September 10, 2014

Assume Every House Has A Motivated Seller

The San Francisco Bay Guardian reports from California. “Two Realtor groups have dumped nearly $600,000 into the campaign against Prop. G, the tax on flipping properties to discourage real estate speculation and evictions in San Francisco. Sara Shortt, exeuctive director of the Housing Rights Committee of San Francisco and a strong support of Prop. G, told us the huge donations indicate what’s really driving opposition to the measure. ‘Make no mistake: the polished No on G mailer you receive spouting lies such as ‘G will hurt homeowners’ is coming directly from the mouths of the Realtors, the very people who have the most to gain by continuing to allow for evictions and flipping of apartments,’ Shortt told the Guardian. ‘These are the same people who are making windfall profits by evicting low income tenants in San Francisco and wreaking havoc on our neighborhoods.’”

The Stockton Record. “A sense of reality and potential completeness permeated the complex Saturday as River Islands held its official grand opening. Three home builders — Van Dael Homes of Riverside, Brookfield Residential Properties Inc. of Canada and DeNova Homes of Concord are building homes in the $350,000 to $500,000 range. Hundreds of would-be homeowners turned out to look at the model homes and consider River Islands as a place to relocate. Many of those in attendance were from the Bay Area, harkening back to the days of waves of new commuters ‘living over here and working over there’ in search of affordable housing.”

“Even as a Great Depression held this huge housing development in limbo the past decade plus, Susan Dell’Osso and her family had been committed, engaged community members who believed their dream eventually would come true. ‘I feel proud of the type of development we have,’ she said. ‘We’re building a community, not just houses.’”

The Los Angeles Times. “If you’re renting out rooms through Airbnb or similar websites in Los Angeles, you could soon get an online warning urging you to collect and pay city taxes aimed at hotels. Malibu lawmakers decided to crack down on such rentals earlier this year, voting to issue subpoenas to dozens of websites to make sure taxes were being collected for short-term leases. In San Francisco, critics have complained that such rentals are whittling down the housing supply. Los Angeles Councilman Mike Bonin said that similar worries have arisen in Venice, where owners are ‘buying entire apartment buildings, evicting everyone … and making it all Airbnb,’ he said.”

The Desert Sun. “When Ulrike Maria beds down in her Palm Springs vacation home, she only sleeps on top of the bed, not in it. The reason Maria refuses to crawl into her Palm Springs bed is because she’s hardly the only one using it. Like many second home-owners in Palm Springs and other parts of the Coachella Valley, she rents the home out to vacationers. ‘Even though I know it’s all clean, I just personally don’t do it. I just make a bed on top of my bed,’ said Maria, who lives full-time in Los Angeles. ‘Many times’ Maria has thought about no longer renting the home. But because she and her husband are not able to come out as often as they would like, the home would often sit empty. And she admits, the rental income is an obvious incentive. ‘The money helps.’”

“Homeowners, however, should still expect to replace items like towels and silverware on a regular basis. ‘I think little problems all homeowners experience is the constant missing of the towels,’ said Maria. ‘Replacing of items — the pots and pans — because nobody takes care of them.’ Other small items like a hairdryer tend to ‘disappear’ over time. ‘And people spill everything,’ she remarked. Despite these inconveniences, Maria is thankful. ‘We’ve been really lucky. The pool guy told me, ‘we never found the TV or a chair in the pool.’ And I’m like, really? People do that?’”

Voice of San Diego. “San Diego’s not facing a business exodus as much as it is a people exodus – and the same trend holds for California. The county and the state have long experienced overall population growth. But fewer people from other states are moving here and millions of Californians have moved elsewhere. San Diego County lost more than 30,000 working-age adults from 2008 to 2013 despite a year-over-year net gain in the population during that period, according to a recent National University System Institute for Policy Research review of state Department of Finance data.”

“National University economist Kelly Cunningham found that nearly all who bailed on San Diego were Gen-Xers between 35 and 49 years old, a trend that hints at some deeper reasons for relocations. Job moves could’ve driven some of those departures but the region’s increasingly hourglass economy – with fewer middle-class jobs and steep housing prices – likely played a more pivotal role. Economist Jed Kolko emphasized that relocations were more common when and where home prices were highest compared with other regions out of state.”

The Los Angeles Register. “As the Orange County real estate pendulum swings, it is now a buyer’s market. There are more houses for sale, more seller price drops, and a longer number of days sellers have to have their houses on the market. Now that contingencies are back in fashion, be proud of yours! Make offers even more boldly if your house is actually in escrow. Have your buyers removed every single one of their numerous contingencies? That’s the new definition of noncontingent. Be as bold as you can be.”

“Ask to have the walls, carpets, wood floors and windows professionally cleaned. Ask to have your homeowners association dues paid for six months or more. Ask for that Hawaiian vacation you’ve been dreaming about. Who knows? The sellers may have a time share they’d be happy to lend you. Ask for it. Whatever it is. They can only say yes or no. You’re good with that, right?”

“Even if the flowery description of the house doesn’t mention how motivated the sellers really are, in this market, assume that each and every house you see either online or in person has a truly motivated seller behind it. Don’t ever be afraid to start with what you may think is a ridiculously low offer. If you’ve gone through a couple of rounds of counteroffers and been a Ninja Negotiator on price and terms, and you’re not quite ecstatic with the deal, don’t be afraid to walk away.”

“Letting the sellers’ last-ditch effort die on the negotiation table might work in your favor. You may be surprised when they ask you to reconsider a few days later. And they may be much closer to the number you’re looking for than you may have expected.”

Bits Bucket for September 10, 2014

Post off-topic ideas, links, and Craigslist finds here.