Q. I have noticed that all the REO and short sale homes have asking prices that are on the high end of market value. How long before the deals start showing up? I really want to buy again but based on the median household income the prices will need to come down about 40% (in the 90808 area) before the average buyer can afford them. Is there a way to get a REO house for such a discount at this time?
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My Answer:
Hoo! Hoo! HOO!
By your question "Is there a way to get a REO house for such a discount at this time? " I know you are a C guy or gail. What that suppose to mean?
Before I start, share you a joke. A principal asks a new teacher to his office. The conversation is as follows:
Principal: "This morning I saw you treat a student so mean. Why?"
Teacher: "The student didn't do his homework, made so and so..... bad behaviors in class. The worst student I've ever seen."
Principal: "Every student has his potential. Treat everyone with all kind of grades equally with love and respect. You never know who he will be in the future."
Teacher: "I know grade A student will be our future. They are so intelligent."
Principal: "I am old enough to agree with you. Grade A students can be a scientist, college professor, doctor, lawyer or CPA."
Teacher: "Grade B students are doing so so. They can be an average folks."
Principal: "Wrong, They will be a great businessman, CEO of CITI, congressman."
Teacher: "Grade C students are lousy. They are problems for the society."
Principal: "Young man, you are totally missed. They are the material for our next President like George. Treat them well with love, respect and patience"
How dare you ask the question above? You are my kind of guy! Graded C. Period.
Look at the lady giving you the first answer. She's definitely not a grade C student, smart enough to understand those tones normally set by NAR.
Okay! To me, when I said "C" guy, I mean "Crazy", "Creative", and "Courageous." Absolutely not normal to the normal norms. Don't be mad at me. I always say to myself: "I am abnormal." What can I say when there are sayings: Normal risk turn in normal reward, Normal people end up with normal life (to depend on Social Security).
Well, you are crazy, but NOT so crazy to me.
All the big guys, including NAR, California State Controller, CFC's Mozila, said there is a 8-10% depreciation for LA RE market at this moment, and you demand a 40% discount NOW. Is it like you walk in a department store where 15% sale is on, and insist to have 40% instead? Are you crazy? You tell me (I did it once and got what I wanted at K'Mart, North Gate mall in Seattle, 20 years ago.)
As I recall, a buyer asked me to help him buy 3 unit house for less than $240K in San Gabriel Valley, CA. I know that's very difficult but can be done if I try hard to dig out East Los Angeles, next to South Pasadena or El Monte. He said he didn't like what I showed him. One day he told me that he liked a neighborhood. From his description, I thoght it was in the East LA, but got confused. So I took him to where he wanted.
Yes, we were heading toward East LA. At the last minute, OOOOO, my god, we just made a little twist turn. it is close enough to East LA indeed. But we end up in a north area that is around Atlantic/ Huntington Blvd. It is in San Marino, the most expensive community in the Vally. Over there everything is a million dollar single mansion ( LA county median price of $200-220K at the time). No condo or whatsoever multi-family dwellings exists there. I gave him up because he is more crazy than I am. Not a realistic man.
Luck I am. You aren't crazy enough to pinpoint at a specific house and say to me: "I want it and get it for me NOW for two cents." You are still in my "crazy comfort" zone. I will work with you if I am a commission-oriented agent. But I am no longer doing that.
Believe me, you are creative, but NOT so creative to me.
Creativity has to base on Reality. You are NOT having the skills or access needed to see the real picture when you said:"I have noticed that all the REO and short sale homes have asking prices that are on the high end of market value."
Where did you get the perception on the new development? That's totally different from what I have seen. One month ago, I told my agent friends in LA: "Your REO pricing is dropping about 25 percent from the peak." No one disagreed. Two days ago, I said:" it seems go down 30% now." Some of them told me "probably even worse than that."
I know some areas in Orange county, the condo market is dropped more than 45-50 percent. Even I am in Texas, I watch my lovely home town closely everyday.
Cheer up! Here is the last and the best, you are courageous ENOUGH to ask a "dumb" question (to a well-trained GOOD and NORMAL agent).
All you need is to please develop your skill or get the right connection to see the facts or, at least, tell me how you collect the information. As the lady above did, from the NAR website? If you want to buy a REO, go fishing and catching a "distressed housing" specialist for you, not a regular agent who does NOT know the dynamic economy of REO. REO is a unique sub-housing market, totally NOT normal as you saw at NAR website. It is a wholly different ball game as apples to oranges. What kind of fish you want, go where they are.
It is no problem for me to get some houses for myself Now that meets your criteria. But I am relax and take easy with the patience you said. No action will be taken until I am pleased. So let's see if it is possibe for me to have a 80% sale shopping spree in LA real estate mall in 2 years.
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