Friday, April 01, 2011

Sacramento Real Estate Market - April 2011 Water Cooler

Post off-topic links, observations, and stories about the Sacramento real estate market. Please read the comment policy before posting.

9 comments:

patient renter said...

Hus - I'm still hoping you wouldn't mind sharing/posting some homebuying tips for those of us who still have yet to go through the process :)

husmanen said...

PR. I am not sure my tips are worth much. I was so OCD on the whole process that it occupied a large portion of my brain, nice to have some of it back though. Having said that I here are some of my tips.

• Know the rental market equivalents. Especially in areas where homes are similar or models are similar. This is a great tool but has limits in custom/unique areas/homes. Collect
• Collect data on recent homes sold and their condition.
• Buying a flipped house is more expensive as there are fewer lenders willing to deal. The closing costs are higher.
• Have all your financial data ready. Make no changes to your accounts (large amounts in or out).
• Even if you buy an AS-IS house get a good inspection.
• Calculate the taxes before hand. My estimate of total PITI was only off by $40.
• All repairs to your house will take twice as long and cost twice as much.

Patience, patience, patience.

And be careful. Everything seems so opaque and you get the feeling no one is on your side and everyone wants to push the limmits.

Any specific areas you would like me to share my experiences?

patient renter said...

Thanks for the tips. The bidding process is one thing I'm most curious about. How do you convince the owner, particularly if it's a bank, that your number is fair? And how would rental equivalents, which you mentioned, play into that?

Otherwise, I'm just generally interested in any/all things to "beware" of, where as you said it seems like everyone is out to push the limits (which should be expected given the conflicts of interest everywhere).

husmanen said...

PR. My bidding process was a little different that a typical sale. I worked a deal that was, lets just say, different.

But regarding my 'typical' bids, which none succeeded btw, I can say that no logic or information mattered. Only the bid price.

On my typical bids I can add that I was very close in the end, and I provided a lot of data to support my bid. But there was always someone that bid just above me, say 10%. Those houses are now about what I bid, and could possibly go 10% lower.

I would have accepted 10% lower but not 20% as they are now facing.

The data I used was included in a letter with the bid. The data included things like, rental equivalents, REOs in the area, latest sales, current asking prices and my guess for a future trend. As I said, these were summarily dismissed - but so far hold true.

I stuck to my guns and, price-wise, it paid off.

b1whois said...

here is my advice. in sept. 2010 i bought a home in s natomas for cash. it was an REO. in dec 2010 i bought another REO, also for cash.
in the process i made a couple dozen offers on short sales. i never heard anything back, even though the asking price on one of the properties was dropped below my bid, so dont expect anything to make sense out there. i have been reading that short sales are becoming easier, but at this point i would not waste my time, especially if i were looking for my next home.
you see, as an investor i can just throw offers around until something sticks, but someone looking for their next home may make tan offer on their dream house and then sit on their hands hoping to hear back. in the meantime prices are dropping.
as far as reo's one thing that happened to me twice was after i made my offer i was told they had multiple offers and to submit my highest and best. i am skeptical that there ever was another bidder, they were just shaking me down for more. also, if you do bid on an reo you must realize that the bank has no obligation to tell you about any of the problems. every "disclosure" they send you will be stamped "unknown to seller". so you will need a good property inspector. and you should look things over yourself. and check the county permit site to see what permits have been taken out. the bank may have fixed some stuff up and they should have gotten a permit and the site will also tell you who the company was that did the work. i never followed up, but you might be able to chat someone up to find out more about the property's condition under the new coat of paint. enough for now.

patient renter said...

Good stuff Hus and b1whois, thanks.

John said...

I am seeing people placing Craigslist adds requesting houses for rent in South Placer. The rental market is slowly getting tighter. This is indicative of reaching the bottom. Another 5 years and we might be out of this mess!

husmanen said...

Anyone have a salt water chlorinator for their pool? If so any comments or recommendations?

Googling reviews and technical specs seems to pull tons of 'opinion'. So I thought I would get some opinions of Sacramentans.

M said...

I have been following this blog for some time now. I have been involved in Real Estate my whole career. I have family in Citrus Heights, and we contemplated, but luckily never followed through, buying a property to rent out the area. We live in Alberta Canada.

The reason why I am writing this is, the company that I work for is looking to hire someone from outside our area. I suggested to look in the metro areas that dealt with some of the biggest booms and busts.

What websites/agencies can you suggest? We are looking at filling the role of Sales and Marketing Manager. The person must have experience in new homes, or a good understanding of new home marketing AND a great resume in a different industry.

I know that here that the some sites like kijiji have proved to be more effective than big websites or head hunters. Can anyone lead me to a similar site or a really good agency?

I asked the family I have but they are of no help. Any suggestions would be appreciated. I doubt it will be easy to find someone who wants to move, but the local market is hot and has been steady for a while (as oil goes up, it drives the industry more). I think that it is a good opportunity for the right person.

Thanks in advance.