Luxury Loft Boom
Hot Market for Downtown Luxury Lofts in Los Angeles
50 Downtown luxury lofts above the $775,000 mark sold in the 2nd half of 2014. Get the FREE Luxury Recent Sales Report, plus a certificate for $2,000 off closing costs.
Sky Loft 1207 luxury condo got 5 offers even though it could not be shown most of the time due to an uncooperative tenant.
While hot markets are seller’s markets, with buyers racing and scrambling to make the deal, licensees representing sellers, and sellers themselves have plenty of reason to sweat as well. Fielding multiple offers, evaluating offers for their merit and ability to close, and overcoming appraisal hurdles are just a few of the challenges of representing sellers in a hot market.
Metropolis Super Luxury Tower Condos Under Construction
In a hot market, sellers may receive multiple offers, even within the first few hours or days of having their home on the market. In evaluating offers, the following factors should be considered:
Net sales price (sales price minus any closing costs, including commissions and credits)
Buyer’s financing (amount of down payment, type of financing (conventional, FHA, VA)
Contingencies (home inspection, appraisal, financing, HOA review, sale of home)
Earnest money deposit and type (e.g., promissory note vs. check)
Will the property appraise for the agreed-upon sales price?
Looking at these factors individually and as a whole will help sellers identify the best offers. Get the Top 50 Luxury Loft List – FREE Luxury Recent Sales Report, along with a certificate for $3,000 off closing costs. Fill out my online form.
L.A. Loft Blog, 816 S Broadway, Los Angeles, CA 90014
*Guaranteed home sale by end of listing term at price agreeable to seller – details at LoftSoldForSure.com. The #1 Downtown buyer’s agent with 19 successful buyer transactions closed in 2013, Corey Chambers is a Realtor®, and member of the Top 6 award-winning, 5-Star Yelp rated team. J.D. Power Award 2012 – Keller Williams Realty ranked Highest in Overall Satisfaction for Home Buyers and Sellers Among National Full Service Real Estate Firms. DRE#01889449
Downtown Loft and Condo Short Sales
Distress Sales Below Market
While short sales are currently few and far between in Downtown, they still pop up once in a while when a homeowner has a financial problem on a home that was overpriced when previously purchased.
A short sale can happen any time that a seller needs to sell a home for less than what the seller owes on the property. The lenders must sign off on the sale, which can delay or prevent a successful transaction.
Short sales are not short. They typically take twice as long as the average sale, or longer. A few years ago, it was not uncommon for a short sales to take more than 6 months to close.
HOME SELLERS: Before deciding to do a short sale, consider the following:
What is it about your current financial situation that has you considering selling short?
Do you know the ramifications of a short sale on your credit report?
Do you understand that there is a possibility that the short sale will not relieve your debt obligations?
Have you met with a housing counselor, a financial advisor, or an attorney?
Have you considered alternatives to a short sale?
Short sales are not for everyone.
Not everyone will qualify for a short sale. To qualify for a short sale, the following are some of the requirements:
The home must have decreased in market value.
The loan is in default, or will be soon.
The seller must be able to demonstrate a bona fide hardship, such as one of the following:
Unemployment
Reduced income
Business failure
Damage to the property
Death of a spouse or a wage earner
Severe illness/medical emergency
Large tax bill
Divorce/separation
Relocation
Military service
Mortgage payment adjustment to an unaffordable amount
Large debt, no assets, bankruptcy
Incarceration
4. The seller has no assets.
Short sellers should then contact a short sale specialist Realtor(R), who may ask some the
Tips and Rules for Short Sales:
An O&E (preliminary title report) should be obtained early in the short sale process to determine ownership and encumbrances.
In a short sale, the seller must accept and the lender must approve the offer.
With a short sale, the listing agent will prepare the CMA with the lender in mind.
Try to secure your seller’s cooperation in the short sale process early on.
Short sale packets should be thorough and in the form the lender wants.
The seller’s hardship letter should concisely demonstrate the seller’s financial plight, and how the seller came to be in the current situation.
Short sales must be at arm’s length; there can be no undisclosed relationships between any parties to the transaction.
When dealing with the lender’s short sale lender it is important to be polite, professional and prompt.
After approval is met on a short sale, the parties should do their utmost to meet all terms, including the closing date; failure to do so could cause the lender to retract its approval.
Lenders will frequently start foreclosure proceedings even while the short sale request is being evaluated.
Even when the lender approves the short sale, it doesn’t mean the seller won’t have to make up the deficiency in the debt repaid.
When a lender forgives a short sale seller’s debt, the lender will file a 1099-C, which is a Cancellation of Debt. This could mean the debt will become taxable; sellers should be advised to check with their accountant.
There are two main categories of short sales: approved, and third party required, each with different timelines.
When evaluating an offer on a short sale, the lender will look most strongly at the buyer’s ability to close.
Two types of mortgage fraud are property fraud and fraud for profit.
Flopping is a means of artificially lowering the perceived value of a property to purchase it and make a quick profit; it is a form of mortgage fraud.
Any transactional funds should appear on the HUD-1; if they do not, it could be mortgage fraud.
