The market fall-back to more affordable levels has allowed another of my clients to get her dream property.
She is an attorney nearing retirement, and like other "baby-boomers" has longed to get closer to the land, so to speak, in her retirement. Specifically, she wanted a big lot for a modest new home and a HUGE organic garden. Views optional, but very desirable.
She had been looking for the right property for some time when one of her attorney friends told her about working with me to get a terrific buy in Laguna Beach after only a week of looking.
When she heard that we had been able to negotiate $150,000 off an already-market-priced ocean view home for her friend, she decided that we were the ones to get her dream for her, too.
We set up her own Personal HomeSearch Website, and had been looking for a while, when suddenly, there it was! It was nearly an acre lot, in a neighborhood of lots 1 acre and larger, and surrounded by homes up to 7,000 square feet. In fact, a 4,000 sf home had been planned for this lot, too, but the market-fallback had put those plans on hold.
Meanwhile, the lot had a dilapidated home on it, plus a garage that was literally falling off its foundation. Although she had 20% down, we HAD to finance the lot as a home (and not as a lot), because land financing is virtually non-existent anymore, and even if land financing were available, it would have been for a short term, with a VERY high interest rate.
The first thing I did was to have the listing agent remove the statement in the MLS that "the value is in the land". The selling bank and their agent had assumed that the buyer would just doze the existing buildings to clear the lot, literally buying it for the land only.
In our case, however, only financing the property as a home (30 year fixed, great interest rate) would work. We offered a little more than asking price to be sure we were the winning bidder, and we won out over other bidders!
The next task was to get an appraisal that didn't call for repairs, because the property was owned by a bank, and they wouldn't do any repairs, and they wouldn't let us repair their property before the close of escrow, so that we could satisy our lender and close escrow.
The first lender's appraisal came in $36,000 less than our offer, but more important, had a laundry list of necessary repairs, and a requirement for more inspections (which would have required still MORE repairs, for sure). Total no-go for us, even though the bank agreed to reduce the price to $10,000 more than the appraisal.
With only a little time remaining during our contract period, we went to another lender to try to rescue this perfect property for my buyer. This new lender's appraisal came in at a price still lower, this time $76,000 under our offer, but NO required repairs! (So much for the idea that ANY appraisal is anything more that one person's opinion!)
Wow… this was something we could work with, because negotiating a lower price with the bank was going to be much easier than trying to work around major repairs that were preventing us from closing escrow. Needless to say, the bank was not impressed with our new appraisal, or with our new offer $76,000 less than our original offer. In fact, they probably thought that we had somehow rigged the second appraisal.
In any case, their first response was just plain "no". We came up in price, but the answer was still no. Finally, we got word from the listing agent that they approved a price at just a few thousand over our last offer. This was tight, since the buyer had to put down the original 20% in cash, plus pay the additional difference between the new price and our low-ball appraisal in cash, too.
But, it was doable, so we agreed and then waited… and waited and waited for the bank to send us signed documents. Two weeks went by, but no signed paperwork. The listing agent said they were just slow sometimes, but I had my doubts.
The loan was already approved, and we were just waiting for the bank to move, and then they did move… coming back with one more "nip" on the price. Incredibly, they came back with a price $6,000 higher than they had orally agreed to, saying that "senior management didn't approve the price that [their own asset manager] had approved"… say WHAT??!
Normally, in the scheme of things, a $6,000 higher price in this price range would have been fairly trivial, especially compared to the terrific financing and the bargain price we were getting. But we were already strapped for cash because of having to pay over the low-ball appraisal. Additionally, my buyer just about blew a gasket fuming over the bank's bad faith negotiating tactics, and wanted to call them up and rattle her sabre at them, fuming and ranting like an angry attorney… which she was at that point.
We talked about it, and we focused on the fact that we were STILL $51,000 LESS than her original offer, not to mention the great financing. She calmed down after realizing that this was true, and that she really was getting the property financed for 30 years, with a great interest rate, and paying $51,000 real dollars less than she had offered (which, itself, was actually less than she was willing to pay for this uniquely right property for her).
With her lender's approval, I fronted the extra cash to close, and close we did.
She now has the perfect homesite for her, and is busy fixing the place up to be her temporary home, while she builds her dream home (and cultivates her HUGE organic garden).
These are the things that make my day!
She is an attorney nearing retirement, and like other "baby-boomers" has longed to get closer to the land, so to speak, in her retirement. Specifically, she wanted a big lot for a modest new home and a HUGE organic garden. Views optional, but very desirable.She had been looking for the right property for some time when one of her attorney friends told her about working with me to get a terrific buy in Laguna Beach after only a week of looking.
When she heard that we had been able to negotiate $150,000 off an already-market-priced ocean view home for her friend, she decided that we were the ones to get her dream for her, too.
We set up her own Personal HomeSearch Website, and had been looking for a while, when suddenly, there it was! It was nearly an acre lot, in a neighborhood of lots 1 acre and larger, and surrounded by homes up to 7,000 square feet. In fact, a 4,000 sf home had been planned for this lot, too, but the market-fallback had put those plans on hold.
Meanwhile, the lot had a dilapidated home on it, plus a garage that was literally falling off its foundation. Although she had 20% down, we HAD to finance the lot as a home (and not as a lot), because land financing is virtually non-existent anymore, and even if land financing were available, it would have been for a short term, with a VERY high interest rate.
The first thing I did was to have the listing agent remove the statement in the MLS that "the value is in the land". The selling bank and their agent had assumed that the buyer would just doze the existing buildings to clear the lot, literally buying it for the land only.
In our case, however, only financing the property as a home (30 year fixed, great interest rate) would work. We offered a little more than asking price to be sure we were the winning bidder, and we won out over other bidders!
The next task was to get an appraisal that didn't call for repairs, because the property was owned by a bank, and they wouldn't do any repairs, and they wouldn't let us repair their property before the close of escrow, so that we could satisy our lender and close escrow.
The first lender's appraisal came in $36,000 less than our offer, but more important, had a laundry list of necessary repairs, and a requirement for more inspections (which would have required still MORE repairs, for sure). Total no-go for us, even though the bank agreed to reduce the price to $10,000 more than the appraisal.
With only a little time remaining during our contract period, we went to another lender to try to rescue this perfect property for my buyer. This new lender's appraisal came in at a price still lower, this time $76,000 under our offer, but NO required repairs! (So much for the idea that ANY appraisal is anything more that one person's opinion!)
Wow… this was something we could work with, because negotiating a lower price with the bank was going to be much easier than trying to work around major repairs that were preventing us from closing escrow. Needless to say, the bank was not impressed with our new appraisal, or with our new offer $76,000 less than our original offer. In fact, they probably thought that we had somehow rigged the second appraisal.
In any case, their first response was just plain "no". We came up in price, but the answer was still no. Finally, we got word from the listing agent that they approved a price at just a few thousand over our last offer. This was tight, since the buyer had to put down the original 20% in cash, plus pay the additional difference between the new price and our low-ball appraisal in cash, too.
But, it was doable, so we agreed and then waited… and waited and waited for the bank to send us signed documents. Two weeks went by, but no signed paperwork. The listing agent said they were just slow sometimes, but I had my doubts.
The loan was already approved, and we were just waiting for the bank to move, and then they did move… coming back with one more "nip" on the price. Incredibly, they came back with a price $6,000 higher than they had orally agreed to, saying that "senior management didn't approve the price that [their own asset manager] had approved"… say WHAT??!
Normally, in the scheme of things, a $6,000 higher price in this price range would have been fairly trivial, especially compared to the terrific financing and the bargain price we were getting. But we were already strapped for cash because of having to pay over the low-ball appraisal. Additionally, my buyer just about blew a gasket fuming over the bank's bad faith negotiating tactics, and wanted to call them up and rattle her sabre at them, fuming and ranting like an angry attorney… which she was at that point.
We talked about it, and we focused on the fact that we were STILL $51,000 LESS than her original offer, not to mention the great financing. She calmed down after realizing that this was true, and that she really was getting the property financed for 30 years, with a great interest rate, and paying $51,000 real dollars less than she had offered (which, itself, was actually less than she was willing to pay for this uniquely right property for her).
With her lender's approval, I fronted the extra cash to close, and close we did.
She now has the perfect homesite for her, and is busy fixing the place up to be her temporary home, while she builds her dream home (and cultivates her HUGE organic garden).
These are the things that make my day!
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