Investment Property

Have you tried to find a rental property lately in Glendale or Peoria? There aren't a lot out there - 305 for all of Glendale and Peoria, no matter the size, age, type (house, condo, apartment) or features.

Guess how many short sales closed in the same cities between January 1 and today? 385. Hah! That doesn't count foreclosures.

Short sellers can't get financing for home purchases for awhile - two or three years maybe - but that doesn't mean they can't buy. If they can come up with cash from friends or family or cash in retirement portfolios, they can buy lower-priced properties for cash.

Or they rent. And lots more are renting than buying.

If there could be a better time for somebody - or somebodies - to pull together funding for investment property, I don't know what it would be. There are tenants who want them. The demand by tenants for rental property is real, and demand affects pricing.

Once the tax bill is paid, maybe it's time to see what funds are available to purchase investment properties. Goodness knows there are people who need places to live.

Rentals

I have been working with a young family to find a home for them for the next couple of years. We've seen several as they are educating themselves on "must haves" vs "nice to haves" - and they are adjusting to what's out there for what they can afford. This afternoon we thought we'd found it - good location, big enough, new enough, low maintenance interior, pool with pool upkeep included in the rent - not 100%, but then what is. (I'd given them my "there is no such thing as a perfect house" speech - "repeat after me, 'there is no such thing as a perfect house'")! Unfortunately, after one (count them, one) day on the market, somebody got an approved rental application in before us. Very disappointing. But the search continues - if it is out there, we will find it. We must!!!!

"As Is"

What does "as is" mean when it comes to purchasing real property? It does NOT mean that a buyer must go ahead with the purchase if during inspection a "deal-breaker" turns up. No buyer should waive the right to inspection a property unless he has such a great deal that whatever should turn up is of no consequence. What an "as is" purchase does mean is that should a repair issue turn up during the buyer's inspection period, the seller won't make any corrections - not a drop in price, not a repair, nothing. No way, no how. Are there exceptions? There probably are exceptions to everything - at least almost everything. Let's say the seller did not know there were termites. The buyer found termites during inspection. Now the seller knows. Would it be smarter for the seller to pay for a termite inspection and keep the current buyer happy than it would be to refuse and find another buyer and run the risk of that buyer cancelling too? Sure. But smart does not always enter into the transaction - especially if the sales price already reflects discounts for repairs. So - most of the time - when a buyer signs an "as is addendum" at the time he extends the offer, he needs to understand that there may be issues at inspection and if so, he has choices. 1) He can proceed with the purchase; 2) he can cancel the contract. If he cancels within the inspection period, unless he has agreed to nonrefundable earnest money, he is entitled to a full refund of his earnest money.

The Smoke House

Off and on for the past year I've been working with a really nice woman in search of a home for her family. We met on a sign call - I had a listing in Oakdale - that's a Glendale subdivision with homes built in the mid-80s by Contingental. Nice community - no HOA. But that property was not quite right for her so I committed to trying to find something else. We looked at a few - got a feel for what she liked - and found a short sale that was nice. Unfortunately, it wasn't nice enough. It took a couple of months or so for the seller's lender to sort through the offer. Then the lender asked for more money. We countered their counter - but it really wasn't worth it to the buyer so we cancelled the contract. We lost touch for a little while - she still got my newsletter but the motivation to buy had sore of waned. Then we started looking again and boom - there it was. THE house. Nice neighborhood. Not too far from current house. Interesting floorplan (a bi-level, with the kitchen and main living area upstairs), nice yard. But the feature that made the buyer laugh out loud was a smoke house - not the kind that you smoke a pipe in, but where you smoke fish and meat. This is something the buyer has now and loves - so it made it an easy "yes" for her. Then, wouldn't you know - it is bank-owned and a multiple-offer situation. We made the best offer we could - a little over asking price - and the bank accepted. Hurray. Or so we thought. Next step is home inspection. We'd expected a few issues - assumed they'd be "cosmetic" - but were not expecting mold. Mold is a four-letter word when it comes to house purchases. I am not a mold expert. I do know that there are different types of mold - some no big deal, others not so good. This mold looked to be the not-so-good kind. The house had been vacant for some time. There had been leakage from the a/c air handler. The eaves were rotten in places. The patio cover was rotten in places. The list goes on. Anyway - we cancelled the contract. We continue to look. They know what they want. They're realistic as to what they can find for their price. All we have to do is find it and get our offer in before somebody else does. The inventory is shrinking so the search is not as easy as it once was. Hold a good thought.

Litchfield Park

I love it when a buyer knows just what she wants. Usually when I show properties to prospective buyers the maximum number of showings at any one time is six. That's because after seeing that many they all begin to blur - it's difficult to remember one from the other. But the other day I showed eleven. The buyer had identified the general area, had reviewed each of the listings I sent to her on line, and narrowed down to within a three mile radius, more or less. She was good at keeping within her budget. She could see the possibilities of pretty much each house (though neither she nor I were able to stay in the one smelly house long enough to try to make that one work). And she did a great job of making notes and ranking what she saw. When we came to "the one," she knew - she just knew. Corner lot. Quiet. Big enough. In fact the yard is a little too big - but she's okay with that. Is the floorplan perfect? Not quite - but she likes it anyway. Room sizes are good. Needs paint - but she knows painters. Carpet needs cleaned and one day she'll replace it, but for now she'll have it cleaned. She knows it'll work for her. It was a little over-priced - though we didn't know that when we first looked. It had been on the market for awhile and it compared very favorably to the other ten we'd seen that day. But in looking at similar properties in the neighborhood that had sold within the past three months, it was difficult to find something priced like that one. So we made an offer just a little lower - in an attempt to avoid issues with appraisal. We asked for the seller to pay the buyer's closing costs. The seller (Fannie Mae) countered with a little higher price. We countered back with same price but a little less by way of close cost assistance. And hurray - we have an accepted offer. Now it's time for home inspection. I'm guessing we'll have no issues during inspection - which is good, because with Fannie Mae properties, it is what it is so buyer either deals with imperfections or cancels. Then, assuming all goes well, buyer's lender will appraise. And if that goes well (please - let it go well), then buyer will have a new - okay not new, but new to her - house within a month. This buyer has been great to work with. She's realistic - she knows the area and she knows her budget and she knows that perfect is in the eye of the beholder. She's pleasant. She's polite. And she's really happy to have found something that works for her. Now - to keep fingers crossed that all goes well with inspection and appraisal ....