Archive for the ‘Uncategorized’ Category
Reasons to Sell a Rental as a Vacant Home
The Likely Buyer for Most Rentals is a First-Time Home Buyer
By Elizabeth Weintraub, About.com Guide
Drawbacks to Selling a Rental With a Tenant
Unless the new buyer is likely to be another investor, selling a rental home that is occupied by a tenant might cost the seller more than selling it as a vacant rental. That’s because tenants often do not want to cooperate with showings, especially since there’s little in it for them.
•Tenants might sabotage the sale.
Not every investor and tenant get along. Sometimes, a tenant resents the investor simply because the investor owns the home and the tenant is a renter. But there are other reasons why a tenant might sabotage the sale of rental:
1.Notwithstanding a lease, when the home sells, the tenant might be forced to move out.
2.A tenant might carry a grudge because maybe a repair wasn’t promptly fixed in the past.
3.There may have been a dispute involving a late rental payment.
Whatever the reason, the person speaking with potential buyers is often the tenant. A tenant who harbors ill feelings toward the investor may lead a buyer to believe that buying the rental is a bad idea based on the way the tenant presents the home. Such a tenant will not hesitate to purposely point out defects or, worse, make up problems that do not exist.
•Buyer’s agents often pass on “By Appointment Only.”
If a buyer’s agent has a plethora of inventory to show a prospective home buyer, that agent might be very selective when choosing homes to show. Say 10 homes are easy to show and one home requires a 24-hour notice, the agent might not show the “By Appointment Only” home. Tenants sometimes feel that they do not need to return an agent’s phone call, so even if the agent does call for an appointment, the tenant might not call back.
•Tenants might not allow a lockbox.
Without a lockbox, a buyer’s agent is restricted from access. This means the tenant must be home to let the agent and buyer inside. If the tenant works during the day, it means the home can only be shown on the weekends or in the evening, which limits the number of buyers who can see the home. Moreover, sometimes a tenant will make an appointment and conveniently forget about the appointment, leaving the agent to stand on the doorstep and repeatedly ring a doorbell that nobody answers.
•Condition of rental home untidy.
I’m not insinuating that all tenants keep messy homes, but they have little incentive to keep the home in perfect showing condition 24 hours a day. They might not think twice about leaving beds unmade, clothing on the floor or dishes in the sink. If the rental home is not spotless, the condition may turnoff a potential buyer.
•Tenants may refuse to leave during the showing.
Buyers feel extremely uncomfortable when a seller or tenant is present during a showing. They feel as though they cannot freely speak nor address any concerns about the home in the presence of an outsider. This means they generally rush through the home and may miss or overlook qualities in the home that if noticed would otherwise make them want to buy it.
The bottom line is buyers need to envision themselves living in the home, and that’s almost impossible to convey if the tenants are still in possession.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.
Before You Buy a Short Sale
By Elizabeth Weintraub, About.com Guide
Many of my Sacramento home buyers have waited 4 to 6 months to close on a short sale, sometimes longer.
What is a Short Sale?
A short sale means the seller’s lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.Be aware that the seller need not be in default — to have stopped making mortgage payments — before a lender will consider a short sale. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.
Check the Public Records
Do your research before making an offer to purchase. Your agent can find out who is in title, whether a foreclosure notice has been filed and how much is owed to the lender(s). This is important because it will help you to determine how much to offer.If there are two loans, you could have a problem. The first mortgage lender’s position is protected by the second lender, unless the second lender does not want to foreclose. If a seller owes $160,000 on the first and $40,000 on the second, offering $160,000 leaves nothing for the second. The first will need to give something to the second to gain its cooperation.
Hire an Agent with Short Sale Experience
It’s one strike against you if the listing agent has never handled a short sale, but it’s even worse if your own agent has no experience in that arena. You need an experienced short sale agent.An agent with experience in short sales will help to expedite your transaction and protect your interests. You don’t want to miss any important detail due to inexperience or find out your transaction is not going to close on time because no one has followed up in a timely manner.
Qualifying the Property and Seller for a Short Sale
A lender is unlikely to agree to a short sale unless the seller has no equity and is unable to repay the difference between your sales price and the existing loans. Sellers need to provide a hardship letter to the lender. Sellers may also owe taxes on the amount of debt that is forgiven.A seller I know once demanded that the buyer slip the seller $1,000 to be given the right to purchase the seller’s property. We said no. This is fraud. The lender legally pursued that seller. Do not be lured by sellers who suggest this practice. In a short sale, the seller receives no money because the lender is losing money.
Submit Documentation and Purchase Offer to Lender
Once the seller has accepted your offer, send it to the lender for approval. You do not have a deal until the lender accepts. Also, send the lender a copy of your earnest money deposit. Do not be astonished if the lender asks you to increase it.In addition, the lender will want to see that you have your own loan available and you are preapproved. Send a preapproval letter to the lender. It will help if your agent sends a list of comparable sales that support the price you are offering to pay for the home.
Give the Short Sale Lender Time to Respond
Make your offer contingent upon the lender’s acceptance. Give the lender a time frame in which to respond, after which, you will be free to cancel.Some lenders submit short sales to committee, but most can make a decision within two to three months. Get a name and phone number for the appropriate contact at the lender. Don’t send an offer blindly to a department.
Understand Short Sale Commissions
Regardless of the commission the seller has agreed to pay, the lender is actually the entity paying the commission. The reason is the seller is not receiving any money with which to pay a commission. Since the lender is losing money, the lender will likely negotiate the commission directly with the listing broker, who will then share the commission with your agent.If you have signed a buyer’s broker agreement with your agent, ask if the agent will waive the difference due or you might have to pay it out of your pocket. Some brokers feel it is unfair to penalize the agent, but the lender is calling the shots.
Reserve the Right to Conduct Inspections
Generally, the lender will not pay for customary items that a seller would pay. These include home protection plans for the buyer, buyer credits of any kind and pest / termite inspections. A buyer will be asked to purchase the property “as is,” which means no repairs.It is extremely important that a buyer obtain a home inspection. Back to How to Handle Short Sales
Alicia Keys’ Manhattan penthouse is all style and glass.
Alicia Keys is moving on from her gorgeous Manhattan apartment, Frank Sinatra’s former home is for sale, and the former rental home of Tom Cruise and Katie Holmes as well as Russell Crowe is available for lease.
Forget about moving on up. Singer and New York native Alicia Keys did that a long time ago, trading her childhood residence at the artist-friendly Manhattan Plaza apartment complex in Hell’s Kitchen for a slick SoHo real estate market triplex.
Now Keys and her producer husband Swizz Beatz have listed their Crosby Street penthouse for $17.95 million only two years after the couple bought the place from funk/soul/rocker Lenny Kravitz for $12.5 million.
The dining room features immense skylights and chandeliers.
According to Sotheby’s International, which holds the listing, the apartment boasts five bedrooms, four bathrooms, four powder rooms and an enormous state-of-the-art, windowed, gourmet eat-in kitchen with walk-in butler’s pantry. And separate formal dining room that faces east encased in a glass solarium.
That’s only the start of the grand tour of a pad once rented by Nicole Kidman and Denzel Washington. The place also has an expansive living room with fireplace and library/media room that are all surrounded by undoubtedly one of the most beautiful private terraces in all of SoHo. Upstairs, there’s a separate private master suite complete with spa, pass-through dressing area and private terrace.
Read more about Alicia Keys’ penthouse.
When Paramount Pictures chairman and CEO Brad Grey bought Frank Sinatra’s former Los Angeles home in November 2010 for $18.5 million, the famous Hollywood producer had big plans to restore and renovate the brick ranch that sits on a parklike 2.3 acres.
Turns out that, in the end, the Sinatra house that inspired Grey’s dreams was merely a nice set for Grey’s wedding in April 2011 to his new wife, Cassandra. The wedding was called lavish, and attended by the likes of Tom Cruise, Brad Pitt and Jennifer Lopez. The couple has since moved to Bel Air, making Grey’s ownership stint a lot like Sinatra’s.
“My client still owns (the Sinatra house) but I sold him another property. He didn’t want to go through the process of renovating the house,” said Stephen Shapiro, who holds the listing at Westside Estate Agency.
The property has been back on the market since September, when Grey listed the Holmby Hills residence for $23.5 million. After a price drop on March 15, the former Sinatra home at 320 N. Carolwood Drive was re-listed for its current list price of $19,995,000.
According to the Sinatra biography “The Voice,” by James Kaplan, Sinatra bought the house in 1948 for $250,000 at a time when his career was at a low ebb. Sinatra had built a dream home in Palm Springs, and was strapped for cash and on the verge of divorce.
What do Tom Cruise, Katie Holmes and Russell Crowe have in common?
Besides star status and high-paying movie roles, all three have at some point, for at least a little while, called 918 N. Alpine Drive home in Los Angeles.
The Tudor-style home was rented by Katie Holmes and Tom Cruise for $55,000 a month and then leased by Russell Crowe while he filmed “State of Play.”
In 2001, the nearly three-acre estate was also the filming location for several scenes in the movie “Blow” starring Johnny Depp and Penelope Cruz.
And for someone with a celebrity-sized housing budget, the home is available again — this time for a whopping monthly rental price of $100,000.
Available as a short or long-term lease, the Beverly Hills rental is set back from the street — perfect for privacy-seeking celebrity tenants. With almost three acres of landscaped property, 6,685 square feet of living space and three separate guest apartments, the estate also has enough room for the star with the biggest entourage of stylists, security personnel and various and sundry assistants.
Beyoncé swam here: NYC home rents for $100,000 a month
In New York City, 214 Lafayette St. is a five-story mansion that can be rented by the rich.
When 214 Lafayette Street in New York City’s SoHo district recently went on the rental market, it raised many eyebrows. Not just because it’s an unparalleled five-story mansion in a city notoriously short on living space or because it has a private indoor swimming pool. It’s the rent: $100,000 per month.
Botox-free foreheads everywhere should prepare to give those eyebrows another workout, because 214 Lafayette Street is already rented for at least two months this summer.
Bathrooms: 3 full, 1 partial
Square footage: 13,000
In addition to the pool, the property has a nearly 1,000-square-foot terrace with a Zen garden. The guest room on the ground floor features a porthole window to the middle of the pool, lending it the feel of an underwater room, according to Steve Halpern, a broker for the apartment with Citi Habitats. A dumbwaiter goes up to the terrace and the home’s main living room. Outside the master suite, a master sitting area overlooks the main space.
The building was one of New York’s original Con Edison power stations, Halpern said. Back then, it was “turbines floor to ceiling — and they still have the original barrel vaulted ceilings.”
In the 1950s and ‘60s, it was a factory and later a gallery space. The current owners are Marcus Nispel, director of such remakes as “Friday the 13th” and “Conan the Barbarian,” and his family, who purchased the building in 1996. It took 10 to 12 years to renovate, including taking out one of the floors, so the main living room is now double height, Halpern said.
The space has also made cameos in pop culture. The video for Beyoncé’s 2008 song “Halo” was shot there, including a segment where she’s swimming in the pool in a white gown. John Mayer also shot a video there.
The mansion is already rented for June and July, and possibly for August. Who is the demographic for a $100K rental home? Halpern notes he has shown the space to a 24-year-old billionaire and to some celebrities.
Why would renters consider paying this much? Gary Malin, president of Citi Habitats, gives the oft triple-cited reason: Location, location, location. Other aspects that might tempt the wealthy to spend $100K each month, he says, are its rare combination of amenities, like the indoor pool and private roof deck. He adds that it requires no board approval and offers the utmost in privacy, since it is a single-family dwelling.
“Two Fourteen Lafayette appeals to celebrities, wealthy international businesspeople and others with disposable income that plan to be in New York for a relatively short amount of time,” said Malin. “Most likely, they are already homeowners somewhere else.”
What is the appeal of such a high-end rental? “In some circumstances, it makes a lot of sense,” Malin said. “Those who chose to rent do not have to sacrifice anything in order to live the lifestyle of their dreams.”
“For those who only plan to stay in a property for a few years, renting is definitely the way to go. It’s a more affordable option. If you plan to be in N.Y.C. for two or three years, why buy a $20 million property and worry about the maintenance — plus the prospect of having to sell the home in a down real estate market? Renting is, for the most part, short term and worry free. It’s like dating your home, instead of marrying it.”
Spectacular Irish hotel, massive discount price
No Blarney. The $6 million Sandhouse Hotel located in Donegal, Ireland, was purchased for $860,000.
It’s as much as a small, two-bedroom apartment might cost on Manhattan’s Upper East Side. But in Ireland, Paul Diver has purchased a spectacular 55 bedroom hotel overlooking the Donegal coastline for a mere $860,000, down from the $6 million price the original owners sought for the Sandhouse Hotel three years ago.
Diver, who managed the Sandhouse Hotel in Rosnowlagh for 20 years, was delighted to secure the 50 staff members their jobs. He told msnbc.com on Friday that he had been willing to go “a bit higher” when the hotel was auctioned this week in Dublin, but was delighted when his reserve-price bid was accepted by the auctioneers.
Sandhouse Hotel in Donegal, Ireland.
The 50-year-old hotel went into liquidation in 2009 after the previous owners failed to sell it during the dramatic skid in the country’s economy.
Overall, Irish real estate prices have crashed since 2007-08, when the so-called “Celtic Tiger” economy collapsed. Home values have fallen more than 60 percent below their peak five years ago, and commercial properties have suffered similar declines.
For Diver, it was an opportunity he couldn’t turn down.
“It’s just a total adrenalin rush; I can’t believe it. It’s been a long, long road but we have made it,” he told the Irish Independent newspaper.
Diver hopes the fantastic location off the Rosnowlagh beach will remain a lure for visitors from home and abroad. He noted the beach has hosted the European Surfing Championship a few times over the past 15 years and boasts “fantastic waves.”
Listing of the Week: This rotating dome home spins right ’round
The dome home rotates to take advantage of the sun’s energy.
By Erika Riggs, Zillow
116 Canaan Rd, New Paltz NY
For sale: $1,200,000
Normally, when someone asks for the remote, it’s because they want to undertake some serious TV channel surfing. But in one unique home located just 90 minutes north of New York City, playing with the remote control will set the entire wooden house spinning on its axis.
This dome home was, in fact, built on an electronically-controlled axle. So with a push of a button, the 3,000-square-foot New Paltz home for sale can rotate 360 degrees. In five orbital minutes, the house completes one full rotation.
The owners of this circular domicile aren’t constantly on the spin cycle. The feature is used to take advantage of the sun for the home’s solar energy needs. Each season, the home is rotated for maximum efficiency, explained listing agent Anne Rajs.
“It does look like a space ship,” said Rajs, “But it’s an amazing home. It’s the coolest home I’ve ever seen.”
The two-story home features 40-foot ceilings centered by the axle. Tall, wedge-shaped windows keep the interiors light-filled and open. The home features bamboo flooring and custom wood and stone cabinetry. The first floor contains two bedrooms and the majority of the living space. A central spiral staircase leads to the second floor which holds the master suite, office and additional balcony space.
Although one of the home’s main appeals is its unique design, Rajs believes that the home’s location is a big sell as well.
“It’s this beauty of a house in the middle of 28 acres,” Rajs said. “And you can walk to the Mohonk Preserve which has 1,000 acres more of hiking and rock climbing.”
The home has also been featured on the Discovery Channel and a video of the interiors, as well as the home rotating, is on YouTube.
The axel stretches to the home’s ceiling.
The home has several tall arching windows to take advantage of the natural light.
Data add to signs of a nascent recovery in sector, but many hurdles remain
John Raoux / AP
WASHINGTON — New U.S. single-family home sales rose to a seven-month high in November and the months’ supply of houses on the market was the lowest in 5-1/2 years, adding to signs of a budding recovery in the sector.
The Commerce Department said on Friday sales rose 1.6 percent to a seasonally adjusted annual rate of 315,000 units. Octobers’ sales pace was revised up to 310,000 units from the previously reported 307,000 units.
Economists polled by Reuters had forecast sales at a 313,000-unit rate. In the 12 months through November, new home sales were up 9.8 percent.
Coming on the heels of data this week showing a rise in sales of previously owned homes and surge in housing starts, the report implied a recovery was starting to take shape in the housing market.
Housing improves, but foreclosures spoil the partyBut there’s a long way to go for housing, which has been in a deep hole for the past few years. Friday’s sales rate was less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market.
It’s also below the 323,000 homes sold last year — the worst year for sales on records dating back to 1963.
The housing market, which triggered the 2007-09 recession, remains constrained by an oversupply of unsold homes, falling prices and high unemployment.
Oops. Housing crash deeper than we thoughtSales were up in two of the four regions, with the number of homes sold in the Midwest the highest since November 2009.
The median sales price for a new home fell 3.8 percent to $214,100 last month. Compared to November last year, the median price was down 2.5 percent.
There were a record low 158,000 new homes on the market last month, and at November’s sales pace, it will take six months to clear them — the shortest amount of time since March 2006. That compared to 6.2 months in October.
A six-month supply is generally considered ideal, with higher readings indicating steep price declines.
Reuters and The Associated Press contributed to this report.
Housing starts surge to a 1-1/2 year high
Builders frame a new home in Queen Creek, Ariz.
By msnbc.com news services
Housing starts surged to a 1-1/2 year high in November and permits for future construction were the highest since March 2010 as demand for rental apartments rose, offering hope for the weak housing market.
The Commerce Department said on Tuesday housing starts jumped 9.3 percent to a seasonally adjusted annual rate of 685,000 units, the highest since April last year.
October’s starts were revised down to a 627,000-unit pace from a previously reported 628,000 unit rate.
Economists polled by Reuters had forecast housing starts rising to a 635,000-unit rate. Compared to November last year, residential construction was up 24.3 percent.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
Over the past year, apartment permits have surged roughly 63 percent. Single-family permits have increased just 6.6 percent in that time.
Earlier, Oliver Chang, Morgan Stanley’s head of U.S. housing strategy, appeared on CNBC to discuss the outlook for the housing market:
Home construction and sales are in the midst of one of its worst years ever. Demand for new homes is weak. Record-low mortgage rates and plunging home prices have done little to help.
Builders are struggling to compete with deeply discounted foreclosures and short sales. Short sales occur when lenders allow homes to be sold for less than what’s owed on the mortgage. Few homes are selling.
After previous recessions, housing accounted for at least 15 percent of U.S. economic growth. Since the recession officially ended in June 2009, it has contributed just 4 percent.
In October, sales of new homes rose slightly, largely because builders cut their prices in the face of weak demand.
Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their houses.
Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a resale. That’s nearly twice the markup typical in a healthy housing market.
The homebuilders’ trade group said this week that its survey of industry sentiment rose in December to 21, the highest level since May 2010. Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.
The American Attitudes About Homeownership survey found that in today’s challenging economy, 95 percent of owners and 72 percent of renters believe that over a period of several years, it makes more sense to own a home. In addition, an overwhelming majority of home owners are happy with their decision to own a home – 93 percent of owners surveyed would buy again.
“Home owners and renters agree that home ownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy,” said National Association of Realtors® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The results of this survey illustrate just how important issues related to home ownership are to people in this country.”
The survey uncovered some differences between home owners and renters, as well. While more than half of owners are “very” or “extremely” satisfied with the overall quality of their family life, only one-third of renters report the same levels of satisfaction. Similarly, 43 percent of home owners are very/extremely satisfied with their community life, compared with 30 percent of renters.
A majority of renters – 63 percent – said that it was at least somewhat likely that they would purchase a home at some point in the future. Among this group, young adults (18-29 years old) have the strongest aspirations for home ownership; only 8 percent of young adults said that it was “not at all likely” that they would purchase a home at some point in the future.
In today’s market, many aspiring home owners are faced with worries about job security and creditworthiness. Among renters who are very or extremely likely to buy a home in the future, three out of five consider confidence in job security and creditworthiness to be an obstacle.
One point of agreement between renters and home owners was support of the mortgage interest deduction (MID). Seventy-four percent of owners and 62 percent of renters say it’s “extremely” or “very” important that the MID remain in place.
“At a time when the middle class is under increasing economic pressures, both home owners and renters agree that the mortgage interest deduction should not be targeted for change,” said Phipps. “Given strong public support of and aspirations toward owning a home, we need to keep policies in place that support and encourage responsible, sustainable home ownership for our future.”
Nation’s most expensive bank-owned home sells for $35 million
Exterior of the St. Regis in San Francisco shows two-story bank-owned penthouse that has reportedly sold for $35 million.
Homeowners usually dread having foreclosures in their neighborhoods because it tends to put a drag on the value of surrounding properties, but they might not mind living next to 188 Minna St., in San Francisco.
Among the nearly 4 million homes owned by banks today, according to Barclays Capital, this one stands out. For one thing, there’s the waterfall in the foyer. And the 2,500-square-foot master bedroom with a hallway just for closets. And the 22-foot glass walls that look out on San Francisco’s Arts District. And the fact that this penthouse condo is the most expensive bank-owned residence in the country.
Foreclosure website RealtyTrac says the average foreclosed home sells for $182,489.
According to San Francisco real estate blog SocketSite.com, lender Bank of America, which picked up the deed to the 20,000-square-foot penthouse in lieu of foreclosure back in July, just sold the condo, which was listed at $35 million, which would make it the most expensive residential sale in the city’s history.
Still, the price is half of what the original owner, developer Victor MacFarlane, was seeking for the unit back in 2008, although he did slash the price to $49 million the following year.
Perched atop the St. Regis luxury residential tower, this six-bedroom, seven-bath (plus four half-baths) palace is practically a private hotel: There’s a full gym with a sauna and steam room, 13-seat movie theater, 2,900 square feet of terrace space and parking for six cars.
Here is an interior shot from the listing at Sotheby’s International Realty:
There are no details on the buyer yet, but here’s one parting thought: If the real estate agents involved earned a standard 6 percent commission on this deal, they’ll pocket $2.1 million.