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Willy @ Project Real Estate

Making Real Estate Happen

Is There A Real Estate Bubble Brewing?

There are a lot of indications that there could be very well another real estate bubble pop on the horizon. As an agent who does Broker Price Opinions (BPO's) for several major lenders, I have had an increase in the number of BPO orders starting from back in September. Every month the number of orders that I get weekly has been increasing. I have also been tracking foreclosure activity. That has been increasing also. It's known that real estate goes in 7 to 10 cycles. Following that information, we are due for a down swing. The thing is in many areas there is a low available inventory of homes for sale and market values keep increasing. I'm also seeing a lot of new residential construction going on. Interest rate are still low also, but lending qualifications are stricter. And as a result not as many people can qualify for a home loan these days. Only time will tell where real estate will go.    

What Does The Future Hold In Real Estate Investing?

     I'm asked this question all the time by investors. I even ask myself it. No one knows for sure what is around the corner. Real estate is a constantly changing environment. Market values can increase and decrease within 30 days. Seasonal changes will also affect real estate.   
     From my experience, real estate goes in 7 to 10 year up and down cycles. Other influences like Presidential elections and local elections can affect real estate. Uninformed voters have voted in taxes thinking that they were doing the right thing or having been mis-lead into thinking that they were voting for something that was going to benefit them. Case in point, the recent increase in sale tax in Los Angeles County. This is something that the "people of Los Angeles" voted for. As a result some cities in LA County now have a sales tax that is over 10%. Other cities are not far off from that. And then you have the politicians in some cities and at the State level who recently approved to add a real estate transfer tax to all real estate transaction. This was done in the name of reducing and providing homes for the homeless and those who are considered "low income" aka "Section 8" recipients. 
     The new real estate tax that will be added to all real estate transactions is surely to affect real estate here in California. And as a result will affect those who invest in real estate. This added tax will also have an affect on market values. I'm not sure which way the values will go except maybe upward as sellers will attempt to cover this new expense that they will have to pay for. I'm sure many sellers will try to shift the costs to buyers. And as a result this may push buyers to request increased assistance with closing costs from sellers. Anyways, when it comes to investors, they will surely increase their asking prices and also look to doing business in other states.    

Open House or Broker Open that is the question.

When listing your home for sale, is the agent going to hold some Open Houses or a Brokers Open?

 

Here are a few things to think about if your Realtor is going to have an Open House.

  • 1. Will your agent be the one holding the Open House? In many real estate offices there are agents who primarily work in getting listings while there are agents who only work with buyers. Those who host Open Houses are usually there to build their buyers database. Many times it is a new agent to either the real estate business or to the area. It's a known fact that very few of those who go to Open Houses actually buy that house.
  • 2. Open Houses opens your home to total strangers. Do you want total strangers walking around throughout your home? Your neighbors may show up wanting to have a look inside your home. They have no interest in buying your home. They just want to see how you live and what type of furniture you have.
  • 3. Safety and security. Open Houses allows potential criminals into your home. While they are touring your home they are also looking at if there is anything worth while to come back for. They'll be checking out to see if you have a dog and or an alarm system. There are also safety concerns for the agent who may be holding the Open House. Many real estate offices have started implementing that 2 or more agent be working together. In the last few years there have been agents who have been robbed, sexually assulted and killed while holding an open house. 

 

A Brokers Open.

  • 1. Brokers Opens use to be primarily for exclusive luxury homes. That has all changed. More and more listings are being shown by a Brokers Open.
  • 2. A Brokers Open is a controled and safer way to get your home seen by area Brokers/Agents. These agents will be able go back to their offices and contact any of their clients who are looking for a home that has the same things that they are looking for in your home. Your home will be seen by pre-qualified buyers who for one thing can afford to purchase your home if they really love it.

 

So, once again, Open House or Brokers Open. I'm all for a Brokers Open and I hope you think so to. 

Should I Invest Or Not?

Things to think about when considering real estate investing In Land:

 

  1. Why Land ?  Land is not going anywhere anytime soon.
  2. What To Look Out For. When looking at land there are a few things to look out for. Like access to the property. Is access via a dirt road or a paved road. If access by a dirt road, is it a maintained road by the County or by other owners in the area. Walk the property and look for any corner markers. Look for anything like a wash that goes through the property that could  make the property only partially usable. Look where the utilities are if there are any. Bringing power in to a property can be quite expensive. All these things can affect price and desirability later on when it comes time to either sell or build on a property.
  3. Do Research On The Property.  Always check with either a title company or with the County on the land use ability. Sometimes the zoning may only allow a specific usage. Title companies can also provide you with an easement map that will show where the utility right of ways are and any other easements that may be on the property like set backs for a road.
  4. A long Term Investment. When you buy a large parcel of land or even a smaller city lot, your investment is typically a long term investment. Land does not sell quickly and usually requires extensive marketing.
  5. When You Want To Buy. Depending on the price and size of the property that you are thinking of buying should determine whether or not you should use a title company and escrow for the transaction. You always want to make sure that the person selling the property has clear title. Meaning that there is no cloud on title.  And what I mean by "cloud on title" is that there are no liens on the property or that the person selling the property is the only person on the title and no one else. I have seen instances where there were several people who had a percentage ownership interest in the property. To become the full owner you would need to get all the other people to acknowledge on the purchase contract that they are giving up their each and own percentage ownership in the sale. The more complicated the deal, the higher the price, the larger the land and any question as to ownership should entice you to use a title company and escrow in your purchase. Now with all that said, it is possible to buy a parcel of land for a couple of thousand dollars or less and have the Seller deed the title over to you and you go down the County clerks office and record the new ownership.
  6. When You Want To Sell. If you didn't do it when you first bought the property, get a file started. Know where the Deed to the property is and have it in that file. Determine an asking price. To help you with that ask a Realtor or look on Zillow for recently sold properties that are like yours. Always use Sold properties as your comparables for determining an asking price. I've seen far too many people going by what other people were listing their properties for only to sell far less than what they were asking for. The price at what market values are are what people will pay for a property similar to yours in your area. If you price too high, you will never get any interest in your property. Be open to Seller Financing. I have sold more properties with Seller Financing than any other way. Your Seller Financing can be short term (3 to 5 years) or long term (10 to 20 years). Use low down payments and low monthly payments and balloon payments. Market your property for sale everywhere you can think of. Craigslist is a good source for buyers. Just know that you don't have to list your property with a Realtor, but offer a commission incentive to a Realtor to bring you a buyer. There are many online sources where you can market your property for free.  

The Underground Real Estate Market

It's been known for some time that there are pocket listings and "off market" listings. In the last couple of years, following the real estate collapse, this "grey" market has really taken off. Especially when it comes to commercial real estate, is now including residential properties.

 

A short fact: Realtors are required to list their listings on the MLS within 3 days. But there is a clause in the listing contract that allows an agent to keep a new listing off the MLS if the Seller chooses so. The key word though is "Seller". An agent can not do it him or herself without the Sellers knowledge. 

 

As Realtors (agents and brokers) get listings, many of those listing do not get sold and expire. This is where the "underworld" can kick in. There are those Realtors who will contact the owners of properties that had their listing expire and try to get them to relist with them.  Savvy agents will either contact a Seller right away and offer to market the owners home for a price or commission amount if they bring the owner a buyer or wait a few days to a few months and then contact an owner and pitch them the offer of bring a buyer but not asking for a listing. The reasoning behind this is that many owners/sellers get frustrated with their prior agents/brokers lack of bringing a buyer or one of several other reasons. This opens up the "hidden market" or "off market" real estate.

 

This then opens the question of, "are there bargains to be found in this Off Market or Hidden Market". The answer is mixed with yes and no. Sellers are not tied any one brokerage and they negotiate the terms and selling price. The other thing is that buyers have time on their side to pick up deals as sellers wait longer and longer when trying to sell their properties themselves.

The Blog Zone

Is There A Real Estate Bubble Brewing?

There are a lot of indications that there could be very well another real estate bubble pop on the horizon. As an agent who does Broker Price Opinions (BPO's) for several major lenders, I have had an increase in the number of BPO orders starting from back in September. Every month the number of orders that I get weekly has been increasing. I have also been tracking foreclosure activity. That has been increasing also. It's known that real estate goes in 7 to 10 cycles. Following that information, we are due for a down swing. The thing is in many areas there is a low available inventory of homes for sale and market values keep increasing. I'm also seeing a lot of new residential construction going on. Interest rate are still low also, but lending qualifications are stricter. And as a result not as many people can qualify for a home loan these days. Only time will tell where real estate will go.    

What Does The Future Hold In Real Estate Investing?

     I'm asked this question all the time by investors. I even ask myself it. No one knows for sure what is around the corner. Real estate is a constantly changing environment. Market values can increase and decrease within 30 days. Seasonal changes will also affect real estate.   
     From my experience, real estate goes in 7 to 10 year up and down cycles. Other influences like Presidential elections and local elections can affect real estate. Uninformed voters have voted in taxes thinking that they were doing the right thing or having been mis-lead into thinking that they were voting for something that was going to benefit them. Case in point, the recent increase in sale tax in Los Angeles County. This is something that the "people of Los Angeles" voted for. As a result some cities in LA County now have a sales tax that is over 10%. Other cities are not far off from that. And then you have the politicians in some cities and at the State level who recently approved to add a real estate transfer tax to all real estate transaction. This was done in the name of reducing and providing homes for the homeless and those who are considered "low income" aka "Section 8" recipients. 
     The new real estate tax that will be added to all real estate transactions is surely to affect real estate here in California. And as a result will affect those who invest in real estate. This added tax will also have an affect on market values. I'm not sure which way the values will go except maybe upward as sellers will attempt to cover this new expense that they will have to pay for. I'm sure many sellers will try to shift the costs to buyers. And as a result this may push buyers to request increased assistance with closing costs from sellers. Anyways, when it comes to investors, they will surely increase their asking prices and also look to doing business in other states.    

Open House or Broker Open that is the question.

When listing your home for sale, is the agent going to hold some Open Houses or a Brokers Open?

 

Here are a few things to think about if your Realtor is going to have an Open House.

  • 1. Will your agent be the one holding the Open House? In many real estate offices there are agents who primarily work in getting listings while there are agents who only work with buyers. Those who host Open Houses are usually there to build their buyers database. Many times it is a new agent to either the real estate business or to the area. It's a known fact that very few of those who go to Open Houses actually buy that house.
  • 2. Open Houses opens your home to total strangers. Do you want total strangers walking around throughout your home? Your neighbors may show up wanting to have a look inside your home. They have no interest in buying your home. They just want to see how you live and what type of furniture you have.
  • 3. Safety and security. Open Houses allows potential criminals into your home. While they are touring your home they are also looking at if there is anything worth while to come back for. They'll be checking out to see if you have a dog and or an alarm system. There are also safety concerns for the agent who may be holding the Open House. Many real estate offices have started implementing that 2 or more agent be working together. In the last few years there have been agents who have been robbed, sexually assulted and killed while holding an open house. 

 

A Brokers Open.

  • 1. Brokers Opens use to be primarily for exclusive luxury homes. That has all changed. More and more listings are being shown by a Brokers Open.
  • 2. A Brokers Open is a controled and safer way to get your home seen by area Brokers/Agents. These agents will be able go back to their offices and contact any of their clients who are looking for a home that has the same things that they are looking for in your home. Your home will be seen by pre-qualified buyers who for one thing can afford to purchase your home if they really love it.

 

So, once again, Open House or Brokers Open. I'm all for a Brokers Open and I hope you think so to. 

Should I Invest Or Not?

Things to think about when considering real estate investing In Land:

 

  1. Why Land ?  Land is not going anywhere anytime soon.
  2. What To Look Out For. When looking at land there are a few things to look out for. Like access to the property. Is access via a dirt road or a paved road. If access by a dirt road, is it a maintained road by the County or by other owners in the area. Walk the property and look for any corner markers. Look for anything like a wash that goes through the property that could  make the property only partially usable. Look where the utilities are if there are any. Bringing power in to a property can be quite expensive. All these things can affect price and desirability later on when it comes time to either sell or build on a property.
  3. Do Research On The Property.  Always check with either a title company or with the County on the land use ability. Sometimes the zoning may only allow a specific usage. Title companies can also provide you with an easement map that will show where the utility right of ways are and any other easements that may be on the property like set backs for a road.
  4. A long Term Investment. When you buy a large parcel of land or even a smaller city lot, your investment is typically a long term investment. Land does not sell quickly and usually requires extensive marketing.
  5. When You Want To Buy. Depending on the price and size of the property that you are thinking of buying should determine whether or not you should use a title company and escrow for the transaction. You always want to make sure that the person selling the property has clear title. Meaning that there is no cloud on title.  And what I mean by "cloud on title" is that there are no liens on the property or that the person selling the property is the only person on the title and no one else. I have seen instances where there were several people who had a percentage ownership interest in the property. To become the full owner you would need to get all the other people to acknowledge on the purchase contract that they are giving up their each and own percentage ownership in the sale. The more complicated the deal, the higher the price, the larger the land and any question as to ownership should entice you to use a title company and escrow in your purchase. Now with all that said, it is possible to buy a parcel of land for a couple of thousand dollars or less and have the Seller deed the title over to you and you go down the County clerks office and record the new ownership.
  6. When You Want To Sell. If you didn't do it when you first bought the property, get a file started. Know where the Deed to the property is and have it in that file. Determine an asking price. To help you with that ask a Realtor or look on Zillow for recently sold properties that are like yours. Always use Sold properties as your comparables for determining an asking price. I've seen far too many people going by what other people were listing their properties for only to sell far less than what they were asking for. The price at what market values are are what people will pay for a property similar to yours in your area. If you price too high, you will never get any interest in your property. Be open to Seller Financing. I have sold more properties with Seller Financing than any other way. Your Seller Financing can be short term (3 to 5 years) or long term (10 to 20 years). Use low down payments and low monthly payments and balloon payments. Market your property for sale everywhere you can think of. Craigslist is a good source for buyers. Just know that you don't have to list your property with a Realtor, but offer a commission incentive to a Realtor to bring you a buyer. There are many online sources where you can market your property for free.  

The Underground Real Estate Market

It's been known for some time that there are pocket listings and "off market" listings. In the last couple of years, following the real estate collapse, this "grey" market has really taken off. Especially when it comes to commercial real estate, is now including residential properties.

 

A short fact: Realtors are required to list their listings on the MLS within 3 days. But there is a clause in the listing contract that allows an agent to keep a new listing off the MLS if the Seller chooses so. The key word though is "Seller". An agent can not do it him or herself without the Sellers knowledge. 

 

As Realtors (agents and brokers) get listings, many of those listing do not get sold and expire. This is where the "underworld" can kick in. There are those Realtors who will contact the owners of properties that had their listing expire and try to get them to relist with them.  Savvy agents will either contact a Seller right away and offer to market the owners home for a price or commission amount if they bring the owner a buyer or wait a few days to a few months and then contact an owner and pitch them the offer of bring a buyer but not asking for a listing. The reasoning behind this is that many owners/sellers get frustrated with their prior agents/brokers lack of bringing a buyer or one of several other reasons. This opens up the "hidden market" or "off market" real estate.

 

This then opens the question of, "are there bargains to be found in this Off Market or Hidden Market". The answer is mixed with yes and no. Sellers are not tied any one brokerage and they negotiate the terms and selling price. The other thing is that buyers have time on their side to pick up deals as sellers wait longer and longer when trying to sell their properties themselves.

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