UPDATE: Appraisals compromised due to lack of comps
May 23, 2009 by Debbie Bremner · View Comments
In March, I started writing about the fact that home appraisals, and therefore home purchase transactions, were being compromised by the lack of recent sales comparables in the higher end price range on the Westside. The situation has become even more complicated, due to the fact that major lenders are now sending out appraisals to a network of appraisers, some of whom have little or no experience working in a market like this one.
Finding the right house to buy is never easy; selling a home today is also challenge. It’s best to prepare yourself for obstacles that could cross your path so that you’re prepared should they arise.
In some markets, one in three transactions doesn’t close. This is a high ratio compared to the fallout ratio in previous years when the housing market was stronger and financing options were plentiful. In past years, most transactions fell apart over inspection issues. The biggest hitch today is financing, which is not to say that property defects don’t come into play.
For some time, lenders have tightened up on their qualifying criteria, making it more difficult for buyers to obtain the financing they need to close a sale. Recently, appraisals have become problematic, particularly in low-inventory, higher-priced neighborhoods such as Brentwood, Westwood, Little Holmby, Bel Air and Beverly Hills.
There are three components to lender approval. The borrower must be financially qualified. This requires a good credit score, sufficient cash for a down payment and closing costs, as well as verifiable income. The lender also needs to approve a title report on the property to confirm that the seller has marketable title to the property. And, the lender needs an appraisal of the property to confirm that the buyer is not overpaying.
Previously, lenders’ underwriters required three comparable sales in the area that occurred within the last six months to validate the purchase price. Due to the declining housing market, lenders now want to see comparable sales information on listings that sold and closed within the past 60 to 90 days. The listing inventory in Little Holmby in particular was very low from October 2008 through March 2009, making it difficult for appraisers to come up with enough comparable sales information to satisfy the lenders.
To complicate matters, some appraisers and lenders automatically lower the appraised value by a certain amount if the property is in an area that is deemed as a declining market. (Any time a property has been on the market for more than 180 days, the lender automatically deems it is a “declining value” property. Since market times in our higher end neighborhoods have been steadily on the rise, many comparables are already labeled declining value by the appraisers, affecting the properties they are being used for comparables.) This can result in an appraised value that is lower than the price the buyer and seller agreed to in the purchase contract.
What can you do if an appraisal comes in under the negotiated price? We will talk to the lender to find out which properties were used as comparable sales. We may be able to augment their report by providing the appraiser with comparable sale information that can support the contract price, particularly on private sales and especially if the appraiser is from out of area.
The most accurate appraisals are done by appraisers who know the local market well. Unfortunately, changes in the lender’s practices are resulting in more appraisals done by appraisers from outside the local area. Many lenders no longer have their own, in-house appraisers; many are relying on large nationwide appraisal services to provide appraisal services. In addition, be prepared that the appraisal times are longer than even 60-90 days ago, and make sure your Realtor® adjusts the contingency periods appropriately.
If the appraiser can’t be convinced that the appraised value is low, and the buyers and sellers want to make the transaction work, it requires a compromise. Patience and creative problem solving, in conjunction with the buyer, seller, and mortgage broker, will often yield good results. Sometimes the purchase price can be adjusted, a new appraisal can be ordered, or secondary financing from the seller may be an option.
If you would like information on your particular situation, either as a buyer or seller, please contact us at The Bremner Group.
Sold Properties and Pocket Listing Update
April 23, 2009 by Debbie Bremner · View Comments
The Brentwood home at 650 Firth Avenue has entered escrow for the third time. Listed originally for 9.2 million in January of 2008, the property sold twice previously, after 3 major price reductions brought the asking price down to $5,000,000. Both of those escrows did not result in successful closings. The estate, designed by Paul Williams, was built in 1939, a wonderful example of the design and vision of this now-well known architect. The home sits on over an acre of prime land, on one of the most desirable lots in Brentwood. Signature Williams’ floating staircase. Grounds are equally impressive with mature trees and unobstructed views.
11256 Homedale St., LA CA 90049, an unusual Westwood Hills mid-century home finally sold after 152 days on the market The home was listed on 9/3/08 for $1,680,000 and received 2 price reductions during the listing term. The house closed at the end of March for $1,370,000. According to the MLS, the home is a 4 bedroom / 5 bath, 2,289 sq ft home on a 9,420 sq ft lot. Floor to ceiling windows had views of a Japanese garden with tea house, stream, waterfalls, koi pond and mature landscaping. The living room had a fireplace and opened to a large rooftop terrace. Serene master suite opened to a garden, and the master bath looked out to a private garden with waterfall. Two additional bedrooms and bath. There was a separate maid’s plus bath downstairs with outside entrance. Also, there was a large room with bath and outside entrance, which could be ideal for at home office/gym. This is a clear example that homes are selling once the pricing gets to the right level.
The following POCKET LISTINGS are available now:
Little Holmby:
Remodeled 4 bedroom, 5 bath 4,294 SF Pool, Nice! $3,695,000
New Construction, Mediterranean, 6 bedroom, 6.5 bath $4,299,000
Santa Monica:
Gorgeous 4 bedroom, 3+ bath, single story, 1 block from Montana, with pool $2,300,000
Brentwood:
Remodeled 1 story, 10,000 sq ft lot, 3 bedroom, 3 bath $1,799,000
Lower Mandeville, fixer, 12,000 lot with views, 4 bedroom, 2.5 bath, $1,699,000
Bel Air:
1 story Traditional, remodeled, with views, 3 bedroom, 3 bath $2,399,000
For information, contact Debbie Bremner at The Bremner Group, 310-571-1364.
Heffner, Spelling List Holmby Homes, New Little Holmby Listing
March 27, 2009 by Debbie Bremner · View Comments
Pocket Listing in Beverly Hills Flats, 2 Celebrity Homes, and 3 New Westwood/ Bel Air listings
Spelling Holmby Hills Mansion
This week saw lots of activity in listings on the Westside.
Hugh Hefner and his wife, Kimberley Conrad Hefner, who have lived in adjacent mansions since their 1999 separation, are listing Ms. Hefner’s Los Angeles home for $28 million. Located in Holmby Hills, the house stands next door to the Playboy mansion, Mr. Hefner’s massive, Tudor-style party-friendly home since the 1970s. Ms. Hefner, 1989’s Playmate of the Year, says she and Mr. Hefner bought the house about 10 years ago so that she could raise their two sons there, who are now college age. There’s a door in the wall between the two properties for easier access back and forth. The 1929 brick and wood English manor-style house, on 2.3 acres, measures 7,300 square feet and has a pool and a three-car garage. There’s extensive original wood paneling and a hand-carved staircase. Playboy Enterprises owns the Playboy mansion, but Mr. Hefner owns the house across the street, which he calls the Playmate Mansion.
Candy Spelling, the widow of television producer Aaron Spelling, is offering her Los Angeles mansion for $150 million, apparently the most expensive home for sale in the U.S. Ms. Spelling’s current, 57,000-square-foot house, dubbed “the Manor” and featured on guided tours of Hollywood mansions, includes a bowling alley, a beauty salon, a gift-wrapping room and a screening room whose screen rises out of the floor, with paintings moving up to reveal the projector.The Spellings bought the nearly five-acre property, at one time the home of Bing Crosby, in the early 1980s, tore down the house and rebuilt. When completed in 1991 it was considered the largest home in Los Angeles by far. Mr. Spelling, who produced a string of hits over five decades from “Charlie’s Angels” to “Beverly Hills, 90210,” died at the 123-room house in 2006 at age 83.
New to the market today are two Westwood homes, and one in lower Bel Air.
214 Ashdale Place
214 ASHDALE PL , LOS ANGELES ,CA 90049 is a newly constructed Mediterranean Revival Villa, and is a rare opportunity to own a lavish estate in Bel-Air. Old World charm built to exacting modern standards. Sited at the end of prime Bel-Air cul-de-sac & offers head on views to downtown in a lush canyon setting. The estate is very private, situated behind high walls & gates. All rooms are open onto a central courtyard or out to the pool. Amenities include a screening room, billiard room, gym & attached guest house.Spectacular master suite features sumptious finishes & all the trimmings. 6 Bedrooms, 10 Bathrooms, approximately 11,000 sq. ft. on a 32,890 sq. ft. lot. Offered at $9,350,000.
10715 Le Conte
10715 LE CONTE AVE , LOS ANGELES ,CA 90024 is a chrming country English home with wonderful details, located in Little Holmby. Built in 1933, the home is 3477 square feet on an 8189 square foot lot. The living room has high beamed ceilings and hardwood floors, and there is a formal dining room, 5 bedrooms and 5 baths. There are authentic Art Deco tiles in the guest bath. Remodeled kitchen is light and airy, and the downstairs also boasts a family room. The garage is currently used as a playroom. This is a truly elegant home, offered at $2,275,000.
2146 GLENDON AVE , LOS ANGELES ,CA 90025 is an immaculate 3 Bedroom, 1¾ Bath Spanish home that perfectly blends original charm with modern upgrades. North of Olympic Blvd and located in the Westwood Charter School District. Beautifully landscaped yard in desirable neighborhood. The living room has coved ceilings, hardwood floors and original fireplace and fixtures. Dining room with picture window. Kitchen and baths have been remodeled with Travertine tile and stainless steel appliances. Spa tub in redwood deck. Offered at $1,225,000. Also offered for lease for $4,950.
New Pocket listing in Beverly Hills Flats: A one story Spanish designed by noted architect Paul Williams is available in Beverly Hills. The property is 3 bedrooms plus a den, 2 baths, and needs updating. There is little yard. Offered at $1,400,000.
The home at 2207 Camden Ave., LA CA 90064 received a price reduction of 9.11% or $99,850, down to $995,900. The home was listed 2 months ago on 1/28/09 for $1,095,750 and this is the first price reduction of the listing term. According to the MLS, the home has 3 bedroom and 2 baths, on a 6,500 sq ft lot. It was previously purchased in 5/17/06 for $1,215,000. With this new reduction, the home is now listed 18% lower than the purchase price in 2006.
The property at 2201 Manning Ave., LA CA 90064 received a price reduction of 4.4% or $50,000, down to $1,079,000. The home was listed 3 weeks ago for $1,129,000. According to the MLS, the home is a 4 bedroom / 3 bath, 2,182 sq ft home on a 6,750 sq ft lot.
NEW BHPO POCKET LISTING
March 26, 2009 by Debbie Bremner · View Comments
Architectural Mini-Estate
Circa 1960 Architectural International style home done to the nines. Situated on a private, walled and gated lot. This home featured 2 bedrooms and a den (approximately 1,887 square feet, 2 updated bathrooms, a large living room, open dining room, sheets of glass, soaring, open entry, skylights, white hardwood floors, new top of the line with professional appliances and stainless steel counter tops, large deck, entertaining patios off the public rooms, and a modest, terraced grassy yard. A hip yet serene jewel surrounded by lush landscaping and located on a quiet cul de sac in prime lower BHPO. Wonderful condition, finishes and sophistication. Not to be missed at this price. $1,379,000
The Ten Worst Buyer Mistakes
March 21, 2009 by Debbie Bremner · View Comments
Oh no!
Buying a home in Los Angeles requires some homework. Whether you are planning on buying now or months down the road, there’s no time to prepare like the present. Buying a home is much more than just purchasing a new place to live, it’s one of the best investments you will ever make. Let’s face it, the stock market has gone down somewhere in the 40 – 45% range. That depreciation greatly outpaces the, housing market on the Westside of Los Angeles. We are fortunate to have some neighborhoods that managed to deliver some appreciation. It might be single digits, but nonetheless, it’s not depreciation. So, isn’t it fair to suggest that investing in your neighborhood is the smarter choice over the stock market? However, like any major purchase you plan to make, it is the educated buyer who gets the best deals. Many first time homebuyers make colossal mistakes when purchasing their homes. Here are some of the most frequently committed errors and ways to avoid making them.
Buyer Mistake #1: Making an offer on a home without being pre-approved by a mortgage broker
So often I hear that first-time homebuyers spend weeks looking at homes before meeting with their mortgage broker, then learning that they can’t afford the price of the home they want to buy. If you don’t discuss your situation with a lender first and get pre-approved, you will often end up wasting time looking at homes that are too expensive. Once you’ve met with a mortgage broker, you will be knowledgeable about the process of obtaining financing, about what types of loans are available to you, and you’ll know how much home you can afford to buy. In addition, any offer you make will have the credibility of the lender already stating that you are ready, willing, and able to purchase the home. Most important, shop for a broker, not a mortgage. Ask for references from your Realtor® as well as friends. Your focus should shift from shopping the price of the mortgage to shopping for the best broker. The broker will shop the market for you. Brokers shop lenders far better than you can, among other reasons, because they are in constant contact with many lenders, and know the niches where your situation fits. Just like finding a good real estate agent, it’s very important to find a seasoned and knowledgeable mortgage broker that you are comfortable with—who will explain the loan application process and all the options available to you. At The Bremner Group, this all-important meeting takes place before we even get in the car.
Buyer Mistake #2: Not considering long-term needs
Many buyers tend to consider their immediate needs when buying a new home. It’s important to think down the road a bit: will this space be enough if I get married? Have a child? What if I want to take on a roommate or move out and rent the place out? In addition, selling your home before the two-year mark means you pay capital gains on any profit. You also want to benefit from market appreciation and in order to do that you need to stay put for at least 2 – 3 years.
Buyer Mistake #3: Limiting your search to open houses, ads, or the Internet
Often, the syndicated web sites that feed from the Multiple Listing Service (MLS) are delayed by 48 hours (or more). Frequently, we get calls for listings that were previewed on a syndicated web site that are already under contract, and some have even closed already. For the most up-to-the-minute inventory, it’s best to work with a Realtor® who can set you up to receive automatic emails as soon as a property that meets your search criteria hits the market. In addition, we pride ourselves on letting our buyers know about private sales and pocket listings (those homes which are offered for sale, but are not advertised or placed in the MLS) Read my recent blog post about why you must know about pocket listings.
Buyer Mistake #4: Not having a home inspection
While buyers tend to focus on the floor plan, paint colors, and finishes when buying their new home, it’s crucial to make sure you are not buying a home that may be fraught with serious down the road. Once you have come to terms with a seller regarding price, closing date, and other terms, you have a short window of time to have a professional home inspector come out and inspect the major systems of your home. He/she will be looking for any structural, mechanical, electrical, plumbing, or environmental problems. (All things that may not be obvious to the untrained eye.) If the inspection report does not meet your approval, you have the option to negotiate the items in question or terminate the contract and have your earnest money deposit returned.
Buyer Mistake #5: Altering your credit profile during the buying process.
New credit cards, a new job, late payments on existing credit; all of these are things which can affect your credit prfile. Do not take out new credit during the home loan process, even if you are already pre-approved. Remember that lenders reject your loan at any time prior to the time that the funds are disbursed. Buying a new TV on a payment plan, leasing a new car, even test driving new cars at multiple dealerships or charging furniture before closing could jeopardize your loan. Opening up new lines of credit or increasing balances on existing lines of credit is harmful to your credit score. To be on the safe side, do not make changes to your credit profile until after closing. Also, don’t quit your job. A lender is not going to loan thousands of dollars to someone who is unemployed.
Buyer Mistake #6: Buying more than you can afford
Still want to go out to eat a few times a week? Take a vacation? Then don’t spend more than you need to. No one wants to be house poor! Your Realtor® and mortgage broker will counsel you, but the final decision is yours. Only spend what you are comfortable with.
Buyer Mistake #7: Not knowing total costs involved
It’s important to have a solid understanding from the very beginning how much money you will need for your entire home buying process: You will have your earnest money deposit, which counts towards your down payment. You’ll have a home inspection that you will pay for at the time of the inspection. Then there are escrow fees and closing costs. All these fees can be outlined for you when you sit down with your mortgage broker and Realtor®. Do not make a bid on any home until your agent has given you a “good faith estimate” of your closing costs.
Buyer Mistake #8: Purchasing a home with an incurable defect
You may love the space, the floor plan, finishes, and the proximity to all your favorite neighborhood amenities, but it’s important to think about resale value. Being right next to the freeway or alley, or situated on a busy street or intersection, or having power lines running next to your bedroom window or through your backyard, having a commercial or industrial property as your neighbor can make resale extremely difficult. Pay close attention to the Seller’s Disclosure Statement about any neighborhood noise or nuisance, and ask questions. Remember, what they disclose to you today, you will one day disclose to your buyer.
Buyer Mistake #9: Bidding before seeing a property CMA
Before making an offer to purchase a home, you must have an accurate idea of market value to ensure you do not overpay. Your Realtor® will prepare a comparative market analysis (CMA) showing comparable properties, what similar homes in the neighborhood have recently sold for and the recent price trends. Are you buying in an appreciating neighborhood or depreciating neighborhood? Will you be the most expensive home in an area of lesser properties? This is the same type of report the seller receives when deciding on an asking price. Isn’t it important for you to have access to the same information as the seller? Your Realtor® will give you all of this data, and interpret it for you.
Buyer Mistake #10: Not interviewing a Buyer’s Agent, or choosing a real estate agent who is not committed to forming a strong business relationship with you
Realtors® are like any people: some of them are going to innately understand your needs, and some of them aren’t. You want to find an agent you are comfortable with, and with whom you click; one who is experienced and knowledgeable about the type of property you want to purchase, and who is going to fight for you in the negotiations. After all, your agent’s objective is to get you your new home with the best terms possible. A great real estate agent is committed to using their experience gained through hundreds of successful negotiations to help you get the best possible terms. You need a professional Realtor® looking out for your best interests. Considering the importance of your home purchase, doing it by yourself can be an expensive mistake. An astute Realtor® has better information and valuable expertise to help you get the home you want. Use their expertise to your advantage. Read my recent blog post on the top 10 reasons you need a buyer’s agent.
Why You Should Care About Pocket Listings
March 18, 2009 by Debbie Bremner · View Comments
Secret Sales
I’ve been getting lots of mail recently, from homeowners and agents alike, asking why I bother to post information about “pocket listings”, those properties that are for sale, but not in the MLS. Even agents as far away as New York and Toronto have contacted me on Twitter and Facebook, asking why we seem to have so many pocket listings in Santa Monica, Brentwood, Westwood, and Beverly Hills.
But most importantly, what do all of these private sales mean to you, and the value of your home, as a seller, or as a buyer, or even just as a spectator? What do you need to know about the Westside market now?
In a recent blog post, “Appraisals Compromised due to Lack of Comps“, I spoke about the fact that appraisers in the Westside market have been hamstrung in their price justifications due to the dearth of good comparable sales. This has led to some questionable tactics in assessing value, not just for purchase money, but for refinances as well.
The Westside of Los Angeles has had a steadily percolating undercurrent of sales throughout the last 6 months, most of which have not made it into the MLS, a prime resource for appraisers and agents alike. If one is unaware of those private sales, they are missing vital information about the real complexion of the market now.
One interesting factor is the perception that “nothing is selling”, when in fact, quite a few homes sell each week through private sale. However, those properties will never have a sign, will never be advertised online or in the paper, so the general public may never know. There is more activity in the market than you may know. For you homeowners, this is a positive sign, and for you buyers, well, a change may be coming!
As a home buyer, you will want the opportunity to look at all properties on the market. You don’t want to be limited to re-sales, REO’s , or short sales. In fact, some of the best properties never see the general market. You must select a Realtor who knows intimately the specific areas you are looking for, and has access to those pocket listings. Regardless of what property you buy, you should have an accurate sense of the true value of the market and neighborhood, and knowing all of the sales s the only way to accomplish this.
As a homeowner, you must have this information to accurately assess your home’s value in this admittedly turbulent market. This is doubly true if you need to refinance your home, and your appraiser has no access to this hidden information. Before you select a mortgage broker, lender, or appraiser, as how they are tracking “pocket listings” and private sales. If you are about to put your home on the market, be sure the Realtor you choose has a good network that allows them to get access to this information. Ask the question up front, because the answer can be worth real dollars to you in the end.
Beautiful, Affordable Pocket Listing in Westwood
March 18, 2009 by Debbie Bremner · View Comments
A taste of Provence in an affordable Westwood home. Located south of Wilshire, minutes from UCLA and Westwood Villiage, this home is not only close to hip restaurants, shops and theaters, but is proud of its neighborhood public elementary school, which is one of the best in the City. This 3 bedroom, 3.5 bath home is offered at $1,499,000. The hose is approximately 2000 square feet, and the lot size is 50 x 130. Featuring Pierre Deaux fabrics, custom cabinets, etc. Tres chic!
For more information, contact Debbie Bremner @ TheBremnerGroup.com, 310-571-1364.
New Comstock Hills Pocket Listing in Westwood
March 17, 2009 by Debbie Bremner · View Comments
This elegant four-bedroom Spanish Revival home, meticulously restored and enlarged, is situated in the highly coveted Comstock Hills neighborhood within minutes to Century City, Beverly Hills and UCLA. Its seamless addition respects every detail of the original craftsmanship, replicating intricate archways and creating a magnificently tiled staircase with custom ironwork that winds its way through a rotunda to the second floor.
Sun floods the majestic living room articulated with carved beams and an exquisite original art glass window looking out to the garden. A formal dining room and breakfast room with vintage leaded glass cabinets open to the outdoors with French doors offering easy flow for entertaining to the front terrace and lawn with its skyline view of Century City. The glamorous kitchen with Carrara marble and wood block counters features all the appliances that an accomplished chef demands. It opens to an inviting tiled terrace ready for comfortable al fresco dining. The cozy library/den and family room both have French doors opening to inviting tiled terraces. The downstairs bathrooms have vintage light fixtures and exquisite tile work with an original sunburst window showing off the delightful powder room.
Three bedrooms comprise the second floor with the generous master enjoying garden views from a Juliet balcony. The large master bathroom in blazing white tile has a separate tub, extra large shower and double Cararra marble-top sinks mounted in antique stands. The second upstairs bathroom is beautifully tiled and has a large tub and generous separate shower.
The home contains outstanding custom cabinetry and a state of the art entertainment and security system and dual zone heat and air conditioning. A separate outside studio has been created as a home office.
The Comstock Hills neighborhood, east of Beverly Glen Blvd, is not only close to hip restaurants, shops and theaters, but is proud of its outstanding Fairburn Elementary School, one of the best in the City.
The home is offered for $3,195,000. Total bedrooms, 4, total baths, 3.5. The house is approximately 4,000 sq. ft., and the lot is approximately 6882 sq. ft.
Little Holmby Pocket Listing Sold
March 16, 2009 by Debbie Bremner · View Comments
What did the pocket listing at 10708 Le Conte sell for?
Elegant Corner Traditional
This property is a perfectly elegant Westwood picket-fenced charmer on a beautiful, sweeping corner lot. This rare, larger one-story home, built in 1939, has a gracious living room, built for grand entertaining and a nicely sized formal dining room. The family room leads through French doors to patio and pool. Updated Carrara marble kitchen with separate breakfast room also leads out to the yard. Lovely master suite with newer Carrara marble bath and lots of closets. Two additional bedroom suites, each with its own bath. The property was asking $2,600,000 as a pocket listing, and sold for $2,525,ooo. The house was listed as 3345 square feet per assessor, and the lot was 11,880 per assessor.
The private sales in Little Holmby, Westwood, and Brentwood are helping appraisers, who have a dearth of new data with which to appraise local properties. (See Appraisals compromised due to lack of comps)
New Little Holmby Pocket Listing
March 15, 2009 by Debbie Bremner · View Comments
A new opportunity is here in Little Holmby, not in the MLS. This house, on the market as a private sale, is approximately 4300 square feet. The lot is 13,800 and is gated. The house sits back from the street and is very private. A long drive takes you to a garage and there is also parking in the motor court.
The house has been recently remodeled within the past year. It is contemporary but with warmth (dark wood floors, stainless kitchen, beautiful tile work and granite in kitchen and baths). The ceilings are high and the rooms are big. There is a sun room, formal dining room, media room, breakfast area, family room and living room with balcony and steps down to the pool.
The pool has an entertainment room that supports it. There is a spa and fireplace outdoors with a small bedroom down stairs. The house could be 5 bedrooms but one of the bedrooms is currently used as a media room. The master is stunning, with a big bath with spa tub, steam shower and big closets. Warner Avenue School.
Offered at $3,695,000
Call for more details or a private showing.
