Recently a friend of mine asked me if it was better to use a Real Estate Attorney instead of a Real Estate Agent. What came to mind was an interesting transaction that I handled back in 2007. If you enjoy Real Estate stories and details, read on, if not, skip down a couple of paragraphs.

It was a pretty unusual situation. The occupant of the home no longer owned the home as it had been foreclosed upon. The bank sold the home (sight unseen, and uninspected) to 2 cash investors. The investors were trying to evict the occupant so that they could take over the home that they now owned, fix it up and re-sell it. The occupant was a terminally ill man who happened to have a wealthy friend that owed him a favour (and who was part of an institution). The wealthy friend agreed to purchase the home back from the investors for cash. This is the point at which I was brought into the transaction. We had 14 days to close the deal before the investors would throw the occupant (and his 7 exotic birds) out onto the street. The investors knew that the occupant was in a very bad place, and they took advantage of the situation by demanding a price of $300,000 OVER what they paid at the auction. But that is another story… Anyways, one of the investors was a newly licensed Real Estate Agent (His mother had been a veteran in the business). He was also an attorney.

We agreed to meet at my office in Beverly Hills. I arrive and the investor produces a hand written contract that he wants my client to sign. I explain to him that we have existing “boiler-plate” forms that have been carefully created (and updated) by the California Association of Realtors (CAR). Besides the fact that as the buyer, we can produce our own Purchase Agreement. The investor (who was admittedly suffering from anger management issues) went through the roof. He had a little tantrum and insisted that we do things his way and that he had spent days crafting this document. After he wore himself out, I provided him with the correct document and explained that I would be handling the rest of the paperwork going forward. He left in a huff. As an aside, later that day I received a bouquet of beautiful flowers along with an apology note from him. Ha.

On the buyer other side of the transaction, an attorney was brought in to represent the institution that was buying the property (along with myself as their agent). Long story short, the institution went over the agreed upon contracts and vetted the deal. In the end the use of attorneys caused many hours of extra work, including meetings, conference calls, and the need to explain documents multiple times. The use of attorneys cost the buyer an extra $10,000 in fees. None of the issues/concerns that the attorneys brought up were justified and at the end of the day, we closed in 13 days. I worked around the clock as the buyer from the institution lived overseas, and I had to work on her schedule.

In my opinion, attorneys are hired to work out scenarios and “what ifs”. In a situation where there is an organized process everything gets worked out naturally, provided that you have a qualified and professional Real Estate agent working for you. Lastly, we Realtors only deal in buying and selling property. It is our specialty. If you hire an attorney to do the job of an agent, it is overkill and more unnecessary work will have get done. I have seen a few deals implode with the use of an attorney in place of a Real Estate Agent. The attorney attempts to reinvent the wheel, although the wheel is already in place and working well. Most Real Estate attorneys that I have come across are not actually familiar with the ins and outs of the residential buy and sell process. They specialize in practicing Real Estate Law and are usually litigators. The approach that I have seen is that they typically come at the other side of the transaction in a combative manner, causing the other side to have to take a defensive position. In my opinion, buying and selling of property should be approached in a manner where both sides work together to achieve a result that is satisfactory to all. There is definitely a time an place for the use of Real Estate attorneys, such as when a dispute arises, or when you need to evict a tenant. If you are going to buy or sell, your first stop should definitely be to speak with a licensed Real Estate Agent.

  

About 17 days ago I placed my client’s listing on the market.  Within less than 24 hours, I had shown the property to 10 buyers and before the end of that first day on the market, I had an offer that exceeded full price.   The property was listed as $729,000 and was a 948 sq ft 2 bedroom home in the West LA area, just west of the trendy restaurants on Sawtelle blvd, and a few minutes from the new Trader Joe’s and Bed Bath and Beyond.  The property happened to be zoned R-2, which means that you could legally build a second unit on the property without having to apply for a zoning change with the city.  A few days later I held the first open house and had about 75 people come through the property.  Two days after that, I had our first Broker’s open.  By the end of that day, we had 10 offers in hand, and more were coming in.  Several of the offers were cash, and all but one exceeded the asking price.  The seller had a tough decision to make.  While we were negotiating with the highest of the offers, 7 more offers came in.  We now had a total of 17 offers for this house.
As you can imagine, the buyers were whipped into quite a frenzy and each offer was better than the next.  People were offering ALL CASH and no contingencies.  This means that they did not even care about the condition of the home, i.e. they would waive an inspection and any other standard investigations.
So, why am I sharing this story with you?  If you are a seller and were wondering if the market is still hot, wonder no more.  It is!  This property is in escrow now for more than $100,000 over the asking price and will be closing in less than a week.  All told, from list to close, the seller will have his $$ in hand in well under 1 month.  If you are considering selling, but have a longer timeline, fear not, in a seller’s market, YOU are in the driver’s seat! I can negotiate whatever suits your specific situation.  Give me a call and we can set up a time to talk.  Revi Mendelsohn 310-963-7384

  

Financial update through the week of August 9, 2013

The summer doldrums have hit the stock market as the Dow finally broke its longest weekly winning streak since last August. This was a week without a lot of economic data and very low volume giving traders little to react to.  The Dow ended the week at 15,425.51 down 1.49% from last week’s close of 15,658.36. The Nasdaq closed out at 3660.11, off .8% from last week’s close of 3,689.59. Even the S&P 500 was down, ending the week at 1,691.42, a drop of 1.07% from last week’s finish of at 1,709.67.  It should be noted the markets are up almost 20% for the year!

 

Once again, concern over the Fed’s taper of the bond-buying program was responsible for much of the downturn. Richard Fisher, president of the Federal Reserve Bank of Dallas, stated on Thursday that he believed that cutting back on the stimulus program could begin as early as next month  as long as economic data continues to improve.

 

Data released this week showed that U.S. wholesale inventories fell .2%  in June even though a gain of .4% had been expected. This was the second month of wholesale inventory declines.  Lower inventories can lead to higher prices, so this is a statistic that is looked at to forecast inflation risks.

 

The yield on the 10-year treasury note also slipped this week ending at 2.57% down from last week’s 2.63%. The rate was around 1.63% one year ago. The 10 year treasury note directly affects home mortgage rates.

 

This week the President spoke in Arizona addressing the issue of the housing bubble in 2007 and calling for mortgage reform. His proposal in part involves greatly diminishing the roles of Fannie Mae and Freddie Mac, the industry giants which own or guarantee over half of all home loans currently. There is a bipartisan bill in the Senate calling for a winding down of the two organizations. The Obama administration has indicated a desire to replace Fannie and Freddie with a system that allows the private market to buy home loans from lenders and then repackage them as securities for investors. The government would still be involved because it would insure or guarantee those securities at a cost to investors. Obama called for private capital to take a larger role in the mortgage market and also asked Congress to push through legislation to make it easier for homeowners to refinance at lower rates. As part of his focus on housing this week, he hosted a chat with online real estate syndicator Zillow and took questions via Twitter.

 

CoreLogic released a report showing that the Los Angeles metropolitan area topped the country in single-family home price gains among the 100 largest cities in June showing a 20.7% increase from a year ago. Home prices in California overall appreciated the second-highest in the country, up 21.4% behind only Nevada. 

 

This week’s interest rates showed a slight increase. The Freddie Mac Weekly Primary Mortgage Market Survey showed a 30-year fixed rate at 4.40% up from last week’s 4.39% while the 15-year fixed held steady 3.39%.   This time last year the survey showed a 30-year fixed rate of 3.59% and a 15-year fixed rate of 2.84%. With the treasury bond rates dropping the last two days rates today are slightly lower.

 

Although we have seen some seasonal slowing the real estate market is still very active. Prices are still rising, but it seems like they are not rising as sharply as they were in the last few months. Inventory levels are still at all time lows, but are higher than they were in May, June and July. Fortunately, I am part of a company that is taking a much higher number of listings propionate to the number of agents at other local brokerages.  At the same time our buyer controlled sales are also much higher per agent than our competitors.  If you want to know more, feel free to reach out to me at 310-963-7384 or [email protected] .  Revi

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Growing up in Toronto, we took the subway downtown almost every Saturday.  Imagine the freedom of being a teenager and being able to get to places without a car or without having a drivers license.  Imagine being a parent and not having to drive your teen around town.  Sounds pretty good, eh?

Fast Forward 30 years and here I am in LA.  A place that has inspired a song called “Walking in LA”. A song that is about how nobody walks in LA.  Why does everyone drive?  Well, it could have something to do with our lack of easy public transit.  Until now!  Have you heard of the new light rail that will cross the city from downtown and make it all the way to the beach?  It is a reality folks…the day will come (very soon)  where you can board a train in Downtown LA (and points in between) and make it to the beach without setting foot in your car.  Currently, you can get from Downtown to Culver City.

I have a prediction about how this light rail system will affect real estate in the surrounding areas.  For those that know me, I rarely (if ever) make Real Estate Market predictions.  How can I possibly know if the market will go up or down next year?  Well, without a crystal ball, the truth is that no one can make those predictions with any level of accuracy.  I can however give you very accurate info on today’s market place and what I think will happen to a certain area of town over the next 5-7 years.  Why am I willing to do something I rarely do?  Because I believe in the light rail.  I believe in public transit.  I believe that a system like the one being built will greatly affect Real Estate development in the coming years.

On my last visit to Toronto, I noticed a few things when talking to my old friends.  People are worried about the environment and their expenses.  They are making changes within their families to minimize their affect on the aforementioned.  People have one car families now.  Not everyone, but some.  Families are getting by with one car because they live in a city where you can get almost ANYWHERE using the subway and bus system.  Mark my words, I believe that in 10 years time, the people of LA will realize and appreciate the value of a public transit system that works.  Property values will reflect that realization and LA real estate developments will be like nothing you have seen.  If you don’t believe me, look up the city of Toronto and see what has been going on over there in the past 15 years.

So, now to the title of my blog….if you want to discuss investment opportunities and how they tie in to the Metro Light Rail, give me a call and let’s start investing in your future and in the future of Los Angeles!

Revi Mendelsohn, Realtor
Rodeo Realty Beverly Hills
310-963-7384 (cell/txt)
[email protected]
www.ReviMendelsohn.com

  

About 3 weeks ago, a dear client and friend of mine texted me early one morning to let me know that they were thinking of moving out of state and selling their home.
Here is the backstory; In 2010, we searched high and low until we found their perfect home.  It was a well preserved “1950’s special”.  You know those houses that only had one owner since it had been built? Well this one had been owned by the Langer Family (Of Langer Deli fame).  This was the home that they had started and raised their family in, and it had the orange shag carpet to prove it.  With some finesse, a high offer price and a lovely letter, (not to mention some roundabout connections that I discovered), we were chosen as the successful bidders.

My clients spent months and several hundred thousand dollars lovingly planning out a gorgeous remodel.  The took out the false ceiling in the living room to create a vaulted ceiling.  They turned the kitchen into a ‘KITCHEN” with a 10 ft island to name just a new of the upgrades they made….I could go on and on.

Ok, so now back to March 2013….
Our first step was to bring in a stager (although there was not much for her to do as the house was already quite perfect).  We did need some advice on furniture placement in a couple of rooms though.  I hired my stager to come in and do a consult with my client.  The next step was to get some repairs done in the home.  There were some scuffs and dings that needed to be taken care of.  The yard needed some colour.  I went to the store to buy some flowers and plants.  I stopped by another store to pick up some cushions and other decorative items.  We are now just 4 days into the process and the ball is rolling pretty quickly.  My client is motivated and full of energy.  She got more things done in 4 days than I have seen sellers do in 4 weeks.  How did I get so lucky?

Through our conversations, my clients tell me that they would prefer not to hold their house open as they do not want hundreds of strangers to come through their home.  Also, they have cats and it would be too risky to have the doors opened several times, as we would likely lose a cat or two.  As a Realtor, I know that the only way to get the best possible price for a property is to expose it to the largest number of people.  It seems I was not that lucky after all…my hands were tied…..What would I do?  My clients did not feel that getting top dollar was their priority.  Selling their house quickly and to a nice family was! (I can tell you that I have never come across a seller like this in my career…especially in a seller’s market!  Looks like Karma still exists in the world!)  I assessed the value of the property, the sellers came up with a number that would work for them and I did what I was told to do….Sell the house for the price they wanted and show it to the least amount of people…or only do private one on one showings…no open houses.

We also decided that we would proceed with preparing the house to be put on the open market after spring break was over (Just in case Plan A did not go through, we would have the house ready for Plan B–open houses).

I contacted a friend of mine that had been looking for a house in the area.  I showed her the house.

I am pleased to report that from the morning that I received the text from my clients letting me know that they wanted to sell, to finding the buyer for her house, less than 7 days elapsed.  No open houses, only one couple visited the house, and they bought it!

My clients have already submitted an offer on a house in their new state (Thanks to the wonderful agent I was able to refer them to), and we are working together to get both escrows closed concurrently.    Now that is a happy ending!

Who wants to be next?