The Housing Bubble

The Recordnet reports from California. “Home-sales auctions have popped in the Central Valley since last summer, but the latest twist is an online auction for new homes with a bidding process similar to that used by eBay. In its first California online auction, the company will be auctioning off 61 new homes in four Central Valley cities - Lathrop; Gridley, north of Sacramento in Butte County; and Madera and Kerman, both near Fresno.”

“Some residents there aren’t happy about the impending auction. Richard Provencio lives at the north end of a lane that has 14 of the 18 houses to be auctioned off - the remaining four are model homes a block south.”

“‘I feel very robbed,’ he said. ‘These are the same houses I paid $620,000 for, and now they could be selling for $300,000 to $400,000.”‘

“The decline in the foreclosure-riddled neighborhood - and the value of the homes there - has been tough to watch, he said. ‘Bad timing,’ Provencio said. ‘It’s just the luck of the draw.’”

“Recently, he counted 15 houses for sale down the long street from his house, and many sit empty because of foreclosure. ‘Our ghost town,’ he said. ‘It’s just sad, man.’”

“Many of the homes in the development were bought initially by investors, he said. His neighbors — at least until this week, when the landlord lost the house to foreclosure — were renters, he said. Provencio said he had to mow their front yard because the renters wouldn’t.”

“Another development resident, Matt Mettler, wasn’t happy, either. ‘It (stinks) that we paid top dollar, and somebody’s going to get it for half price,’ Mettler said.”

“He bought his house for $472,000 in January 2006 — a house originally listed at $585,000 with $80,000 in upgrades thrown in. He believed then that he had a steal — the model of the month.”

“He found out later that a neighbor down the street bought his same-style house eight months later for nearly $100,000 less. All in all, it’s bad timing, Mettler said. ‘I could have saved $100,000, but what’s done is done,’ he said.”

“Minimum selling prices for the two-, three- and four-bedroom houses will start at $195,000, which is about 40 percent below the previous asking prices of up to $413,900.”

“Harp and Pindy Johal, sisters whose family rents in Tracy, this week toured the four model homes representing 18 homes to be auctioned off next month for San Ramon-based Pacific Mountain Partners.”

“They say they likely will be bidding. ‘I think this is cool,’ said Harp, 19. ‘It’s not like you lose anything for trying. What the heck?’”

The Press Enterprise. “The San Bernardino County district attorney’s office has taken five people into custody and is seeking two more who are suspected of running a bait-and-switch ring using lies and forgery to sell mortgages at predatory interest rates throughout California.”

” District Attorney Michael Ramos said the scheme was marketed over the telephone by callers who said they represented a company called Lifetime Financial. He said victims were told they could refinance their homes and cash out funds at fixed interest rates.”

“Instead they got mortgages with high interest rates they could not afford, Ramos said, and most of the money obtained from refinancing went to the brokers in the form of fees.”

“He said in most cases the terms of the mortgages were set without the borrowers’ permission. That was done, he said by falsifying loan documents, forging borrowers’ signatures, using notary services illegally and padding home values above their market value by using phony appraisals, Ramos said.”

“Tracylyn Sharrit of San Bernardino, said when she went to sign the loan documents at the company’s Studio City office she found the terms had been changed. She said she refused to sign the documents and demanded that they be rewritten. But she said when she called to find out when the new paperwork would be ready, she was told the loan was already in escrow.”

“Sharrit said she and her husband, Ronald, struggled to make the monthly payments on the new mortgage, which she said increased from about $1070 to more than $1800. ‘For the first time in my life I am late on my mortgage,’ Sharrit said.”

The LA Times. “State and local prosecutors said Tuesday that they had shut down a mortgage fraud ring that allegedly victimized thousands of seniors and others, some of whom lost their homes.”

“The six companies were operated by Eric Michael Pony, 25, of Tarzana and family members, the lawsuit said.”

“In a coordinated action, San Bernardino DA Michael A. Ramos announced that Pony, a former real estate salesman, was expected to turn himself in to authorities Tuesday. Pony gave up his state license in September after an investigation by regulators. If convicted, Pony could face 24 years in prison, Ramos said.”

“California Atty. Gen. Jerry Brown’s statement described the plight of 75-year-old Luis Garcia. Garcia agreed to a 50-year loan with $1,000-a-month payments but instead was hit with a monthly bill of $2,254.”

“Garcia later found that Lifetime Financial had falsified his income and work history. He couldn’t afford the payments and lost his house.”

“The criminal and civil actions against the Pony family members and associates and their companies are believed to be the most ambitious by law enforcement since California’s once-booming housing industry was hit last year by a crippling downturn. Brown said it was only the first of several legal actions planned to fight mortgage fraud.”

The Associated Press. “In the coming weeks, Brown said he intends to bring additional legal actions, both civil and criminal, against other unscrupulous mortgage lenders and foreclosure consultants.”

“Notary Eli Hassine, 25, is accused of falsifying signatures and even misspelling names in the process.”

“As part of the seizure of the mortgage group’s assets, prosecutors froze multiple bank accounts, seized 16 properties in Los Angeles, Las Vegas and San Antonio worth more than $6 million, and claimed at least 10 luxury cars, including four Mercedes Benzes, two Ferraris and a Bentley.”

The Voice of San Diego. “Most of the homes in Pacific Beach and Mission Beach aren’t actually on the beach. And so the beaches are a tale of multiple markets. Where overzealous homebuyers bid up homes on busy streets a dozen blocks from the beach a couple of years ago, it’s difficult to sell for anywhere near what they paid.”

“What causes a foreclosure east of Interstate 5 causes one here, too. The foreclosure activity is more ‘on the condo side,’ said area real estate agent Rustin Rulenz. ‘Basically it’s all kind of the same thing as anywhere else, people who bought 100 percent financing.’”

“For area real estate pros, the boom market meant sometimes selling houses within three hours of putting them on the market, other times collecting more than a dozen offers on a property before letting it go to the highest bidder.”

“‘People had this anxiety,’ said Karen Dodge, a veteran real estate agent in PB. ‘I gotta get a piece of Pacific Beach! I gotta get a piece of Pacific Beach! They were just buying anything.’”

“Sellers of homes in bad spots — on busy streets, far from the beach — fall into trouble in the uncertain market. One such home in PB was listed in 2005 for more than $1 million and sold for $829,421 in June of that year. Last August, the owners listed it for $699,000, and it didn’t sell. They took it off the market in the last month, the Dodges said.”

The Union Tribune. “February was the 35th consecutive month of year-over-year increases for both home foreclosures and notices of default (in San Diego County). There were 1,316 residential foreclosures countywide…a rise of nearly 244 percent over February 2007, DataQuick reported yesterday.”

“‘We are watching a very long train wreck in process,’ said John Hokkanen, a San Diego real estate agent. ‘Every indication is that it will continue for some time. I’m not sure the measures the government has put into place will be able to slow it down.’”

“‘There is an incredible amount of uncertainty all the way up the food chain,’ about the housing slump, said DataQuick researcher John Karevoll. ‘The Fed, the Treasury, everybody is more or less at a loss as to what is happening. It could that the worst is behind us. It could be that it is not.’”

“Real estate agent Jan Wright said one result of the rise in foreclosures is that lenders have improved underwriting to guard against future loan failures. ‘All of this subprime stuff is what allowed the marketplace to get where it did,’ Wright said. ‘We are going to heal up and start doing transactions the way they should be done: true documentations, down payments, the real deal.’”

“As prices fall, many prospective buyers are delaying purchases, said Rich Martinez, a Carlsbad resident who invests in foreclosed properties. DataQuick last week reported that the overall median price for San Diego County homes in February was $415,000, a drop of nearly 20 percent from the housing boom peak of $517,500 in of November 2005.”

“‘The mentality for buyers right now is, ‘I’ll just wait for six months because prices will be less,’ Martinez said.”

The Mercury News. “After spending five years and $17 million, developers who dreamed of building 25,000 homes in San Jose’s pristine Coyote Valley have abruptly abandoned their controversial venture.”

“The group of developers walked away Tuesday, opting to no longer fund the planning process, and leaving the fate of Silicon Valley’s largest chunk of undeveloped land again in limbo.”

“Just days ago, developers were poised to dump an additional $2.5 million into the proposal. Then reality sank in. The troubled economy, dismal housing market and costly planning delays have created too much uncertainty.”

“‘The realities of the current situation just don’t warrant continuing funding,’ said Adam Alberti spokesman for the developers coalition.”

“Mayor Chuck Reed said they made the right decision to back off. Reed has repeatedly sounded alarms about the city’s financial straits and insisted homes that would demand services be added only after businesses that would produce sales taxes.”

“‘We need to get the jobs before we get the housing,’ Reed said.”

The Bakersfield Californian. “The Sacramento-based developer behind a half-built Wasco neighborhood and several other troubled projects in Kern has defaulted on a $35 million construction loan, documents recorded Tuesday show.”

“The money was borrowed against a site near the intersection of Central Avenue and 7th Street, south of Highway 46. No development has taken place there, though Wasco officials have OK’d construction of 246 homes.”

“Liens and lawsuits from unpaid building companies have piled up at various sites, including the partially finished Hidden Grove community in Wasco. A half-dozen or so families there now live on the only finished street in the subdivision after construction was halted in late 2007.”

“Amber Graham, her daughter, and husband live on Quaking Aspen Avenue in the Hidden Grove project of Reynen & Bardis Communities Inc., a Sacramento-based developer. The Grahams say they don’t mind the fact the neighborhood isn’t finished. ‘It’s quiet.’”

The Denver Post reports from Colorado. “More than 300 people gathered in a conference room at Invesco Field on Tuesday evening in the metro area’s largest foreclosure forum to date. The metro area recorded 26,500 foreclosures last year, said Denver Mayor John Hickenlooper, who described his own struggles to keep his home in 1976. ‘This is not an individual failure,’ Hickenlooper said. ‘We are seeing a systemic failure.’”

“Sharon Foxworthy was among those seeking help after payments on her family’s mortgages adjusted this month from about $2,400 to more than $3,000. The family met its March mortgage payment by skipping other bills, but needs to refinance quickly to avoid foreclosure.”

“‘We are gasping for air,’ Foxworthy said. ‘Why can’t I connect with someone who can give me real answers?’”

“Colorado ranked fifth in the nation for foreclosures in February with a total of 6,737, according to RealtyTrac. That was a 27 percent bump from February 2007. Many of those homes could end up at an auction.”

“Foreclosed homes sold at auction present a risk to potential buyers because homeowners who have defaulted on their mortgages may take a physical toll on their houses before being evicted. During that time ‘they could have been ripping out piping and plumbing,’ says Michael Clarkson, a broker associate in Westminster.”

“Auction shoppers should consider the housing trends for the area in question. ‘You can save 20 percent (on the house price), but if the market is going down, you’re catching falling daggers,’ Clarkson says.”

“Mark Marati, the employing broker for Lone Tree-based Benchmark Realty, says he suspects auction inventory isn’t as high as one might think. ‘The banks don’t want to give property away. . . . The auction is the last resort,’ he says.”

The Vail Daily from Colorado. “Jeff Brode thinks he knows how to kick-start a project: Give away a $400,000 duplex in Gypsum.”

“Brode’s company is the new sales broker for the Aspen Ridge project, and wants to get the spring construction off to a solid start. The giveaway is the biggest splash Brode knows how to make.”

“Of course, there are some strings attached. The biggest is that the home will be won only by someone who’s already signed a purchase contract, qualified for a mortgage and put down a nonrefundable $10,000 deposit on one of the 20 available duplexes by April 15. The winner will be drawn from that group of committed buyers.”

“Brode’s company is also a partner in a deal to buy the remaining unbuilt lots at Buckhorn — almost 600 lots — so generating buzz at Aspen Ridge will provide a lot of momentum for those plans, too.”

“Brode has a history of creative financing. He put together construction-loan/mortgage packages for the first homes built at the Chatfield Corners subdivision in Gypsum.”

“As the nation’s subprime mortgage market has imploded, packages like the ones that built so many homes at Chatfield just aren’t available anymore. People who qualify still can get a loan for 95 percent of a home’s price, but even 5 percent down on a $400,000 home is $20,000.”

“It wasn’t always this way. ‘We couldn’t keep homes in stock when we started Buckhorn Valley,’ said Sam Garton Gale, one of the partners in the Buckhorn Valley development. ‘We’d sell the homes as fast as we could put them up.’”

“But while the current real estate market is slow, don’t expect to find any bargains, at least not at any of the units Brode’s company is selling. ‘Price drops hurt everyone,’ he said. ‘To live here, you’ve got to work harder, and you’re going to pay more.’”

The Arizona Republic. “More than 400 people filled the room hoping to land a deal on a Dobson Bay Club condominium Sunday, but only a handful walked away from an auction with a bargain.”

“Fourteen condominiums at the complex on Baseline Road near Alma School Road were sold absolute, meaning the seller was obligated to sell regardless of the highest bid.”

“Joel Kaplan of Scottsdale, took the first unit, paying $137,500 for a 1,661-square-foot, three-bedroom unit that retails for $249,900. Kaplan, a broker and investor, said he’s purchased 30 properties in the past year.”

“Russland Capital Group bought the 166-unit apartment complex two years ago for $19.5 million and converted them into luxury condominiums. Originally, 24 condominiums were to go on the auction block, but only 14 were sold absolute.”

“Todd Good, president of Accelerated Marketing Group, which organized the auction, said the owner will sell the remaining 10 at the average auction price in the next few days, then they go back to the original price.”

“Stephanie and Willie Prest, of Payson, also scored a condominium for $120,500 and hope to lease it. Dennis Logan of Mesa took a two-bedroom, two-bath condo for $120,500. Retail price: $219,000.”

“A first-time homebuyer, Logan was all smiles about his new 1,196-square-foot home, calling the auction, ‘a great opportunity.’”

The Arizona Daily Star. “Most professionals that home buyers work with are regulated by the state, including real estate agents, appraisers and home inspectors. But loan officers are a lingering exception.”

“Members of the state’s mortgage-lending industry say it’s about time to change that. A bill in the state Legislature would require ‘loan originators’ — loan officers who deal with the public and generally work on commission — to be licensed.”

“The state currently requires mortgage-lending businesses to have licenses but doesn’t require licenses of the employees who interact with customers.”

“If loan officers were required to be tested, ‘I’m sure by the hundreds many of them would fail because they had no training,’ said Mike Jones, a branch manager for Tucson Mortgage Co.”

“‘It’s important that Arizona protect its citizens from all those people who can’t get work in other states,’ said Felecia Rotellini, superintendent of the state Department of Financial Institutions. ‘There are no industry or consumer groups who oppose it. None. Everyone thinks it’s a good idea.’”

“A lack of a licensing requirement makes it easy for criminals to do business as loan officers here, said Richard Hagar, a Washington real estate appraiser who helps law enforcement with mortgage-fraud cases.”

“‘That’s what I see is crooks that were in other states — when they get disciplined, those people leave and move to Arizona,’ Hagar said.”

The Review Journal from Nevada. “The numbers continued to worsen for the Las Vegas housing market in February as sales of new homes plunged nearly 40 percent to 867 and their median price dropped 11.8 percent to $283,315, SalesTraq reported Tuesday.”

“Existing-home escrow closings fell 59.7 percent from a year ago to 901 and the median price is down 13.2 percent to $250,000.”

“Again, the number of foreclosures during the month exceeded the total for both new- and existing-home sales, SalesTraq President Larry Murphy noted. The 1,870 repossessed homes represent a 353 percent increase from 413 in the same month a year ago.”

“‘We’re still sliding along on the bottom here,’ Murphy said.”

“Foreclosures account for about 40 percent of existing-home sales in Las Vegas and many are being sold at 35 percent to 50 percent below peak values of 2004, Smith said.”

“‘Ouch,’ he said. ‘It’s depressing and makes many (homeowners) very angry to hear, but that’s the way it is.’”

“Las Vegas has about 13,000 preforeclosure filings. Smith doesn’t think the ‘foreclosure spigot’ can be turned off quickly even with government assistance.”

“Murphy found it interesting that Trump condominium-hotel had its ‘virgin’ closing in February, Palms Place had 20 to 30 closings and Allure had 30 to 40. He expects to see more closings of high-rise units in March, perhaps 300 to 400 in addition to single-family new-home sales.”

“His concern is that the flurry of closings in the early months won’t be sustained as fewer buyers are able to close escrow on condos that are selling for $1,000 per square foot, for example, at Trump.”

“‘I’ve got a funny feeling in my gut that these guys are swallowing canal water here,’ Murphy said. ‘I’m going to give it six months after Trump has his first closing, by August. I’ll bet by August that not more than 50 percent of those units have closed.’”

The Toledo Blade reports from Ohio. “For the past four months, the Sylvania Township residents Paul and Nannette Dillon have been separated by 135 miles and a sluggish real estate market where unsold houses continue to pile up. She and the children live on Jamesford Drive in the family’s $240,000 house. Her husband, a corporate executive in supply chain management, lives in a rented room near his new job in Akron.”

“‘It’s awful for a family to have to be separated because of the housing market,’ complained Nannette, an upbeat mother of four young children who has made a full-time occupation of helping her real estate agent try to sell the family’s immaculate Tudor-style residence.”

“And the Dillons’ predicament is not unique. The region’s weak economy and glut of unsold homes have conspired to create a situation where the lives of many families have become a tale of two cities.”

“‘A lot of people are doing what the Dillons are doing - living in two residences,’ said Gail Zeisloft, a consultant with (a) Toledo human resources consulting firm. ‘There are quite a few people who are in that boat or about to face it.’”

“She passed the phone to an administrative assistant, whose husband is settling into a new job in North Carolina while his wife stays in Springfield Township awaiting the sale of their $215,000 house purchased just a year ago.”

“‘It’s nerve wracking,’ confessed Tina Carmichael. ‘He’s under a lot of stress with his new job. When you’re with someone everyday, you feel you have someone on whom you can unburden that stress load. Even though we talk and e-mail everyday, it’s not the same.’”

“Part of the problem, said Christopher Bloezel, a consultant with Runzheimer International in Rochester, Wis., is that fewer firms are buying houses from transferred employees because of difficulty re-selling them. Firms that continue the practice are often being forced to hold the homes for up to seven months while paying for upkeep and improvement costs that can approach $10,000 a month, he said.”

“In the two months their home has been for sale, they’ve had 10 lookers and one offer. ‘It was ridiculous - like $50,000 less than we were asking,’ Ms. Carmichael said.”

The Columbus Dispatch from Ohio. “Sale prices of central Ohio homes are the lowest in four years, averaging $152,790, according to the Columbus Board of Realtors. And January sales in central Ohio — 1,225 — were the fewest in that month in five years, even though more houses were on the market (16,402) than in any other January on record.”

“Especially vexing for the industry is the prolonged nature of the slump. Key housing indicators — number of homes sold, average price obtained and number of days a home is listed — began slipping in central Ohio about two years ago.”

“‘There’s a big selection, as opposed to a few years ago, when people were bidding on fewer houses,’ said Cindy Windsor, former president of the Columbus Mortgage Bankers Association.”

“In those days, bidding wars often erupted. Not so now, said Gary Parsons, president-elect of the Columbus Board of Realtors.”

“At builder Sovereign Homes, sales were off by 35 percent to 40 percent last year, VP Ron Casteel said. Fellow builder Duffy Homes has seen business tail off, as have all other builders.”

“‘One of the things we’re doing in some of our communities, we’ve rolled back the prices to what the community started at,’ said Rich Danko, VP of sales and marketing at Duffy. For instance, the company is offering $40,000 off completed homes in its Meadows at Harvest Wind development in Westerville.”

The Daily Tribune from Michigan. “Now might be the best time in nearly three decades to buy a new or used home or condominium in Oakland County.”

“‘It’s a great time to buy based upon the declining market and the number of foreclosures,’ said Steven Mansour, senior loan officer at the Chase Bank branch in Royal Oak. ‘Within the last two year the values dropped so it makes sense for first-time home buyers to buy in Oakland County.’”

“There’s no doubt home values have dropped sharply, Realtor Peter Schump of Prudential Cranbrook Realtors in Franklin said. ‘Some of the homes in Oakland County have been on the market for nine or 10 months,’ he said.”

“Schump said some homes that have been unsold for two or three years are being auctioned. In some cases, there’s no minimum bid required for sale. ‘There was a home on Haverhill in the city of Bloomfield (Hills), near Cranbrook, that was auctioned in December for roughly $1.8 million that was listed for $2.3 million,’ said Schump.”

“‘I guess the motivation by the owner was just to get rid of it,’ he added.”

“Other auctions have involved foreclosures, which hit a record of 7,643 in Oakland County last year, up more than tenfold from 715 in 1998.”

“In Oakland County, new and used home and condominium sales have fallen 60.9 percent since 1999, when the peak hit 33,516 sales, according to statistics.”

“In January alone in Oakland County, sales fell to 813 from 1,117 in January 2007, a 27 percent decline. Wayne County has seen home sales decline 36.5 percent since 2004, while Macomb County sales have fallen 51.8 percent, records show.”

“At the end of January, there were 18,673 residential and condominium listings on the market in Oakland County, said Fran Green, marketing manager of Realcomp. ‘There’s a glut on the market,’ Green said.”

“The median sales price for a residential property at the end of January was $145,000, down 19.8 percent from the median price of $180,750 in January 2007, she said.”

“Rebecca said her husband was transferred to a job in Fraser at an automotive supplier and has to drive 96 miles to and from work each day. The brick home, with a walkout finished lower level, has a living room, recreation room, five bedrooms, three full bathrooms, a dining room/kitchen area, first-floor laundry room and two-car garage. The couple is asking $187,000.”

“‘I am optimistic,; Rebecca said. ‘I’m hoping once the weather gets nicer a lot of people will get out and look at houses. We’re also using the same Realtor we used when we bought our home in August 2006.’”

“But, so far, the young couple with a 4-month-old daughter haven’t had any luck. ‘We love our house, and we’re not opposed to staying in it for a while if we have to. We didn’t know my husband would get another job in the next county over,’ she said.”

The News Review from Michigan. “At first glance, the paperwork proliferating on an Emmet County Building bulletin board might seem mundane. But it hints at a trying process that growing numbers of Northern Michigan homeowners have been facing: foreclosure.”

“A decade ago, the foreclosure sales announced in legal notices like these tended to be a once-a-month occurrence — perhaps even less frequent — in many counties across the region. But lately, several officials who process foreclosures after homeowners default on their loans say it hasn’t been unusual for a handful of properties to go up for bids each week.”

“‘This is the worst I’ve ever seen,’ said Charlevoix County register of deeds Charlene Novotny. ‘When I started working here 30 years ago, there was maybe one a year.’”

“‘There’s probably fault on both sides,’ Charlevoix County undersheriff Don Schneider said. ‘People are going over their heads in debt, and those mortgage companies have been too free to give them money.’”

“When examining yearly foreclosure sale tallies for seven Northern Michigan counties — Antrim, Charlevoix, Cheboygan, Crawford, Emmet, Montmorency and Otsego — all but one showed increases greater than 60 percent between 2005 and 2007. Among these counties, Emmet’s 2007 total showed the sharpest increase — 230 percent — from the tally two years earlier.”

“In Emmet County, Sheriff Pete Wallin said recent foreclosures have involved ‘mostly mortgages that have been taken out in the last three to four years.’”

“In Charlevoix County, undersheriff Schneider said recent foreclosures in Charlevoix County have affected homes with values ranging from less than $100,000 up to $1 million. ‘It pretty much is right across the scale,’ he said.”

The Herald News from Illinois. “With national fears of a recession and the growing foreclosure rate, real estate professionals assured potential buyers of the housing market’s vitality during a home-buying seminar Saturday at The Herald News.”

“‘It truly is a good time to buy,’ said Jim Karges, president of Karges Realty. ‘There are many houses for sale right now. The supply is great. The buyers have all the control.’”

“Chris Kauzlaric, of Channahon, is considering buying his first home and came to the seminar looking for ‘a holistic perspective.’ ‘I’m pretty infantile in my stages of understanding the market,’ he said. ‘It’s nice to have an expert in each one of the sectors.’”

“While geared toward first-time buyers, the seminar also addressed concerns of current homeowners. For buyers with a home to sell, Karges said mortgage rates should dictate whether it’s a good time to buy.”

“‘It’s a wash,’ he said. ‘You’re buying for less and selling for less so look at interest rates.’”

The Chicago Tribune from Illinois. “Home inventories are upand appreciation ain’t what it used to be. That has sellers worried as real estate shifts further into a buyer’s market.”

“‘Buyers are in the driver’s seat now and they know it,’ said Jim Merrion, regional director for ReMax. ‘They are driving hard bargains and getting what they want. They are asking for contracts contingent on selling their old houses. A few years ago, sellers wouldn’t take these, but they do now. Buyers are not shy about asking for all kinds of throw-ins. I’ve seen them ask for — and get — patio sets, outdoor grills, new appliances, furnaces, home warranties.’”

“When Jim Weinberg and his wife, Julie, bought their Glenview house in October, they got the seller to throw in a plasma TV and surround-sound stereo. But best of all, said Weinberg, they got the home at a rock-bottom price. Their week-long negotiation that brought a $160,000 price reduction.”

“‘When the market recovers, the house will appreciate,’ Weinberg added.”

“‘Buyers are relaxed and patient because they know they have the edge,’ said Jeff Kropp, broker in Chicago. ‘If their needs aren’t met, they walk.’”

“Their needs, he agrees, go way beyond price.”

“‘Getting through inspections are the most difficult part of negotiations now,’ said Charlie Vernon, real estate broker in Evanston. ‘The buyer needs to realize that the seller has lived with these problems and hasn’t seen the need to fix them. And the seller needs to realize that fewer buyers are willing to remodel kitchens or spend weekends painting. … So, in the end, the inspection points all come down to dollars.’”

“Thanks to larger inventories of homes for sale, buyers have more choices, said Rick Hauser, Realtor in Hawthorn Woods — and that includes the homes in foreclosure.”

“‘Used to be, just rehabbers wanted these bank-owned houses,’ said Kropp. ‘But now buyers are looking at these diamonds in the rough, which are even lower-priced than other properties. Often, all they need is cosmetic changes or new appliances.’”

“‘As a seller, you have to give a little or even a lot,’ said Vernon. As a seller’s agent, Vernon said he talks to the the seller on price, based on what he believes the house will sell for.”

“‘Never mind what your neighbor sold his house for a few years ago,’ said Vernon. ‘You have to look at very recent comps. And the buyer doesn’t care if you are highly mortgaged because you took out a home-equity loan to take a vacation. The buyer doesn’t owe you that.’”

“Vernon said some sellers still aren’t willing to budge from prices they believe their houses are worth. ‘Then, the house is theirs to keep, and that’s their right,’ said Vernon.”

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