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A Real Case: Who cares about Average Price or Median Price! (I)

By Ed Tse

Services for Real Estate Pros with richvalley

November 15, 2007 02:28 AM

http://activerain.com/blogsview/272766/Median-or-Average-Housing

post on 10:22 11-14-07

At 09:25 11-14-07, I received an email informing me a new list REO in West Covina, CA. That's about 10 minutes ago. Now use my formula. Here is what I came up to the REAL TIME situation as to the property.

The email notice:

Posting Type:	Agent
Property Type:	Single Family
Address:	15*********WEST COVINA, CA
Bed / Bath:	3 / 2
Year Built:	1951
Square Feet:	1130
List Price:	$369,000.00

Based on the raw material, I did my homework after a few clicks on my computer. Here are what I got:

1 ) The last sale data as to the above property:

Recording Date (i.e., Sold Date)	08/05/2004
Land	$233,465
Improvements	$90,202

2) the recent sale (s) in the neighborhood:

1506 ******* WEST COVINA CA Imp. Size: Br / Ba . YrBlt / Eff: 1130 3 / 2 1951/1951

Sale Date/Sale Price: 08/11/2006 /$495,004

1610******* WEST COVINA CA Imp. Size: Br / Ba . YrBlt / Eff: 1286 3 / 2 1951/1955

Sale Date/Sale Price: 07/14/2006/ $605,006

Both comp are within one block, 800 feet radius. Very solid comp, except the time is over one year old.

3) My analysis:

1) The subject pprty was sold for $323K +/- on Aug. 5, 2004. Now the REO listing price is $369K. Take 10% off to reach its possible sale price. We came up a conclusion: in this area, housing price is dropped back to about the level of Aug. 2004.

2)The recent sale(s) told us: in 3Q2006, the area reached its peak: a similiar house sold for $500-600K.

3) How much the percentage dropped against its peak: Roughly 30-42%.

4) Action:

No action needed. That's not going to please me to take an action (Remember I am a cheap guy. Always pay less than half the regular price.)

How did I do it when I am in Texas, one thousand miles away, (allow me to quote a stock book title "To Invest Thousands Miles Away") talking to nobody and paying no fee? Hope you get the idea how powerful the internet is and how effective formula I have.

With my tool, who cares about Average Price or Median Price everybody's talking about! Did I mention them in this article for you to grasp a more precise and reliable perception?

Are you ready to pay monthly subscription fee to those paid web foreclosure service?

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Ed Tse

richvalley - Florence, TX

Case Closed. No need to ask me the actual address of this REO property.

I just got an email back after I made an inquiry. Here is the email:

From ********************* Thu Nov 15 08:20:52 2007
X-Apparently-To:	via 206.190.49.76; Thu, 15 Nov 2007 08:21:03 -0800
Received:	Thu, 15 Nov 2007 08:21:02 -0800

Date:	Thu, 15 Nov 2007 11:20:52 EST
Subject:	Re: REO Property Inquiry
To:	ET

This just went to pending status.

***** ***** ******

It was sold, at least in escrow at this moment. Ask me what I feel?

1. It is said: any lady has a lover/ taker no matter how bad her face is. A property has a buyer if its price is right. Who says the lowest potential buyer expected in its "Housing traffic forecast number"? As I recall, a top bank reported it would be 15 in the coming year, if 45 is for 1997, that will create a new record low of house buyer traffic in 20 years.

Everyone has his/ her projection while our FED reserve is sleeping on the driver's seat in the years. Use right tools and your common sense to prepare yourself. Act fast in time as an eagle catches a fish. The opportunity passes by in seconds.

2. There are a lot of sharks in West Covina, CA, so hungry to bite anything that makes sense. It is a "very hot" RE market. Who says it is a slow one?

3. Now you know I am really a picky and cheap buyer, hardly to be pleased. Or compared to other investors, I am a conservative chicken.

Nov 15, 2007 03:30 AM

Keith Stoller

Keith Stoller Tax & Business Solutions - Bakersfield, CA

Not bad. It's amazing what a little reseach and common sense can reveal. While is suspect it took more then 'a few clicks' it wasn't too much work. What did it take, about 10-15 minutes in the end?

Nov 15, 2007 03:32 AM

2 minutes at most, without paper work and calculation.

Nov 15, 2007 03:40 AM

Keith, thank you for your reply.

You're starting your RE auction business. Well, you are a little bit late in this field, but not too late.

There are someone dominating the market share. The major one started at least 3 years ago. They are great to serve and to make a lot of incredible profit. But I do believe they are so lazy to improve their business that leave them many weak spots. If there is a real good player coming up in the field and attack them efficiently, they will be eating up their market share easily. Hope you are the one.

Do you kow your competition well enough to have a market niche? Or you just get in to the trend trying to share the huge profit potential without a precise plan?

Nov 15, 2007 05:35 AM

Keith,

It took me 1 minute to review your business plan explained in your blog at ActiveRain to reach a conclusion:

I have no further to say. Good luck for a normal operation.

Nov 15, 2007 06:22 AM

I am out of my mind.

In California, you don't need my formula. You don't need to do anything but a phone call to get what I did.

However, you do need my formula if you are working on Texas REO. Do you know why?

Nov 18, 2007 12:00 PM

12-17-2007

I just got an email. To update on the subject property:

This REO listing comes back on market at $369K. It means an escrow fails thru. So you can present an offer lower or much lower than $300K now. We believe the housing price is down and going back to the year 2003 level in the area.

Still a long way to go to the bottom.

Dec 17, 2007 03:05 AM

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