SYNRGYdesign

When we decided to buy a house again I was pretty sure I did not want another fixer.  We spent 8 years fixing up our old house and it seemed like there was always something to fix and not enough time to fix it.  We looked at a ton of homes this time around.  More then we probably looked at when we bought our first house.  The Internet is a great place to actually look at a house with out having to drive to it.  We spent a lot of time looking at homes on the Internet and also many weekends driving around, using up a lot of gas, and carrying sleeping kids through open houses in the different neighborhoods that we could see ourselves living in.  We saw the ultimate homes that were beyond our price range to the homes that needed to just be torn down and a new house built.  We saw empty lots and homes where the house should be removed completely to homes that where just remodeled and everything in between. There were definitely homes we had on our “watch” list and homes that we thought we should make an offer.  So a few people have asked me why did we decide on this house.  It was obviously a fixer.  It needs a lot of work - still does.  It is not in our ideal neighborhood that we were originally wanting to buy in but it was in the neighborhoods that we were looking at.  Did it have everything on our list of wants? No.  Our ideal home would have been in a cul de sac, preferably a two story and at least a 4 bedroom home.  Ironically this home is a one story that is the second house from the corner just like our fist house (we must like being the second house in for some reason).  It is only a 3 bedroom but it is a lot bigger then our 4 bedroom home in Cypress.  So why did I give in and agree to a fixer?  A lot of different reasons.  There was a house we could have put an offer in that was already done.  There was a house in a cul de sac that did not need as much work that had a separate office and it would have been great but they were asking too much.  This house is one of those homes that you have to look beyond the initial condition.  Yes, I probably would have liked to just move in to a place and not fix it up - who wouldn’t?  But after really looking at every possible place available I realized that we could get a home that someone already fixed up to their liking or we could get a fixer and make it our own.  I think that is why we are drawn to fixers.  As architect’s we like the idea of designing our own place even if we have to work with an existing foot print.  Cost had a big part in what we bought also.  We wanted to stretch our money as much as possible.  But I think it was the idea of being able to have a blank slate and design our own home.  It was the idea of being able to make it OUR home instead of moving into someone else’s home that sold the house to us.  Would I buy another fixer?  Probably.  Would I try my best to not buy a fixer? Probably.   

I wrote about the inspection we had on the house and things got really busy after that with the holidays and escrow closing so I did not get a chance to write about the escrow process.  We had a really short escrow for this house.  Both houses we have bought have had short escrows but this one we really pushed to be short because we were trying to take advantage of the time off we would have during the holidays to kick off the remodeling at the new house.  One thing we learned was that banks are really slooooow.  They take forever to respond to questions or requests.  It felt like pulling teeth trying to get them to respond back to things.  We we were pushing to close by December 29.  We did not close until January 2.  Our loan was lined up, we had everything ready.  The holidays slowed us down a bit because everything shut down and most people were not really into working the day before or after the holiday even though it was a work day.  We took possession of the house and the termite people still had all the rotten wood piled up in the back yard.  They did come back and clean it up.  People have asked me if I would buy a bank owned house again.  After some thought and discussion on the subject, I think we are both in agreement we would buy a bank owned house again.  Would we buy during the holidays again?  Maybe not.  There was a lot of stuff going on that added to the stress level.  But you can never tell when you will find that house you want to put a bid on.  The home buying process has definitely made it less emotional for me.  But I do not think we we were ever the type to fall in love with a certain house right off the bat.  We tried to go in to it as a business transaction and then after we had decided that we liked the bones and structure of the house and that it would fit in it, only then did we start picturing ourselves in the house.  Once we did that the emotions started coming in to play.  We were ready to walk away from this house right up to the last minute.  Not because we did not like it.  By then we were already emotionally involved in it.  We were ready to walk away because we were not getting any responses back from the banks.  In the end it turned out in our favor and we have been spending every waking minute fixing it up.

Since we had never bought a bank owned house before or REO as they are called, we really didn’t know what we were getting into when we purchased the house.  The experience was an eye opener and I think we can now write a book about buying a bank owned home.  That being said, there are a few things we definitely learned and will probably do differently the next time around (yes, I know I am saying the next time around even though I have been swearing this is the last time I am going to move - but I am not opposed to buying another house - I just do not want to move again).  REO’s are a great way to get a good deal if you can see beyond the mess that the house is probably in.  Everything everyone says about buying a house from a bank is true.  They are very slow.  They do not respond back as quickly.  You have to be willing to walk away if you do not get the things you want.  They (the banks) are treating it as a business transaction and so should you.  That is the biggest lesson I have learned from buying this house - actually from looking for homes this time around versus when we bought our first house almost 9 years ago.  When we bought our first house 9 years ago, we were both very young and the term property virgin was probably written on our foreheads so big that every realtor we saw when we went into open houses couldn’t miss it.  We did not know what we were looking at.  We had a price we could afford.  We sort of knew the areas we wanted but we did not think about things like schools or things like that.  We just wanted to get our feet wet and do some home remodeling.  We did not really look at the different neighborhoods.  We just went to open houses or drove by places we saw online.  We did not consider things like how many rooms or lot size.  We just walked into each house to see if we liked it and then walked out.  Fast forward 9 years and 2 kids and our home buying this time was completely different.  Our locations were narrowed down by what schools we wanted to have our kids go to.  We drove around  the neighborhoods endlessly to see what they were like during different times of the day, different days of the weeks, and during the holidays.  We wanted a kid friendly neighborhood so we looked to see who put up decorations during Halloween and Christmas.  We wanted a big lot - as much as we could afford - and a house big enough for the 4 of us.  Price drove the search just like it did 9 years ago but we had a lot more needs this time around that had to be met and we knew more about what it took to fix up a house.Back to the REO lessons.  you can spend hours looking at houses online and in person.  REO homes are not like your typical house.  I have learned that an REO home means expect the worse especially in these tough economic times.  You have to look at an REO house differently then a regular house that is for sale by the owner.  The banks do not know a thing about the house so forget about the disclosures.  They will not give you any.  They do not know what they are.  I mentioned earlier about treating it like a business transaction.  You cannot fall in love with the house.  You have to think of it as a business transaction just like the bank.  The more you talk like them the easier it will be for you in the long run.  We walked away from another REO that we put an offer on because we would not budge on our price.  I am glad we did not buy that first REO because the one that we got is a lot better and we got it for a lot less then the first REO sold for.  That is another lesson we learned.  There will always be another house for sale and it might even be better.  At a certain point you cannot keep thinking there will always be another one because then you will never get a house.  You will always be waiting for the perfect one.  If you can learn and accept there is not one perfect house that will fit all your criteria but  there is one house that will have most of your criteria then you will find that house.   If you treat buying an REO like a business transaction and are prepared to walk away, knowing you might be able to find another house given the time, you will be able to negotiate a lot better with the banks.  Remember to talk their language and you will find they will start talking back to you and you may just find a house - we did. 

There are many foreclosures out there today on MLS.  It is a sign of the times.  Many people are loosing their homes and many banks are having to sell those homes at reduced costs.  It’s great if you are in the market for a house.  You can get a really good deal if you can find one that is to your liking and fits all your needs.  Of course there is a great debate on whether or not this is the right time to buy but that’s for a different day to discuss.  With so many foreclosed homes on the market, you really have to prepare yourself before you go inside of one.  They may not all be in the kind of condition you are used to looking at when it’s a typical home sale.

Foreclosed homes or bank owned homes (REO) tend to lean more on the fixer upper category instead of turn key or move in ready.  Many of them may be missing certain things that you feel should be included with the house such as light fixtures, appliances, doors…yes some of them even have doors missing.  The key that you need to remember when looking at a foreclosed house is that they are typically all sold AS-IS.  That may scare many people but that shouldn’t make you walk away before you even look at the house.  Even though they say AS-IS, many banks may be willing to negotiate on certain things especially if they are required to make the house livable or if they are small enough requests that it wouldn’t affect them too much to do.  Termite work is always a good idea to have done regardless of the AS-IS designation.  If an item is called as missing on the appraisal report, there is a good chance you can ask and probably will get those items.  The other item to remember is that once you are in escrow, that doesn’t mean you can’t ask them to do something even though they said AS-IS.  It never hurts to ask.

Many homes that are foreclosed on these days are homes that have just been neglected.  There are some that are foreclosed because the previous owners took money out for remodeling or repairs and never got around to finishing those repairs.  Some of those homes may need special loans if they are not livable.  What you should be looking for are the bones of the house when looking at a foreclosed home.  Don’t look at the cosmetics or the lack of staging.  Many are empty and have been empty for a while.  If you look beyond the finishes and the dust, ask yourself if the house has a good lay out.  Does it have a sound structure?  Can you take the cosmetic stuff away and have a nice looking house?  Because so many of the homes are being sold at reasonable prices, it wouldn’t hurt to look at a few foreclosed homes and add the cost of fixing it up to your standards and seeing if it fits within your budget.  You might be able to find a home that you can make your own just by looking beyond the paint and dust. 

With the foreclosure rate being so high these past 6 months, many homeowners may be wondering if it’s the right time to buy? A quick look at many of the real estate forums on the Internet will show the great debate has been raging for many months now. On one side, you have the team that thinks you should wait because there are more foreclosures in the horizon. On the other side, you have the team that thinks you should buy any deal you can find right now. If you listen to Warren Buffet, “Now is the time to Buy.”

Deciding when the right time to buy a house is always a big decision. Deciding to buy a foreclosure is an even bigger decision. Buying a foreclosed home is not the same as buying a regular house that is being listed by a homeowner. A foreclosure on a house usually means the previous homeowners owed too much on the home and could not pay it back. Therefore the bank had to take possession of the house. They could have taken possession amicably or forcibly. The condition of the house will tell just how well the transfer went from the previous homeowners to the bank.

Many foreclosures are in need of some sort of repair. There are very few foreclosed homes that are in turn key move in condition. Many foreclosures will need updating, because the previous homeowners took out money during the peak of the housing market with the hopes of remodeling or updating the house. You will find many that have also been vandalized either by previous owners or because the house was empty for many months. Almost all the foreclosures have a good story to tell. It is just a matter of finding the right person who will tell you the story on the house.

For the homeowner who is looking to buy right now, a foreclosure might just be your diamond in the rough. A foreclosure might be a way for you to get into the neighborhood you might not have been able to afford 2 or 3 years ago. If you are willing to put in the sweat equity, you might be able to find your self a very reasonably priced home. Like with any home buying decision, the right time to buy is a very personal decision that only the homebuyer can answer. Is it the right time to buy a foreclosure? That is really up to you. For more information check out the rest of our website.

A quick search of foreclosures in the Los Angeles area of Southern California last week showed 1,220 homes listed in 24 hours. While that seems like a high number it is not a record and sadly it is almost becoming an average number of listing. Now we did see a slow down in foreclosures starting back in November when all the banks and lenders started putting a freeze on their foreclosures proceedings. If you are a homeowner who could be in trouble, the freeze on foreclosure proceedings was probably a relief. The new loan modifications that are out there are going to help many people but is it really going to help the majority?With the economy continuing it’s free fall, despite the holiday push in retail sales. The US unemployment rate saw a rise to 7.2 percent last month with the loss of 524,000 jobs. This is the highest in almost 16 years rising from 4.9 percent in December 2007. With so many people unemployed and the expected unemployment rate continuing to rise, the foreclosure rate is still going to be going to be on the high end. Even with the help of a loan modification and the proposed Federal Stimulus package from President Elect Obama, many homeowners may still face foreclosure.So how are people trying to fend off foreclosures? Many homeowners are trying to save as much as possible. They are selling their investments, cutting back on spending and even renting out some of their rooms. The number of roommates wanted in the classifieds has gone up. Consumer spending has gone down as people try to pinch every penny they can get out of their paychecks if they are getting them. Consumers are spending only on the must have’s now instead of the wants. Even if you aren’t faced with a foreclosure possibility, many people are cutting back on everything with the hopes of being able to ride this recession thru as unscathed as possible.It is a vicious cycle that we are currently living in. With the unemployment rate up and consumer spending down, the economy will need a big push to recover. Some homeowners will find a temporary relief from the foreclosure tornados that are ripping thru some communities through the new loan modification plans. Unfortunately, foreclosures are going to be inevitable for some homeowners who just are too far in debt. And it will be a while before we can say we are seeing the end in sight when in comes to foreclosures being listed in the thousands.

That’s the question on everyone’s mind who is thinking about, planning, currently in the market for, or just plan speculating on real estate.  Most people will agree that it isn’t the time to be SELLING a house right now if you don’t have to.  Unfortunately, many people are stuck in the position where they have to sell.  So that’s good if you are a buyer.  You never know when you will hit the bottom of the housing prices until they start going up again.  20/20 always works best after you’ve passed something by.  But many people are always asking and speculating on if it’s the right time to buy a house?

If you frequent any of the real estate forums, you know there has been some great discussion on when is the best time to buy.  People get into heated debates on how long the down fall will last and when and how to time it just right.  This of course like many other things is just pure speculation.  No one knows for sure when the bottom will come.  No one can predict when the buyer’s market will start turning to a seller’s market.  We can speculate and with fair certainty that we won’t have the boom that happened from 2002 to 2006.  Housing prices won’t sky rocket with the benefit of low interest rates and shade loans anymore.  We have hopefully learned from that mistake.  But the question still remains when is the right time to buy?

It will all depend on your situation.  If you are a home buyer who wants to stay there a long time, i.e 10 years or so, and you find something you really love and it feels like the right house and right neighborhood for you then that is the right time to buy.  If you are planning on trying to take advantage of one of these foreclosed home deals and pick up a house really cheap with the intent of trying to flip it for more then what you paid and put into it, then good luck with you and hopefully you researched everything before you get into it.  Now is probably not the time to flip homes unless you really know what you are doing and are certain you are getting the house for 50% below market value.  Otherwise, the days of being able to flip a house and get quick cash out after 2 months of work are probably gone for the inexperienced flippers.  Really, the right time to buy, is when you feel its right for you.  It all depends on your situation.  Looking at what other people are doing and trying to get a house before someone else snatches it up is what got us into this mess in the first place.  Taking your time and really feeling comfortable with your purchase should be what drives your decision.  Not whether or not you are buying at the total bottom of the market.

So we put an offer on a bank owned house last week.  I didn’t really get my hopes up because we’ve put in an offer on another bank owned house last month and that didn’t go anywhere.  I figured if we got it great, if we didn’t we would just move on.  Each time we put in an offer, it’s a new learning experience for us especially when dealing with banks.  Well we found out today that the offer was accepted.  We didn’t even get a written statement saying they accepted, just a verbal from the listing agent.  I wonder if that’s normal.  Does bank owned give them the right to forgo some of the standard operating procedures of buying a house?

Our agent said that we are basically in escrow.  We’ve signed the acceptance offer and they say we will be closing on the 29th.  Short escrow but we don’t really care.  It’s definitely a fixer - bad carpet, stains everywhere, missing light fixtures, original everything - think pick bathtub and tiles!  I think most people got scared by the house.  Those that put in offers probably are contractors and flippers hoping to make some money.  It’s in a good neighborhood and a huge lot so there is a lot of potential.  Remember, we always look at the potential of the house - not the cosmetics. 

That being said, I didn’t really think they would accept our offer.  I thought we were just going thru the exercise and they would come back like the last one at a ridiculously high price or say someone else was offering more and we’d walk away.  I’m a little shocked they accepted our offer.  Actually they came back after our first offer and asked for our best final offer.  Which I still don’t understand.  If we put in an offer to begin with wouldn’t that be our best and final offer?  Are they telling us there are other offers and but can’t tell us the price?  That part I never understood and don’t think I ever will.  So now I guess the real saga of home buying begins as we go thru the escrow process.  Hopefully there is a light at the end of the tunnel!

We’ve been looking for 6 months now.  I’ve found a few good real estate websites.  We used to really only useZiprealty.  But lately I’ve found myself liking Redin.  Both websites allow you to save favorite homes that you’d like to keep track of.  Both can put you in touch with a realtor to see houses in person if you find one on the internet.  We used Ziprealty when we bought our first house.  Not to buy but just to find what houses where available and the going prices for them in the neighborhoods we were looking at.  I’ve been checking the listings daily.  Although I’m not sure how quickly they list new homes, they both seem to list them with in a day of the house hitting MLS.  I’ve also found myself on a number of realtors email listings from the various open houses we’ve gone to.  It’s been a weekly ritual on the weekends to see where the open houses are.  

Unfortunately, the buyers market doesn’t seem to be in the areas we want a house.  Or should I say we just are looking in areas that may not be immediately feeling the buyers market.  It’s not that prices are going up.  On the contrary, prices are definitely going down.  It’s just their isn’t the inventory out there in the area we want.  It seem like the same homes are still for sale.  The same open houses every weekend.  I’m not sure if it’s the holidays, or if the whole freeze on foreclosures has affected the market, but there definitely aren’t as many homes on the market as we would like.  

Sure there are certain areas where there are a ton of homes for sale.  But we aren’t looking in those areas.  So I have to wonder, exactly when will the inventory start coming up.  I keep hearing that there will be a flood of homes.  I just haven’t seen them.  We seen a few REO and short sales.  We’ve even made an offer on one but backed out when they wanted more then we would go.  I hear horror stories of people buying foreclosures and short sales; about how the drag on and on and on.  If banks want to sell a house why don’t they just put it on the market.  I just don’t understand.  At least put something on so we can have something different to look at.  In the meantime, the home buying saga continues…

As a potential home buyer in a buyers market, I always wonder why it has to be such a process.  I’ve only bought 2 other homes in the past 8 years so I don’t have as much experience.  Our first home purchase was pretty easy.  I really don’t remember it being such a process.  We put in an offer right before our wedding.  Escrow started just days before our wedding and with us leaving for our honeymoon.  We scrambled to do the home inspection before we left.  I remember we cam back and signed the papers and somehow, somewhere, we got the keys to the house.  Our first house was a fixer.  It used to be a rental and it still had everything original from when it first was built.  Ironically it was the same age as Jon.  I don’t remember even turning on the utilities.  I remember the first night we had the keys, we went to the house to change the locks and take a look at it.  I remember almost getting locked in the garage but that’s about it.  The whole process of buying the house seemed relatively simple.

Fast forward 8 years and 2 kids later, the process isn’t quite so simple.  Just looking at houses now is very different.  We have 2 kids to think about.  8 years ago we weren’t thinking about school district or lot size.  We just wanted to get a house so we could be out on our own.  There was something about being married and having a house that seemed to fit together.  Now I’ve spent months researching schools and school districts.  I’ve tried to figure out the school boundaries and looked through dozens of forums to try to find out which school is good and which neighborhoods feed into those schools.  Something I didn’t do 8 years ago.

A year ago, we bought a house with my parents, in a really nice neighborhood and good schools.  After having spent probably 6 months of looking at houses on the internet and in different cities, it was nice to finally settle down.  Of course I should have known better.  Things happened, people changed, needless to say, we had to move again after 7 months.  I was back to looking at schools, neighborhoods, and packing up.  I was starting to get the hang of the packing, but the actual moving part wasn’t easy.  So we decided to find a place near work so that we wouldn’t be too far from the kids when they’re at school.  The housing markets in our favor and since we didn’t want to rush into anything, we decided to rent.

Since we are temporarily renting a house now to get a feel for the area, I’ve sort of had a dry run when it comes to setting up utilities and such.  It’s not always the easiest thing to do as one might think.  Also, since we had to move to the rental, I’ve had a taste of what it’s like to move with 2 kids.  Definitely not easy but can be accomplished with some help.  But all of that is just the prep work for the whole house buying saga.  We’ve been looking now for 6 months and the whole process hasn’t even started.  We’ve barely gotten our foot in the doors.  So I guess that’s where the house buying saga continues…