by:
(1) A California state or local public housing agency or
authority, including state or local housing finance agencies
established under Division 31 (commencing with Section 50000) of the
Health and Safety Code and Chapter 6 (commencing with Section 980) of
Division 4 of the Military and Veterans Code.
(2) Loans that are collateral for securities purchased by an
agency or authority described in paragraph (1).
(d) This section shall become operative 14 days after the issuance
of regulations, which shall include the form of the application for
mortgage loan servicers, by the commissioner pursuant to subdivision
(d) of Section 2923.53.
(e) This section shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
For a loan modification to be approved, something fundamentally has to have changed with the borrowers’ financial situation. That is, a loss of job, divorce, substantial decrease in income, jump in interest rate in an ARM since the loan was originally approved or substantial unavoidable increase in expenses. If a borrower has had no change in income and/or expenses and just decides that the house isn’t worth what they paid for it and they don’t want to pay the mortgage any more, that’s not going to be approved and the lender is going to proceed with a foreclosure. That’s not a good reason to ask for a loan modification. If God forbid a child became catastrophically ill that would be reason for a lender to consider a modification. If the borrower can’t afford the house payment and the payment on the luxury automobile they bought six months ago, the lender is not going to look favorably on that situation. It has to be a real hardship. And the borrower has to be able to document it.
As I’ve mentioned before, Wachovia has a great short sale department set up in Northern California. Unfortunately, a lot of other lenders haven’t come around to their evolved way of thinking yet. Wachovia knows that it costs them less to work out the loans with the borrowers. They will try a loan modification first, if that isn’t going to work for the borrower, they move on to a short sale. Foreclosure is the last possible resort for that company. I always give credit where credit is due, and they deserve credit for doing the right thing and doing it well. They will probably apply for and receive an exemption. Another huge bank we’ve all heard of is doing a terrible job. I wrote a short sale contract for a family back in April. Large Unorganized Bank is the lender on the transaction. They have to approve the short sale. Three days ago I got an email that they had uploaded the package, assigned it to someone and that I would get a response on July 17th. Really. July 17th on a contract written in April. I don’t see that bank getting an exemption.
It remains to be seen how long it will take the different entities within the State government who are supposed to regulate this to get up and running, but for now, if you’re in trouble, you can’t afford to hide in your closet all balled up in fetal position sucking your thumb. There are options available to you. Ignoring the problem will only make it worse. If you don’t get help the process will march forward with out you and one morning you’ll wake up to find the Sheriff at your door, evicting you. That’s not what anyone wants. If you are one of the many who is in this position, send me an email or give me a call. I’m here to help. But most of all, don’t pay someone out of your pocket to save your home. Those guys won’t save your home and you’ll be out whatever you paid them.
If you’ve been coming here for any length of time you’ve heard two things.
Business is cyclical
If you don’t like the real estate market just wait ten minutes
Well, another ten minutes have passed and we have a new market. In my last post I mentioned how the inventory has been drying up. The inventory disappeared just about the same time everyone figured out that it was a great time to buy a house. All those screaming deals that were being bandied about at cocktail parties were a thing of the past. The market was different again. For the last month, nearly every property on the market has received multiple offers. Not just a little multiple, but multiple as in 30 offers. That’s how tight the inventory had become. I went from handling nearly forty properties to managing 22. What that told me was that market was off by half. At the same time, droves of people who had been standing on the sidelines, tried to get into the game. April was a food fight.
In response to Obama’s election, the lenders went ahead and had a self imposed moratorium on foreclosure starts. At the time I thought this was wise. It was the right thing to do. By doing it they kept the government out of that aspect of their business. To me, that’s the way it should be. We do the right thing and keep our autonomy. So for over ninety days there were a lot less new bank owned properties soiling the market. And the market stabilized. The point of the moratorium was to give banks and borrowers time for workouts. Lots of short sales occurred and lots of loan modifications were completed.
Then ten minutes passed. We’ve been hearing that California had 92,000 homes that were already foreclosed upon that were going to hit the market. We’ve also been hearing they were high end. Judging from my last two weeks, I’d say that’s true. I’m no longer seeing roach infested rat traps. I’m seeing the creme de la creme. And it’s going to be a wild ten minutes.
But that’s not the point of today’s missive. While all this was going on, one bank figured it out. One bank went out and set up an entire division in Northern California to help out borrowers. Two years ago, it would be the last guys I expected, except the new ownership is out doing the right thing. I’ve always hated the Pick-a-payment loan from World Savings. I got talked into one for 20 minutes once. I paid a hefty pre-payment penalty to get out of it. Most weren’t that lucky. It was such a bad package that 60 Minutes did a piece on that very loan. Wachovia, who actually paid money to buy World Savings has been sued over the Pick-a-payment loan. There were millions of them. Wachovia has figured out that they needed to do something. And what they did was smart, innovative and correct.
A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (of foreclosure).
(from NOLO.com)
Wachovia figured out that when a property is foreclosed and the bank takes it back, the costs associated with owning and maintaining that property are high. They figured out that the folks who are stuck in these homes need help. And they came up with an innovative way to provide it. Essentially, this is the process. When you contact Wachovia, the first thing they try to do is modify the loan. If the borrower has had a life event such as job loss or catastrophic illness, a loan modification isn’t going to be possible. If it isn’t a workable situation, then they try to save the situation with a short sale. They have an entire division devoted to Loss Mitigation. This division is locally situated and locally managed. I’ve met them, they’re nice people. They will come to your house with your Realtor and meet with you in person and it’s not scary. It’s nice. No drone in another State or country to deal with. Real people. Right here. In your living room. Real solutions. In your living room. Then they stop the foreclosure process and work with your Realtor to assure that your house is sold on a short sale.
Benefits of a short sale over walking away
To me the most important aspect of a short sale to a borrower is that they walk away with their credit somewhat intact and some honor. No sheriff pounding on the door. No coming home to the locks changed. No harassing phone calls. It’s a business transaction and the bank is involved. In the case of Wachovia, the right hand really does know what the left hand is doing. In most cases they can work it out in less than a week and close the short sale in the normal closing parameters. The real drawback is that the lender forgives a portion of the debt and issues you a 1099 for that amount. Currently it is taxed as income but there are rumblings that the Feds may be handling that differently for 2009. There’s no leaving in the middle of the night and no dodging knocks at the front door. The borrower gets their life back. Win/win.
Sometimes the only solution is for the borrower to walk away. Unfortunately, that wrecks credit, so the borrower gets whacked twice. There’s also the possibility of getting a 1099 for the forgiven portion of the debt, although currently it doesn’t seem to be occurring. That could mean a third whacking on a foreclosure. The harassing phone calls don’t stop until the bank actually takes possession of the house. Leaving and not telling the bank doesn’t stop the phone calls. They’re going to offer cash for keys through their real estate agent. Take it, leave with your head held high and start your new life.
Wow! Yeah, wow. If you’re reading this and you’ve found yourself in this position with this loan, please give me a shout. If I can help you, I will, if I can’t, I’ll refer you to someone who can. Isn’t it time you got your exceptional life back?
I’ve said this before, but it bears repeating. The real estate market is like San Francisco weather. If you don’t like the real estate market, just wait 10 minutes. By the time the news media catches up to what’s happening, it’s happened and we’re on to something else. If you saw it on the television, it’s yesterday’s news. That $200,000 screaming deal in Hayward? Gone. I sold several of them, but that deal isn’t there anymore. There’s a conga line out the door of those properties now and the price is being driven up. And they’re in terrible condition. What a lot of people didn’t understand was that $200k “deal” in Hayward was not move in condition. It generally came with a cracked foundation, subterranean termites, mold, missing appliances, a leaky roof and a roach and rat infestation. Furthermore, they aren’t selling for under asking any more. They aren’t even selling for asking. They’re getting bid up. That portion of the market is stabilizing. Last month a home that was very popular, fell out of escrow. It was my broker’s listing, so I knew it fell out before it hit the MLS again. I called a guy who was red hot for that property and said “Look, if you want it we have to write it now”. His response “How can you expect me to make a decision in a day about a transaction this large?” I told him it didn’t matter to me, if he didn’t want to make the decision in a day he didn’t have to, but he wasn’t going to get the house either. He didn’t get the house. He still doesn’t have a house and the neighborhood he was looking in has passed him by. I doubt he’s going to ever get into this market. The opportunities are on a train out of town right now while he stands motionless on the platform.
What I’m seeing is Hayward low end stabilizing. Concord’s low end is stabilizing too. Neither is rising, they’re just stabilizing. Oakland is a giant food fight. If you’re not willing to throw down, you’re just going to get roughed up in that market. In Oakland in particular, I’ve noticed that sellers and agents are pricing properties deliberately low in hopes of creating a frenzy and driving up the price. I think this practice is obnoxious. I’ve seen properties bid up $90k over asking in Oakland in the last three months. Those properties were improperly priced. Things aren’t what they appear to be in Oaktown.
The tide is turning on some of the selling practices too. Three months ago the bank/seller wouldn’t even consider replacing a stolen stove. Now we’re seeing them make the insurance claim and getting the appliance installed. I think the party is over on this one. Thousands of foreclosed owners sold thousands of appliances on craigslist. I think that it’s just a matter of time before the banks say “Enough” and start filing police reports. I have a house that the former owner vandalized on Monday night as they moved out. I’ll be picking up the police report on that one next week. I think some folks are going to be very surprised to have ruined credit and a criminal record. I had a friend ask me about that one a couple of weeks ago. Her husband was going to give parts of the house to his brother-in-law who was doing some remodeling of income property. She was worried and rightly so. I just asked her “do you want to be the person who did that?” She didn’t. I told her I was concerned that the banks were taking steps to end these practices behind the scene and that they were going to start pursuing and catching people in the act. The brother-in-law got his stuff on sale at Yardbirds.
There’s only one way to keep up with what’s actually happening in the market. Hire a realtor who’s working in the market. What you hear on the news and what somebody tells you at a cocktail party is interesting, but it might very well be yesterday’s news.
Turn off the television news. Really. Turn it off. If you’re letting it dictate your personal business decisions, turn it off. Ahhhh. Doesn’t that feel better? Once upon a time, the news was reported over the airwaves. The face of the news looked like this.
Now there was a guy you could trust. I lost faith in the news around 20 years ago. I was involved in a criminal case that was well reported. The guy stole millions, we caught it, but the story was complicated. I realized that the people who were reporting were just trying to get the story out and didn’t really care for the nuances of how it actually occurred. I learned to take all media with a grain of salt.
In September 2005, I got on a plane and flew into Jackson, Mississippi. I got the last hotel room in town, rented a car and the next day drove down to Gulfport, Mississippi. There, the MGM Grand, which previously sat on a barge in Gulf, sat half a mile inland, aground. I met a friend and we went down to Walmart and bought cheap jeans and waders. That night we drove to Baton Rouge and the next morning we were at Lamarr Dixon awaiting our assignment. I can say unequivocally, that the stories reported at the time and the reality on the ground were diametrically opposed to one another. They just don’t take the time to learn the full story when they report it to us.
I take buyers out nearly every day of the week. They tell me that it isn’t a good time to buy or it isn’t a good time to sell or other broad stroke generalizations about the housing market. There is no such thing as a bad time to buy or sell for everyone. There may be a bad or good time for YOU to buy or sell. Your neighbor’s situation might be entirely different. Mathematically, it’s a great time to look at purchasing for folks that couldn’t get into the pricey market before and for investors in particular. I like move ups too. You get less for your current place but you pay less for the next place and taxes are based on the lower number. I like it. Mortgage rates are very pretty right now. It’s a great time, unless you’re in an industry that’s spotty and you’re concerned about losing your job. Then it’s not a great time for you, it’s a scary time for you. Most importantly, don’t let something you saw on the 5 o’clock news dictate how you invest your money, and where you choose to live. Check things out for yourself. There’s a lot going on right now. Talk to those of us who are on the ground doing the work right now. We know what’s going on out there and we’d be pleased to share the information..
Jon Stewart laid out the media’s shortcomings last week. Here’s your moment of zen. Enjoy.
We’ve been in a roaring economy for the last six or seven years. Real estate has been rolling since 1997. Last year the brakes were thrown on and many people were caught flat footed. The line we were fed was “Don’t worry, you can always refinance it out in X years”. Then the rules changed and you couldn’t refinance it out, and people were stuck with a designer mortgage product on their home that they didn’t understand and the person who sold it to them probably didn’t understand either. Mortgage rates went up, the product adjusted and it was game over.
I look at these as a bad business decision. People chose homes that they really couldn’t afford and gambled. And lost. I know there is a certain sector that have lost their homes because of job loss, but that’s not our focus today. My advice has always been and continues to be, if you can afford the mortgage, do it. If not, wait. Simple advice. I don’t like ARM’s never have. I’ve always hated that World Savings Pick a Payment product that buried so many people. Judging with what happened to Wachovia, I think I was right. And I don’t like teaser rates. I’m a fixed rate old school gal. Fixed rate never has prepayment penalties because they aren’t loaded on the back. They’re old school mortgages. They’ve worked for years in this country and they’ll work today.
There’s been a lot of talk about people using their homes as ATM’s. I’ve never been an advocate of that either. The only unsecured debt I believe that should be rolled into a mortgage is home improvement debt. Twice I took out a second on my last project. I used it exclusively on the house and when the work was complete, I refinanced it out into the first. Why? Because the goods and services purchased went back into the home. Buying a car with a home equity line is fraught with peril in my book. Yes, you can write off the interest, but it’s way too tempting to buy more car than you can really afford and that’s when things start to come apart at the seams.
One of the things we see a lot of in the REO business is personal property left behind. I’ve had houses where it required three or four TRUCKLOADS to get the personal property out. We’re talking 30-50 cubic yards of junk. I have to document all that stuff photographically. When I’m taking these pictures I always think, what if these people hadn’t paid all this money for all this junk they didn’t even care about and paid the mortgage? Then I think it’s part of the culture of this country. Buy, buy, buy. It’s the American way. If we spend an hour watching something on television we are tempted for up 22 minutes with different products. After 9/11 President Bush took to the airways and told America to go shopping, go to Disneyland and take a vacation. Apparently we did. Maybe some of us should have stayed home.
I don’t think the attitude in the financial sector of sell sell sell has helped America or Americans. I think that everyone needs to understand the financial products they are getting involved with. Some people are not cut out to own their own homes and they’re better served by renting. That’s good because other people are cut out to own investment property. And other people are cut out to live check to check. And other people are very happy buying their property at a young age and paying the mortgage every single month for 30 years and living happily ever after. That’s what makes this country great. Everyone is different. What makes my life exceptional may not even be on the radar of someone else’s life. What makes your life exceptional may not inspire me to get out of bed. That’s what makes us all so interesting and that’s what makes this country great.
We need to pick mortgage and investment vehicles that make sense for our situation, not Bob up the street or Joe around the corner. We’re all different. Now is a great time to be looking at investment property, if that’s your interest. I love to show investment property that is consistent with each individual’s long term goals. Not Bob’s or Joe’s, or anyone else’s. Just yours. It’s also a great time for first time buyers who have been sitting on the sidelines to get into the game. There are some great properties out there. And there’s some junk. I’ll show you the difference.
I had lunch with a dear friend and business associate last week. He was talking about his own business and he said “My business is completely transparent now. Everything you want to know about my industry is online.” In his corner of the world it is all online. My corner of the world is all online now too. The difference is accuracy.
We’ll take my home for example. Realtor.com estimates my home to be worth between $250,000 and $516,000. That’ narrows it down. Cyberhomes nailed it. They say my home is worth exactly $361,746. I’ve lost $18,513 dollars in value in the last month. Whew. Actually they’re estimating that my neighborhood lost over 5% in value last month. Probably not. Zillow.com estimates my house to be worth $336,000 with a Value Range: $262,080 - $376,320. Eppraisal.com gives me an estimate of $429,122. I like that number better. Redfin.com informs me that I can save over $7500 by buying a property on line. So what good am I?
Well, what those online estimators don’t know is that while I paid $501k for this place, the neighborhood was actually selling in the high 5’s, low 6’s. That’s because I bought the worst house in the neighborhood. Since then, the real worst house in the neighborhood sold about 8 months ago for $325k. It needed $100k in work. The online estimators don’t know that the worst house in the neighborhood had a terribly dirty termite. Two baths needed to be ripped out completely. The original construction in 1955 was substandard on that property and the three properties next to it. I am the fifth house away. The floor plans are the same but a different builder took over the tract in 1958 and the construction on the rest of the subdivision is superior to those four houses. Zillow doesn’t know that. If you saved $7500 buying through Redfin (as they cheerfully tell you when you log on) and spent over $100k on remodeling a substandard home did you really save any money at all? Cyberhomes doesn’t know that the home I bought needed a ton of work, and that the work has been mostly completed. They don’t know that this property now sports a new roof. They don’t know that in June of 2007 when I purchased this property the carpets reeked of pet urine. And they were 30 years old. They don’t know that the linoleum in the kitchen had been slapped over the old linoleum and was peeling up. They don’t know that there were three different colored carpets in all three bedrooms. All from the 1970’s. They don’t know that the old carpet was stripped out, the subfloor sanded and sealed to eliminate the pet odor, the kitchen cabinets refinished, the formica replaced with stone, the slate that replaced the double thick linoleum, the sparkling new master bath. They don’t know about the fresh paint throughout. They don’t know that the termites were eradicated and the damage repaired. They don’t even know that the two trees that pushed up against the foundation were removed in June of 2007. Those trees are still showing up in the aerials on those sites.
The computer models are nice, but at the end of the day, you need a human being on the ground who can tell the difference between a property that looks like a crime scene inside and a property that has been completely remodeled and is sparkling clean, ready to move in. How much money is really saved saved running from train wreck “bank owned” to train wreck “motivated seller” learning about a market vs. hiring a professional who already knows the market and has seen the train wrecks?
Sorry Mr. Walsh, not quite a mansion, but a beautiful executive home. Christmas only comes once and year and it’s here! This home is very well priced at $1,009,900. Very well priced. This home is so well priced that there is room to fully gut it if a buyer were so inclined, but it doesn’t need that. Throughout this home there is beautiful carpet and gorgeous details.
Four bedrooms and three full baths are well laid out over 3060 square feet of living space. There is a formal dining room, living room and a family room, plenty of room for your family to spread out. The privacy the home affords is nearly unmatched in the Bay Area. How about the view from the jacuzzi in the master bath?
Consider the end of a hard day and a nice Cabernet or Chardonnay and that view…and a soak.
This home is has so much potential and is priced so well… it’s so sweet it’ll make your teeth hurt.
Now the bad news. The bank has shut down the pool for safety purposes. The cabinetry needs some either updated, restoring or replacing depending on your taste. The cabinets are structurally in great shape, but the varnish has worn off over the years. When a property is priced like this one, it doesn’t matter, you can afford to make it your own. Comparable listings and sales in this area are well over $100k more than this home.
This incredible opportunity isn’t going to last. Call me today to get a personal tour of this home.
The thing I love about this business is that it’s like baseball. You get a bunch of at bats and it’s up to you to make of them what you will. I played softball for probably 25 years. It was one of my favorite sports, probably because I could throw hard and place the ball. I’ve always said that what makes an athlete great is when they see something that no one else sees. Tony Gwynn saw the ball differently than most other players and he was able to hit it more often. Joe Montana saw the football field differently that other quarterbacks. I think that’s the reason he may be the greatest of all time. He saw things develop before everyone else did. Tom Brady sees the same thing. It’s about vision. I could see the holes on a softball field and I could hit them. This real estate market is about seeing the holes and hitting them.
The market is currently bloated with bank owned properties. Owners who aren’t upside down are grousing about these sales. The truth is, these properties don’t reflect the real market. They reflect what could be expected from the market in a fire sale. They reflect what you could expect if you were forced to sell by a divorce or job loss. Only worse. Bank owned sales, REO transactions do not give typical disclosures, and they don’t have to. Some value is lost there; I would consider it to be between $20-40k. I have people ask me questions all the time about the properties we have for sale. Some I know the answers to and some I don’t. I endeavor to ask the neighbors about the property. I had one guy tell me that the previous owner had some electrical work done. Later a client asked me about the electrical. I could tell him was that I had heard that some electrical had been done but in this particular case, I couldn’t see what they’d done and I told the client that. I then recommend he get an inspection. When a property is in owner possession and that question is asked, the owner has to answer truthfully. Additionally they have to disclose all the conditions they know of at the property. The day my last home was foreclosed on was a very happy day for me. All previous potential liability on that property to me was gone. I believe I disclosed everything about that house, but truth be told, they could have found some little thing that slipped my mind and sued me. With the foreclosure, that ship just sailed. As an agents, we don’t have to crawl under the house to see if there are leaks. We suggest to potential buyers that they get a termite and home inspection. Bank owned properties are definitely buyer beware.
People who are successful in this market are people who see something that no one else sees. If you can walk into a home and see the potential, you’re going to get a good deal, but you also have to not be afraid. You can’t be afraid of termites or vandalism or half remodeled houses. You have to be able to look at it and see what it could be. You have to be able to guestimate the work. This market is not the sort of market where you fall in love with a property. Some get 30 offers, others get one. You have to know your number and stick with it. You have to see what no one else sees about that property and then move decisively.
They say if you don’t like the weather here, just wait 10 minutes. Well, if you don’t like the real estate market here, just wait 10 minutes.
I was talking to an older agent at an open house yesterday. One of the comments she made to me was how the market was such an ever changing beast and at her age it was hard to keep up. Quite honestly, she was probably five years older than I. I felt sad for her because to me, keeping ahead of the market is the best part of the job. I love figuring out where the market is going and having my clients in line with that movement. And the market has changed again.
I’ve had several people call me recently thinking they can get a home for $200k in Hayward in a good neighborhood. You can, if you have a hammer and a paint brush and maybe a license to apply termite solutions. The entire structure, if sound, will need repainting and flooring and probably some other serious work. In other words, that ship has sailed. I have people call me who think they can lowball a bank owned home. Here’s the reality of the situation: Good bank owned properties are receiving in excess of 10 offers each. I’ve been handling a property that I think is a complete dog. It had 11 offers exceeding $50k over asking. I am amazed by that. Brokers ask for highest and best, and then the top offers go to the bank. Some banks do look at them all, but some only look at the top three, top five or some other random number. Agents that write these low ball offers are spinning their wheels and wasting their client’s time.
Right now, this market feels to me like a boxing match. Float like a butterfly, sting like a bee. You had better be ready to move your feet if you’re going to play. It’s important to know the market and move quickly when you see what you want.
The first order of business is to get your preapproval in order. The second order of business is to have your check book with you at all times. The third order of business is to be ready to prove that you have the funds. Then don’t be afraid to pull the trigger if you see something you like. There are great deals out there, it’s time to get into the game.
I was flipping through a local real estate throw away the other day and I saw an ad where the realtor had proclaimed “This is the bottom!” Wow! This is it! Who knew?
No one knows if we’ve “hit” the bottom. The bottom of the market is a lot like the bottom of the sea. It’s rough and ragged and unpredictable.
So while we may have hit the “bottom”, which bottom we hit is another thing. Maybe, as a buyer, it doesn’t matter. Searching for the absolute bottom in this market is really a Quixotic endeavor. What we need to search for is the threshold of diminishing returns. At what point does the investment no longer make sense? I called a client last week and told him to forget about a condo he was considering. It had been bid up over asking to the point that it no longer made sense for him as an investment. In times like this, as a Realtor, that’s a tough call and many of my contemporaries would not make the same call. “Mr. Client, I would love to sell a house, but I would rather be honest with you today, than disappoint you tomorrow.” I made that call, it was the right one for that client last week. It’s important to know what’s right for each individual client. Redfin, Trulia, Zillow and the like are nice tools, but at the end of the day, they aren’t going to tell you that a property doesn’t make sense for your situation. I will.
