With sales continuing to be sluggish and new homes hitting the market at a feverish pace recent gains will be difficult to hold.

Victor Valley:                                                                                                                                  1/9-1/15- 65 homes closed escrow at an average sales price of $60 per sq. ft. for $132,397 after spending 73 days on the market.

Home placed on the market: 133, at $75 per square foot and an average price of $153,511

Antelope Valley:                                                                                                                                  1/9-1/15- 77 homes sold at $72 per square foot, and an average sales price of $139,356

Homes placed on the market to sell: 164 homes at $85 per square foot, averaging $164,235

Too many homes on the market?

Still a little too early to tell if this is going to turn into a trend.  But if we continue to see twice as many homes coming onto the market as those selling it could turn into a very tough year indeed for Sellers, and home-owners.  For Buyers this may be the last chance to finally own your own home for many people, but wait too long and rising interest rates may make it a mote point.

Well ok maybe not, but here in Southern California seems like a lot of the news would have you believe otherwise.  Yesterday the Los Angeles Times reported that prices are down, sales while up compared to February are lower than normal seasonal increases, blah,blah, blah,  http://www.latimes.com/news/local/la-fi-homes16apr16,1,5279643.story

What isn’t being talked about:

Well in my office just in the past 2 weeks some of my associates have seen as many as 12 offers on a single property.  One even had multiple offers above the asking price.

Now that’s not to say the pain is over, BUT median home prices across the state or average days on market don’t tell the whole story.  If they did your local lawyer wouldn’t have the book:

Just like in so much of life there is more below the surface.

One of the questions that I ask myself( and hopefully you do to) is,

What might this person hope to gain from telling me this? 

Well in the case of the media.  They say “Home prices up, economy strong, unemployment down, and sunny weekend coming.”  And we all go, “Isn’t that nice”.  But if it’s “The sky is falling, the sky is falling.”  Well than most of us stop and buy the paper, the magazine, or watch the   6 o’clock news and hope to make sense of it.   Are these bad people out to deceive everyone? Or are they simply doing their jobs and trying to sell you something?  You’ll have to decide for yourself, but in the meantime I’ll continue to be an optimistic/realist.  Look for the opportunity that others don’t see.

While this has to do with some recent decisions by the Greater Antelope Valley Association of Realtors(GAVAR) it seems to also in one form or another affect the other associations I deal with and maybe in your area as well.

Recently GAVAR, as well as the Victorville Association both made announcements that offering compensation based on the net sales price, "selling price minus concessions to the buyer from the seller", was a violation of the local MLS guidelines.  Commissions listed on the MLS must be either (1) a percentage of the gross selling price or (2) a definite dollar amount.  Or a combination.  The argument for this was that.. "The purpose of this rule is to allow cooperating brokers to determine their compensation with reasonable certainty before finding a ready, willing, and able purchaser for the listed property. ......"

Ok so now let me get this straight a Broker/Agent with a buyer as a client is not smart enough to figure out that the commission that they will receive at the close of escrow is the sales price minus concessions such as seller paid closing costs times (place commission amount here)?  Is that really the justification for this attempt to serve ourselves rather than our clients?

What about the fact that the sales price listed in the MLS often does not equal the actual price at the close of escrow?  Is someone going to tell me that the buyer's agent really expects to be paid a commission based on the listing price and not the selling price?  Come on.  When are we going to get real here and start getting ahead of things instead of trying to control the market and only adapt when we absolutely positively have to.

Ok so some of you are saying "What the heck does this have to do with customer service?  The MLS is for offering compensation and protecting our industry."  Too true but what about when it gets in the way or even harms your ability to honestly represent your client.

Well if your client wants to offer 3% of the net sales price to the buyer's agent why would your local MLS not want you to share that with Realtors in your area?  Now Joe Six-Pack may not pay attention to this detail but trust me the money men and women on Wall Street absolutely do.  This group of clients is uber-focused on the bottom-line, as they should be.  So that being the case they have no intention of paying a commission on money that does not come into their coffers. 

Here is an example:

Bank XYZ has a property that they have acquired thru foreclosure.  They want it sold and they want it sold NOW.  These folks are smart enough to know that the best way to get this done quickly and for the best sales price is to hire a knowledgeable local Realtor to represent them and to offer a reasonable compensation for having that service provided.  However, they also are not in the habit of just giving money away to anyone without receiving something of value in return.  So far this is hardly an unreasonable expectation.  So they list the home with the friendly, neighborhood, superstar Realtor. And they agree that selling this home quickly has a lot of value to them.  So much so that the asset manager for  Bank XYZ says:  " We will pay you MR. Realtor 3% of the sales price and we will pay the Realtor representing the buyer another 3% as well.  However we are only going to pay for the actual net sales price.  If the buyer needs 10,000 in closing costs we are not going to pay a commission on that amount.  We will co-operate with this buyer because we need the home sold but we are not going to pay $600.00 in commissions on money we never see."

$600 $600 what do you mean $600 Russ?  Well at 3%/3% on $10,000 we are talking about $600.  And Bank XYZ does not have just one home that has come back to them as a foreclosure they have dozens.  So your darn tooten they are not going to pay $600 commission on money that literally did not go on their balance sheet as income/revenue.  And why should they.  Take that same $600 multiplied by all the bank-owned properties in your area and see how fast that adds up.

But they want and expect you, Mrs. Realtor to encourage an offer on this and all of their Properties and part of that is to place the home on the local MLS.  And they want the home showing ALL of the relevant information including what the commission that they are willing to pay to the buyer's agent is.  Completely, openly, with-out any ifs, ands, or buts.

So again my question is:  "How does this serve my clients?"

If you have other opinions and/or possible solutions to this I would love to here from you.

If you know the answer then your a better man (or woman) than I.  Will prices get better or worse? Will loan rates go up or down?  Who knows, but on the other hand who cares?
Ok maybe that seems a little harsh let me try it this way.

It really does not matter what the real estate market does next it still is the best way to build long term wealth for you and your family.  WHAT!  I know I can hear you now.  Are you crazy Russ the markets crashing, prices are falling, loans are impossible to qualify for. 

Blah

Blah

Blah

I've heard it all before in the 70's, in the 80's, in the 90's, and now once again everyone goes on and on about how bad it is. 

Yes things are down, but what a great time to buy a house if you missed your chance during the price increases over the past couple of years.  What a great opportunity to invest in the rental properties you were looking for. Or maybe your thinking about flipping something wouldn't now be the time to all but steal a home from the bank that needs to sell the foreclosure today.

The opportunities are almost limitless if you just know where to look.  Just don't try getting rich overnight.  Real estate is not about "Get rich quick" it's the place to become wealthy forever.

Till next time here's hoping you find your piece of the American Dream.

Yesterday I was talking with (emailing actually) the processor for a mortgage broker.  I represent the seller in this particular transaction which is 120 days into a 45 day escrow, yes way over due, and trying desperately to finish funding conditions.  One last item remaining was a buyer's affidavit that needed to be redone.  When I asked if they either had it done or would have it completed and back to the bank in time for the one o'clock funding cut-off the response I received was...    " We're working on it"

Now I don't know about you but I have to admit I have used that response before in similar situations and suddenly it occurred to me.  What does that even mean?  Are you completing it now?  Is the buyer on the way to sign?  Has everything been done and just needs to be faxed?  What What What? 

Ok I admit I have given this non-answer, answer more times than I care to admit.  So on my oath as a Realtor NEVER again.  Or you can pummel me with a carrot until I lose consciousness.

Admit it you have used this response, or something like it yourself.  Does it really answer the question?  Your broker asks "How are things going on the Jones' deal?", or "Is the contract done for the (pick your street name)?"  How about when a client asks " Any news on selling my home?"  And without even thinking we respond I'm working on it.  Ok ok, I know you would never do something like that your freaking perfect at communicating with those around you.  Good for you then go read something else.  For the rest of us can we all agree that this answers nothing, allows us to pretend we are doing something and does not serve our clients, companies or ourselves.  Great so from now on, no more "I'm working on it."

Are there a bunch of landmines scattered thru-out the housing market? You bet.  Homes that are over-priced, have fallen into disrepair(some out of sight), neighborhoods that can and will continue to lose value, and many other potential pit-falls.  It can be overwhelming trying to sort thru the mix.

But if you are looking for some of the greatest opportunities to increase your personal wealth now may be the best time for you.  Prices have been correcting for the past several months.  Banks have been left with no choice but to foreclose on hundreds, even thousands of homes in some areas.  And all they want to do in most cases is sell these homes as quickly as possible in order to raise the bottom line.  Prices in most areas are well below previous peaks.  And with more foreclosures that means that the number of individuals and families that must rent is going up. 

What does that mean for you?   If you have been careful/cautious with your credit and your finances now is a great opportunity to have other people increase your wealth with their money.  The banks money to finance your property, and a renter's money to make your monthly payment.  Maybe even create a small monthly cash flow, but even more importantly.  Just like every previous real estate market, this one WILL change.  In the meantime it's a dangerous time mixed with a lot of opportunity.

Well the obvious answer is-OF COURSE. 

Technology is a wonderful thing, and today we live in the information age no two ways about it.  It allows you to read this even though we maybe across the country or even around the world from each other.  When it comes to buying or selling a home it is simply awesome.  Think about it, internet access to school reports, neighborhood profiles, find-out the latest sales information, pictures galore(even satellite images) virtual tours, even streaming video and more.  It is easy to become seduced by all the information available and the ease with which it can be distributed and retrieved.  As a home owner thinking about selling, it is easy to think, "Hey I could do this on my own.  Why would I ever pay someone else to sell my home?  I can market it myself. I understand all this internet stuff."   Or maybe you have a teenager, cousin, niece, or buddy at work that gets all this tech stuff.  Hey you can have them do it for a couple of bucks right?

So do you really think this is how someone buys a home in the technology age?  Think Mr./Mrs. Buyer sees a home on-line falls in love, makes an offer, buys the home, and that's all there is?  Escrow closed you get your money and on to the next town neighborhood whatever you go.

Wow if only it really was that easy.

First ask your self these questions

1-Would you buy a home that you had only seen pictures and maybe a video of?  Well if you're like most you won't.  You want to kick the proverbial tires see the home up close and personal.  So if that is the case if you do it yourself who is going to be available at 11am on Tuesday or 4pm on Friday afternoon to let a prospective buyer see your home in person?

2- How about insuring the proper disclosures are signed?  Do you know what is required not only in your state, but also your county, city, and neighborhood?

3-What about necessary inspections? Proper documents, title reports, on and on it goes. 

And that doesn't even scratch the surface.

Still there is a ton of information available and a lot of it for free on-line.  You can do it yourself, that's not really the question to ask.  You can learn to build an automobile, defend yourself in court, perform open heart surgery and do a million other things all from the comforts of the home your thinking about selling on your own. 

The real question is-

Should you?

Before launching into this particular blog I need to, in the interest of full disclosure state the following:

I am a member of the Greater Antelope Valley Association of Realtors and a member of the local government relations committee for this association.  None of the views expressed here are those of any of these organizations and should not be taken as the opinions or positions of any of its members.  Ok that said let the fireworks begin.

One of the givens here in America is that anyone can own real estate.  Some do, some don't but the fact that if you want to, save your pennies and are willing to sacrifice anyone can own a home.  Going along with that is that once you buy your home is the idea that it is your castle.  A place to call home and that the government can't just come in and give the right to enter your home and make changes to it to some one else.  But now all of that has changed. 

Recently the City of Palmdale, in an attempt to mitigate the damage real and imagined, foreclosed properties are doing to neighborhoods thru-out the high desert, passed ord. 1345 which says in part, view the entire ordinance at http://www.cityofpalmdale.org/ , Responsible persons, including beneficiaries/trustees, shall maintain properties subject to inspection and/or registration pursuant to this chapter, as required by Chapter 8.36PMC and any other applicable provisions of federal, state or local law, and shall keep such properties free of weeds, dry brush, dead vegetation, trash, junk, debris, building materials, any accumulation of newspapers, circulars, flyers, notices, except those required by federal, state or local law, discarded personal items including but not limited to furniture, clothing, large and small appliances, or printed material and shall take any other action necessary to prevent giving the appearance that the property is abandoned, including but not limited to the following:" etc.etc.etc.

 All sounds well and good at first glance until you look deeper. When does this start?  "Any beneficiary/trustee, who holds a deed of trust on a property located within the City of Palmdale, shall perform an inspection of the property that is the security for the deed of trust, upon default by the trustor, prior to recording a notice of default with the Los Angeles County Recorder's Office."

Do these beneficiary/trustee own the home? NO! Do they legally have the right to go onto a property, and make changes to a home that they don't own? Well according to the City of Palmdale now they do.  By initiating this ordinance in an effort to look like the city fathers are doing something, anything,  about trying to keep foreclosures from negatively impacting the community they have over-reached.  This ordinance now makes YOU, you keep your money in the bank, the stock market and other investments right, responsible for your neighbor's house.  Not only that, but by requiring the lender or the trustee to be responsible for maintaining the appearance of a property that is simply in default, the City of Palmdale is telling these same lenders and trustees like Chicago Title that not only can they come onto your property and do an inspection or make changes but that they MUST.  And by the way these "Trustees are at the same time required by law to have NO interest in the property but rather are required to be nuetral.  Since when did the U.S.A. become the U.S.S.R., where governments start telling banks and other institutions that they need to be going to someone's home and doing repairs, making changes and otherwise interfering with a homeowner's rights?  Is the government now going to start telling you that your going to have to take responsibility for the color your neighbor paints his home? 

What if you live in a different state but have your savings account with Bank of (pick one)?  Do you want them spending your savings to inspect, landscape, and maintain someone else's home?  Isn't the mortgage crisis already killing the economy enough?  Or do we need our politicians looking for even more ways to increase spending and putting even more pressure on home prices?  Not to mention, the City of Palmdale has and continues to collect taxes from all the residents and businesses that do business in Palmdale to pay for the "CODE ENFORCMENT DEPARTMENT", now they are going to charge investors across the country to clean up their town.  Oh and did I mention that as part of this the City of Palmdale is going to charge every bank for every single home that falls under this ordinance( over $100 per home just to complete the required city registration).  Do we want distressed properties devaluing our community? Of course not but this is not the way to solve the problem.  Throwing away one of our founding principals, individual property rights, just to be able to say that the city is doing something is not the way to fix or mitigate the problem.

 If the city of Palmdale, or the state of California for that matter, really wanted to make it easier, for homeowners to keep their homes they would suspend property taxes for a year, or do away with the Mello-Roos districts plaguing our state.  Now that your done laughing, seriously though infringing even disregarding individual rights even on a minor scale is something all of us need to fight against otherwise the next right that gets taken away might be yours.

With only 2 weeks remaining in March, right now may be the best time to make a killer deal on a new home, if you are ready, willing, and able to buy.  If being under a little pressure as far as time and energy is ok with you in exchange for saving thousands of dollars or more, this may be what you have been waiting for.

Quick disclaimer this information is about new homes and in most cases will have nothing to do with existing homes.  There, now that that's out of the way, let's move on.

As you are probably aware the past year has not been kind to the home building industry overall across the nation.  Yes, I know there are exceptions, but if you're in one of those few areas be thankful and understand that while this information is targeted to the majority of markets it still is valid in all areas to one degree or another. 

March for homebuilders means the end of the fiscal quarter, and for some it is also the fiscal year-end.  Soon these companies will be reporting their quarterly earnings, either to private investors, or in the case of publicly held builders those numbers will be released as earnings statements to Wall Street. 

"So what?  What does that have to do with me?"  Well if you're ready, willing, and able to buy and close escrow in very short order, many of these builders will do almost anything to make the deal work. 

What can you expect:  Well the builders are not going to give the home away, they are not in business to lose money.  But at the same time if they can improve the balance sheet I have seen where they will sell at a 1 to 2% profit, yes even sometimes at a small lose, un-like the more typical 8-12% profit.  Now they are not going to just roll over to make these deals and you will need to do the following things:

1-Be prepared, have your tax returns, paystubs, and misc. other financials in order and preferably with you.

2-Be ready to take between 3-5 days off of work to sign documents, do the home inspection, apply for loans etc.

3- Do your home-work with a Realtor, know what homes are actually selling for, what price adjustments has the builder recently made, do your research on the neighborhood and the builder, a great deal on a home you hate, in an area you do not like, from a builder who does not stand behind there product is NO deal at all.

Be ready to act quickly and you can make a great deal on a new home, be unreasonable and/or hesitate and all you'll do is waste your time and energy.