Is there a "good" side to the foreclosure crisis?

AKA, Young Couple Buys First Home, Then Engagement Ring

My favorite part of selling homes is when you help people achieve their dreams, especially younger folks. Back in September I got a call from Kevin Garda. He had just had a bad experience with another real estate agent and a short sale property that he put an offer on. I told him and his girlfriend, Cristina, that I would be happy to find him a home and I was thrilled that he already had been approved for an FHA loan. When I met them, I knew they looked young but I didn't know what age until recently. Kevin is 23 and Cristina 25!

Anyway, within just a few weeks we had an accepted offer on a great single-story previously foreclosed home in the very low $100's (pictured).

Kevin is paying less on his mortgage then he was paying rent previously. And the most exciting news; After putting the home in escrow, Kevin put an engagement ring on Christina. The two are planning to get married soon. Congratulations guys!

This transaction made me reflect about today's market. Yes, there are a lot of foreclosures and short sales in our market. I should know, I have done plenty of short sales for my clients. But there is also a positive side. With the median home price in February being $128k, homes are more affordable than they have been in a long, long time. Kevin and Christina were able to buy their first home in a neighborhood they wanted to live in and pay less than rent. That couldn't have happened in 2004.

Market Slow? Then why do we have multiple offers?

Doom and gloom or new housing boom? A bit of both. If your trying to sell your home and you can't price it to sell, it's gloomy. But from a market standpoint certain segments are hot. Sizzling hot. Suddenly, those buyers and investors sitting on the sidelines are putting in offers on the best-priced homes. The homes that are "steals" are not only getting sold, they are receiving multiple offers, at least in Las Vegas. I called one listing agent on a bank-owned (REO) listing yesterday and she told me she had 27 offers on it. My own REO listings have also had several offers. Market slow, eh?

It really is a tale of two markets. The homes that are priced to sell, mostly bank-owned, some "short-sales," and some non-distressed homes are moving. And moving briskly. In fact, this last week, the number of homes going under contract is up several percent over the previous weeks and months. The demand has been there, sitting on the sidelines until the price is right. And for many, that time is now. The other market, those homes priced significantly higher than the distressed sales, are sitting there. I guess the old economics professor was telling the truth.

Yes, the price adjustment is causing grief for many sellers but the reality is the market has spoken and those words are actually a blessing for some. Yesterday, I showed several decent homes to a schoolteacher client of mine in the below $200k range. She is excited about two of the houses and we'll likely make an offer on one of them. I am so thrilled that I can actually find for an underpaid, hard-working schoolteacher, a home that she can afford. And I'm also thrilled that the investors are back. I will be showing an investor client several bank-owned properties in the under $200k range tomorrow. He intends to buy two homes for rentals. And with rental demand increasing, this is a good investment strategy.

So now with the new-home standing inventory drying up, the well-priced resales homes selling, it means that the market is coming back. Will the market return to frenzy status soon? Nope, but gosh, wouldn't we all like to see at least a "normal" market now. I do.

http://www.NevadaRealEstateCenter.com/

Buying or Renting a Pet-Friendly Home

Dogs are people too. Well, to some folks they are. And to most people their pets are part of the family (just as my Yuki is). Today I want to talk about some considerations when buying or renting a home if pets are part of the family.

So, your real estate agent just found you the purrfect home. There is plenty of room for Johnny and Susan and a big backyard for Sweety the Pitbull, Dumbo the Bull Mastiff, Tiny the Yorkshire Terrier, and Morris the Persian Cat. You put in an offer and the seller accepts! There is lots of paperwork, voluminous HOA (Home-Owners Association) docs you barely skim over, and packing to get done. Phew.

You move into your new home and all is great. An envelope shows up in your mail that week and you open it: "Dear Homeowner, there have been complaints that your dogs bark all night long. We are fining you $100. Please take the necessary means to keep your dog quiet. Love, Heavenly Homeowners Association." Excuse me?!?!?!?

Two days later: "Dear Homeowner, as you know the HOA rules allow a maximum of two domestic pets per household. You seem to have four. We are fining you $200. Please take the necessary means to get rid of two of your beloved pets immediately. Love, Heavenly Homeowners Association." What?!?!?!?!?

Five days later: "Dear Homeowner, as you know the HOA rules do not allow dangerous dog breeds to be anywhere in the community including Pitbulls, Akitas, Staffordshire Terriers, and Chows. We are fining you $300. Please take the necessary means to get rid of your beloved Pitbull immediately. Love, Heavenly Homeowners Association." My Pitbull is sweet, what the !?!K are they talking about?

Six days later: "Dear Homeowner, as you know the HOA rules do not allow any pets over 35lbs. Your Mastiff looks like a horse, what did you feed him, your Pitbull? We are fining you $200. Please take the necessary means to slim your 80lb Mastiff to 35lbs or get rid of your beloved Mastiff immediately. Love, Heavenly Homeowners Association." HELP!!!!!!!

Okay, yes this may sound like an impossibility. But any or all of these situations could happen to you if you don't read the HOA documents carefully. And yes, these scenarios do occur. Even in communities that don't have a governing HOA, local laws and CCRs could still have the same effect especially if you have a neighbor or two that get annoyed.

HOAs do provide a valuable service for those that like an orderly community. And most communities with Associations are very livable and even desirable. In Las Vegas nearly all newer communities are governed by an HOA and many older ones as well. So, what should you do to help avoid fines or worse, having to get rid of your four-legged family members?

When Buying

1. Get the HOA documents (CC&Rs/Rules and Regulations/Latest Board Meeting Minutes if possible) as soon as possible after getting your offer accepted.

2. Read the documents thoroughly. If there is something in there about pets that you don't understand, contact your Realtor or the Association directly and ask.

3. Check for: A. How many pets in total are allowed. B. Is there a weight limit. C. Are there restrictions on certain breeds. D. Barking/Nuisance rules and remedies.

4. If you are not familiar with the local laws, check those as well. Some states have already or attempting to ban the ownership of certain breeds all together!

For Renters:

1. Before signing the lease agreement, get a copy of the HOA documents too even though you don't own the home. As a tenant you are responsible to follow the rules and regulations. Many leases will assign the responsibility of paying any fines onto you.

2. Most rentals won't allow pets and those that do usually require an extra security deposit. Before even looking at a rental ask your agent or the property manager/landlord, what are the pet restrictions? Many will say "up to landlord's discretion" on what pets they will accept. This means you provide details (and sometimes pictures) about your pets on the application. Then the landlord says yay or nay. By the way, most landlords won't allow "dangerous" breeds to be in their properties even if there are no regulations against it. Also, many won't allow aquariums either for fear of water damage should the aquarium break.

Questions, comments?

-John