Daily Archives: August 19, 2007

The Jaguar Just Sol, Long Beach

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No, not the latest news about Ford selling Jaguar back. I think I heard they had sold them but I can’t find any real news about that. Maybe they are still in talks.

However, my friend’s 1999 XJ8 Sedan did sell. I helped facilitate the transaction by finding the buyer, doing the paperwork and giving the car to the new owner. What was interesting in this transaction was the incredible price the car went for in the end. Priced at $12,500 according to the Kelly’s Blue Book, it only sold for $8,500.

There are two things here. First, the Blue Book is always optimistic, even though many people set their guidelines with it. Much like real estate, you want to sell at that price but buy lower. In the end, it makes it tough for everyone. Second, Jaguar sell to Jaguar enthusiasts. And this is where I knew I was heading when I took on this car. I knew I would have to find someone who knew Jaguars and loved them. And I did. The lady who bought it loves Jaguars, has always driven Jaguar, doesn’t like the new shape of Jaguars, etc. I agree with her. They are nice cars and should go for much more than that low price.

So what is the problem? I feel it is in perceptions. People think of them as finicky cars. I never heard of much problems with this one, save for normal maintenance. It is reliable and a great experience to drive. In fact, hadn’t I been so much into Italians, I would have bought it, even at $12,500. It was that worth it and of course, this one was in a great condition.

Jag_front

Now, there is another one coming up…

Foreclosures and Short Sales, Long Beach

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We have all heard about foreclosures but what we heard less, at least in mainstream media are short sales.

What are short sales? Short sales are what some owners ask their banks to agree to when they can’t make the payments anymore before they are forced into a foreclosure. In a nutshell, it is selling the house at market price, usually less than the original loan and the bank eats the difference. BUT wait, there is one very important point many people never think about. What ever discount your banker gives you, the IRA will see as income, even though you have already spent it.

Let me explain very easily. You bought a home for $950,000. You cannot make the payments anymore so you ask your bank if you can try selling your home at a lower price. Basically, you are asking them if they will forget the loss. Say you home sells for $850,000. Basically the bank wiped $100,000 of your debt. But guess how the IRA sees that same $100,000? Yes, as income. So don’t think you are Scott free. You will get taxed on that $100,000 as income.

Why would a bank accept a short sale and avoid a foreclosure? Because they still chance a better deal through a short sale. A short sale should be, at least in theory, market value. Foreclosure is an auction.

So back to short sales. It seems to frighten a lot of agents these days. It might be more work than a regular sale but after all, what are we? Mice? No, says I, we are hard working professionals ready to help you. Well, at least, I am.

I highly recommend Calculated Risk’s Tanta’s post. It links to two other posts, one on mortgage servicing here, the other on Foreclosures.

Existing Homes Sales Market Strong Despite All Odds, Long Beach

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And this is where we are all stumped. How can this market show strong prices in a glut of inventory and houses that seem to go for less? Doesn’t this seem to go smack against any economics 101?

Seeking Alpha had a good article given us numbers and reports on how home sales are beating expectations. Maybe I should review those expectation They sure aren’t beating mine.

Now of course, one must be very, very careful when viewing data. Some surveys include certain types of homes, others don’t. On top if this, this is a NAR survey which has historically been always optimistic about the market. After all, they represent us professionals who don’t want to face a crumbling market, right? Wrong. Give it to me like it is. I’m old enough to make my way through obstacles. Don’t sugar coat my reality. Hum, I am actually in a good mood…

So all things considered, as usual, we still live in the best place. Most people still want to live here and homes are still sought after. All in all, the market is correcting itself, to say it as diplomatically as possible. And Realtors are once again doing what they are supposed to do, look, search, negotiate, avoid pitfalls and try to make a living from it.