Todd's Real Estate Blog

Fires and the Real Estate Business

The effect of the fires have been devastating.   I also realize that this week's events has caused our market to slow to a crawl.   As a result, the next few weeks will be challenging.   Here is a list of what we in the industry can expect:

• Sales will be slow as people reorganize.   Over 500,000 people were evacuated this week; it will take a few weeks for households to get back to normal.
• The rental market should heat up with as many as 1,200 families may be seeking more permanent shelter after having lost their homes or suffered damage.   If you have clients whose houses are vacant and are not seeing any activity, this may be a good time for them to enter the rental market and wait out the buyer's market.   As a result, we may some prices stabilize as properties leave the sales market for the rental market particularly since the most affected properties (sub-prime mortgages) were the lesser expensive homes and would make the best rental properties.
• Finally, and perhaps most frustrating for those of you with escrows about ready to close, closings will come to a halt for the next week to 10 days.   Lenders are not going to lend and insurance companies will not be issuing policies unless they have verification that the house is still standing.   As long as the fires are burning, it will be tough to get funding.   Please let your buyers and sellers know what is going on; even though a buyer may technically be in breach for not closing, this failure to close is the direct result of an "Act of God" and no court of law is going to find the buyer in breach of contract.

Is your home worth less than what you paid for it?  In this down market, there are many homeowners upside down in their mortgages or they lost all of their equity. 

If this is the case it's a simple call to the County Tax Assessor to have your property re-assessed at the new lower appraised value.  This alone could save thousands of dollars in property taxes in San Diego.  Have a real estate agent give you a "fair market value" or pay for a professional home appraisal and simply submit to the County Tax Assessor and ask to lower your property taxes since your home is no longer worth what it was previously assessed for.  I recently completed an estimated "home value" based on SOLD comps and my client was able to lower his bill.  It works, but you have to ask.

In SAN DIEGO, the best and fasted way to get a response to see what the seller's motivation is to just "Write the Offer". 

I'm constantly bombarded with questions from buyers asking, "What do you think they will take?", "How low will they go?" or "Do you think the market has bottomed out?"  No one in this country can predict what the future holds for San Diego real estate.  We can all give our professional "best guess" but that's about it.  I try to avoid making predictions because this market is so "unpredictable".

If your Realtor is taking the time out of their busy schedules to drive around and show you properties that meet your search criteria, then you should be prepared to "Write An Offer" when you locate a home you like.  In this tough market, I wish I had a dollar for everytime I got a call from a Realtor asking me what I think the seller will take, my answer is always the same, "Write an offer and we will negotiate from there."  I think most buyers are scared of writing an offer because they are not well informed of the process. 

An offer is simply a binding contract between a buyer and seller with a contingency period or "Free Look".  Until you remove contingencies and you are completely satisfied with all your inspections, your deposit is safe.

You can change your mind any time during the contingency period and lose nothing.  Ask your Realtor about the process and do not be scared about writing an offer.

TALK IS CHEAP, PUT IT IN WRITING!