Thursday, February 28, 2008

Dun For Good

From the Sacramento Bee (updated story):

Three months after it filed for bankruptcy protection from its thousands of creditors, Granite Bay homebuilder Dunmore Homes says it has begun shutting down its operation and going out of business. In a bankruptcy court filing, the firm's lawyers say Dunmore..."is currently winding down its business and liquidating its assets."

The statement stands in sharp contrast to others in recent months that the builder hoped to emerge intact from its financial struggle and resume building when the real estate market improved.
...
State officials say if Dunmore goes out of business recent home buyers may find no one to honor warranty obligations.
From Roseville & Rocklin Today:
The question, "If they think my home is overpriced, why don’t they offer me something lower?" may be one of the most common heard by real estate agents around the Sacramento area. This seems like a logical seller response to learning that the potential buyer who looked at their home yesterday said, "We liked the house but it was overpriced."

21 comments:

Kip said...

regarding Dunmore:
there was a news story a while back about contractors putting liens homes built by dunmore for the outstanding debts dunmore had when they went bankrupt. The problem is they were putting liens on homes that had already been sold and closed. Anyone have any legal analysis of this? How can the contractors go after assets that no longer belong to Dunmore? What's it's closed it belongs to the buyer.

siflsockpuppet said...

As does the lien, I'm afraid. Same problem that happened when a Sac area pool builder went out of business a year or so ago, leaving customers with half-finished pools and contractor's liens. This is just on a much larger scale.

Diggin Deeper said...

"If they think my home is overpriced, why don’t they offer me something lower?"

Blame the listing realtor, who you probably wouldn't have listed with if they told you what your'e home was really worth.

Price it high, get the listing, and two weeks later hammer the seller into pricing it where it belongs. Happens all the time...

SacramentoCrash said...

"State officials say if Dunmore goes out of business recent home buyers may find no one to honor warranty obligations."

Duh!

Poor homebuyers got screwed. Those guys probably took development management fees and are now "out of the game".

Patient Renter said...

"If they think my home is overpriced, why don’t they offer me something lower?"

How about this one:

If you know your home is overpriced, why don't you set the price lower?

alba said...

its not even a valid/worthy/serious bid unless its within 3% of the asking price...just ask any realtor. Don't all homes, using experienced professionals, sell within 3%? Those guys are geniuses. That game only validates the realtor, not the true value of the home. Yet another paradigm/convention to be blasted.

Gwynster said...

Because when we offer what we think it's worth, we get called "lowballers" and "not serious buyers". We are told "we aren't giving it away". I see this when people include "bring all offers" or "very motivated seller". So you write one up and the sellers get insulted.

Why bother any more? Just say "very motivated to sell at asking and bring all offers no less then 2% below list" and get it over already.

I gave up even bothering and only consider REOs. Why put yourself out trying to give the pig singing lessons?

Buying Time said...

Amen Gwynster...was just about to write those same word, but it looks like you beat me to it =)

Gwynster said...

hehehe great minds think a like >; )

That comment from the R & R just cheesed me off. The moeny will go where it's treated best (I really like that axiom)

golfer_X said...

Most of the REO's down here in SoCal are still so overpriced that you need to offer 30% to 50% less in order to get them at a reasonable price. Realtors look at you like you are leper when you want to place an offer that low. I've fired off 2 offers at 30% below listing on REO's and did not even get a response. I honestly think the listing agent didn't forward the offer to the bank.

Funny thing is that one of the homes I wrote an offer on (about 4 months ago) now has an REO right across the street listed for less than my offer. Good thing they didn't take it. I'd be pissed. The home was listed at $699k, down from $825k. I offered $480k. The new REO is listed for $464k. Same model, same lot size. The one I offered on is still asking $639k. I should go back and offer them $280k.

Sellers/Banks, if you want offers then LOWER THE FRIGGIN PRICE!

dvobell said...

Thanks for that story, Golfer X.
You bullet-dodger, you!

It's a good reminder that we still don't know what a "lowball" really is in this k-razy market.

Given the glacial liquidity of RE in general and the mind-bending inventory out there in Carnage Land, there would seem to be little chance of 'missing the bottom' or whatever reason someone could possibly come up with for grasping at a rapidly descending scimitar...

In fact, I believe this story ends with Many Years of RE in the doldrums -- not depreciating nominally, but certainly losing value to Big Bad Inflation.

Every day we sit out will be sweeter than the last, and that may well last Years...

Diggin Deeper said...

Anyone know what a "BPOE" is regarding REO's and foreclosure properties owned by banks?

AgentBubble said...

Haven't heard of a BPOE but I've heard of a BPO, which is a Broker Price Opinion. Commonly, the bank will survey a few well known brokerages and get their pricing opinion on an REO before listing it. BPOs are used for a few other less common purposes as well.

Diggin Deeper said...

Thanks AB....I heard the term yesterday relative to banks that have quite a bit more inventory that hasn't hit the market yet. It seems they're so backed up with properties that they can't get to them all in a timely manner.

Jacob said...

Yea, it doesn't make sense to even bother offering 50% off. Just wait for the bottom to come and it will be nice and long and flat, also that will give you time to make sure the neighborhood has not deteriorated to the point where you no longer want to live there.

And don't even think about buying in a development that is not completed. Aside from the fact that if may never get completed, now you have these leins from builders to worry about.

wrong moves said...

OK, I just went and read the article out of "Roseville and Rocklin Today". Ms. Jalone says she likes to show her sellers the competition in the area and then they decide on a list price. OK, but if all of the other houses are way overpriced, and you compete with them, then by guilty association are you overpriced too? I've said it before, but I'll say it many more times--The buyer decides the value of any object. That is why there are 175 sales in retail establishments per year and why in real estate there are "lowballers".

Diggin Deeper said...

Prices are a moving target especially if a neighborhood is peppered with REO's. Getting it right the first time not as easy as it appears.

1. With so few sales, comps could be based on the past 60-90 days in a market that appears to be dropping multiple % pts per month.

2, Rogue sellers still want to hold out for numbers that won't sell. Good agents will advise the proper range, but often sellers are their own worst enemy and they do have the final say.

3. Some of the agents I've talked too recently compensate by asking the seller to price their home 10% underneath current comps. When buyers agree to do this they do get activity. Usually they don't because they come with some useless feature that makes their more attractive at a higher price.

G Spot1 said...

Thanks, Gwyn. I hope every listing agent and seller reads your comment.

I've written 3 offers that were between 5 and 10% under list. While I have been fortunate to not have "insulted" the sellers, the sellers nonetheless assumed that I wanted to split the difference. Look - if I wanted to split the difference, I'd have written my offers for 10% less, but then you would have been insulted. I'm done with that crap. If a seller wants my money, he or she will have to get within 2-3% of a reasonable price.

Oh, and in two of the houses I wrote offers on, the sellers eventually got 6-7% less than my original offer! The third pulled their house off the market after a comp closed at a price that suggested my original offer was probably about 5% too high. So don't delay, sellers, things are only moving in one direction....

Patient Renter said...

All this BS with sellers sounds like too much to deal with - another reason I'm glad to be riding the bench for now.

Gwynster said...

While the seller schadenfreud is a pretty tasty dish, the zero growth policies in Davis coming under fire (and being blaimed for the school enrollment declines) is like have dessert all day, every day.

Like NorCalJeff said, the Sh..storm coming to Davis is picking up speed.

HousingRealist said...

I would agree with your point to an extent. However, I think our relationship with likes of China or Japan is somewhat symbiotic. In that if they were to discontinue their investment in dollar denominated assets, they would make their own goods and services more expensive for Americans to purchase. Which in turn slows the export economy in question. For most individuals a falling dollar is simply a headline. Individuals hold few liabilities in foregin currencies. I would not be surprised if the dollar were to rise over the near future, as when the "taxi driver" is talking about the weakening dollar the contrarian in me says we've hit a bottom. The same little voice that was telling us that the "emperor has no clothes" in the real estate market over the last number of years. Furthermore,if one looks at dollar flows into foregin investments, we have had mass inflows into foregin stock and bond funds with a net outflow from domestic large cap stock funds. Which is the reverse of what was ocurring in the late
90s, where we had mass inflows to large cap growth, and outflows from foreign investments. How'd those investors fair? I have certain people that I look to as contrarian indicators, as they tend to get excited about the hot asset class at the exact time one should be selling. Be it real estate, stocks, bonds, currencies etc.