Timely Real Estate News ……………………………………………….15 September 2008
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Here we go again…..USC Trojan niece, UCLA Bruin Auntie
Where does ‘Auntie’ start? USC, ranked #1, again, stomps Ohio State, and my alma mater, UCLA is, well, embarrassed beyond belief. I’m not use to intra-family rivalries, but when Morgan, my sister’s beautiful and talented daughter opted for USC last year, I was thrilled she was coming down to Southern California from Vancouver, BC. And it’s been a blessing. Morgan, who is pre-med, is delighted to be back in her dorm with three great room mates, and college life is still very much in front of her. Oh, sometimes, I do long for those college days of mine, but attending UCLA Extension classes always keeps me ‘close to home.’ Hopefully my Bruins will have a better rest of the season then last Saturday proved to be!
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Foreclosures — it’s not all talk.
In the media, there is a lot of talk about the increasing number of foreclosures in the city, state and country. Fortunately, on the Westside, there aren’t that many. There is another side to the foreclosure story that the media is not talking about — and that is the short sale.
What is a short sale? According to Wikkipedia….”A short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor.” For example:
* A house is listed for $1 million; the loan is for $1.3 million; and the property is worth $900,000. What does one do? As the seller, there is a $400,000 spread between the current value ($900,000) and what is owed ($1.3 million).
* Buyer offers $900,000 — seller accepts that subject to approval of the bank.
* The bank, then, has to approve the sale of the property for an agreed-upon price, say $900,000. The bank, for example, can forgive all or a portion of the unpaid balance, $400,000. Many times there is a second trust deed involved as well.
* The percentage of “write off” by the holder of both liens is greatly determined by a number of things, but in general, the holder of the second does not fair as well as the holder of the first trust deed as they are the that is really “calling the shots”.
* There is no set standard as to what the banks will do for this type of transaction — and it will depend on the seller’s financial condition; bank’s portfolio and financial position; the philosophy of the bank (some are more aggressive than others these days); what the comparables are for the area — is there a chance the bank would do better by foreclosing on the property and selling it themselves, and/or does the seller have some cash to assist in making up some of the difference?
To get more information for you, I recently interviewed Holly Hanks, the Office Manager and Escrow Officer for West Coast Escrow, which is located in my Coldwell Banker office in Brentwood Court.
* According to Holly, she has handled 10 short sale transactions this year; has three currently and there were three this year that did not close escrow for a variety of reasons. Last year she had one short sale transaction in her office.
* While all of the properties are located in the City of Los Angeles, none of them have been in West Los Angeles. She stated that these short sales offer many financial benefits to both buyer and seller, “…but it can be a long process, from 30 to 90 days or longer. Everyone has to be patient in this process.”
* These can be complicated transactions that can possibly have a number of negative consequences for the seller including tax consequences, and credit. Only about 15% of our (Coldwell Banker Greater Los Angeles’s Company) short sale transactions actually close escrow, that is how difficult they are to get through. It is also advised when you enter one of these transactions, particularly as the seller that you refer to professional counsel of either your accountant or attorney or both.
One of the key points Holly made was that it is important that the seller and the seller’s agent have all of the negotiations worked out with the lender even before they put the property on the market. “That makes for a much smoother transaction,” Holly stated. “Having a good agent who understands all of these short sale issues is critical.”
It is not generally possible to have all of the terms agreed to before putting the property on the market, as the lender usually waits for a agreed upon price between a buyer and seller before they will agree to do a short sale, let alone the price that has been agreed to between the buyer and seller. All the more reason to work with an experienced agent who knows how to assist and guide you through “these rocky waters”. But remember, one needs to be long on patience and understanding to get through this process.
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Becoming an EcoBroker
In a further commitment to understand how we can help ourselves and our fragile planet, I have enrolled in a unique program — EcoBroker Certification program. My goal is to offer professional expertise and knowledge to help all my clients have healthier, more comfortable and more cost-effective home ownership opportunities. Within the real estate industry, we are seeing more and more programs and products designed to help our environment. I look forward to keeping you all abreast of this comprehensive eco-friendly program.
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More Green tips for the kitchen
1. Hot stuff
Not ready to eat just yet? Instead of having the stove top going to keep it warm, wrap the pot up in a towel – this will help insulate it for quite a while.
2. Splurge on pots and pans
Resist buying cheap pots and pans – they’ll cost you more in the long run. A good sturdy, thick walled set will last you a lifetime and while they take a little longer to heat up, the heat distribution is better and they’ll also store heat for longer. Glass and ceramic pots and pans are said to be the most efficient.
3. The right pan for the job
If you can see the heating element or the gas flame is licking a little on the side of the pot or pan, it’s too small and much of the heat is being wasted.
4. Keep the door closed
How’s your oven door glass looking? It’s worth spending the time to keep it clean so you can see in rather than opening the door to check on the food.
5. Drop the pilot
Older gas ovens may have a pilot light that burns 24/7. While it’s a small flame, over the period of a day, it uses a lot of gas. Consider switching it off (properly with the help of the gas company).
6. Water, water everywhere
Only use as much water as you need in a pot. Every extra drop requires more energy to heat and will increase the cooking time.
Observing some or all of the points above won’t single handedly save the environment, but when millions of us take these small steps in conserving energy, it certainly adds up!
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Hot Off The Press!!
I have a great new listing in Bel Air Crest. It is a 6 bedroom, 7.5 bath custom home with 5 fireplaces, including 3 in the master suite, library/office, family room, big rooms with wonderful high ceilings, pool, spa, and closets a dept store would envy. Price $5,295,000.