Trulia

"Cry Havoc! and let slip the dawgs of war"

More on this later if I win, if not my fellow "dawgs" will go whimpering into the night.

Yes Neil, I know it's Dogs....I'm no "ienstine"

We're Number....

89!!!

Ok,
So a while ago we found out that we were in the top 20 agent wise in Coral Gables, today we were in the top 100 of all teams in Florida.

Congrats to Erica, Monica and Mike; nice job!

ABC's of Rental Scams

Let's start with the old saying "If it sounds to good to be true, it probably is" and if you practice this, no need to read any further.....

If not, here we go.

Apparently the "Nigerian Prince's" noticing a drop in participation of their ever popular "you are the winner/heir/long lost lover/UK funds scam, have decided like many scammer's before them to "Hell, let's get into the Florida Real Estate Gig"

And so they have Kiddies, this is how it works:

First it starts with a Realtor's Multiple Listing Service (MLS) and how we input our listings.
When we input our listings there is this "Magic" question button that states "OK to advertise" and if you say "Si/Yes", your listing goes viral and all sorts of Real Estate sites pick up the listings.

You as the Consumer are all excited cause you get to see the listing on your site of choice, like this one.

If we say "NO/No", (no is spelled the same in Spanish, only louder) the listing basically disappears from the world as you know it (WWW.something.com) and only well connected aliens can see your listing.

So; "Si" good, "No" bad.....cool?

BUT "Si" also brings in the "Prince's" and they promptly do the following.

They first "pirate" the listing and "Claim it" as their own (see MY listing at http://miami.craigslist.org/mdc/apa/2277115327.html ) then once claimed they make several notable changes;

First and foremost is PRICE, they change it to some ridiculous number that reflects what it would have rented at before the advent of running water and or electricity.

In our real example above, the home rents for 5000.00 and to make thing really uncomfortable for you, it's currently rented for a year (paid full in advance).

Second, they change the contact info to their brand new email address (see below).

Again in our real example; the previous tenants.

Third, they sit back and wait for you to call.

BUT how can they do this you say?

Simple as A, B, C....and even D.

A) They go on public records (very easy to do) and get the owners name.

B) They open an email address such as, I want all of your money@ cause you are very dumb . com

C) They pose as said owners with a variation of this story; "I am an astronaut and have been transferred to the moon, I need to rent my home ASAP."

D) They get you to send them dough for keys and the lease (they really are not on the moon)

How can I avoid such scams, you ask?

Well the obvious answer is hire a Realtor!

But in light of the fact that you probably like us as much as having a root canal another way is to just mention the word "Escrow" to your fair prince.

Yes Kiddies, just one magic word and your Prince will turn into a frog (no need to kiss).

It's Back!!!

"El Herald" was in my driveway this morning which only means one thing, SHE"S BACK!!!!!

Who is she?

My Mother in Law (MIL).

So after my annual Birthday/Christmas gift to me (she leaves to visit family in New Jersey for three months) American airlines will be depositing her at 5:30 pm. today.....

Spring has Sprung!

Price is Right....Final!

This is my last comment (probably not) on the Guessing Game AKA the "art of appraising".

Remember the first post on this series "Declining Market" well this from a recent guess by another "ACE" on one of my deals.

And I quote;

"the subjects sub market has been analyzed by trending indicators over the past 12 months. In the prior 7 to 12 months the prices were stable with little indications of a declining market.
However in the past 4 to 6 months showed market values as stable and in the current 3 months show that the market is still indicating signs of a stable market."

Ok folks full disclosure;
All 5 of the "price is right" stories happen this month (3/11).

The Declining Market and this Stable Market story happened a week apart and in the SAME neighborhood.

Hell, I even have an Increasing Market story done in February.

So what's it going to be Ace?

Declining?
Stable?
Increasing?

Good appraisers get it.

They understand the neighborhoods they are working and can value properties objectively but as more lenders use "in the queue" appraisers, all they are doing is slowing down a pent up housing recovery.

Just a thought.

Price is Right, part quattro....

By now you have pretty much guessed that I'm not very fond of appraisers nor their methods; it's not exact, it is an "art", they work for the Lenders and to them they hold true.

True story;
When I was taking my Real Estate licensing course, I was told that appraising was one of the 7 forms of Real estate that I could preform; meaning that as a licensed Realtor I can do appraisals legally (with some obvious exceptions).

Hell, Lenders reach out to us daily wanting us to do BPO's at a fraction of what it cost them to pay for appraisers on distressed properties.....so it's not like we don't know how to do these things.

So it's frustrating for us who practice Real estate full time to be at the mercy of folks who many times have no clue as to the market that they are appraising.

BTW; the ones who do know the market very RARELY miss the mark.

OK, enough bitching and lets get to the fun stuff.

4th appraisal story; a classic....

Another deal on the table and from the get go, you knew this deal was screwed; the way the agent was working the deal had all the makings of a train wreck waiting to happen.

Over and over again we heard "are you sure this will appraise" and over and over we said beats the hell out of us.

We had comps showing the value but again, we are at the mercy of "Ace"

So here comes Ace, promptly takes measurements/pictures and comes in 80k short.

Agent; "Told you it would not appraise"

Me; "Can I see appraisal?"

Agent; "Why"

Me; "So that you may cancel this contract (and get out of my life, cause we had a back up)"

Agent; "OK, but I told you it would not appraise"

Me; "Yeah, I get it"

Get the appraisal and all of the comps used are REO/Distressed sales even though our listing was not a distressed sale.....but wait it gets better.

Note: Appraisers also use current pending sales and actives to "justify" the guess.

Ace, apparently having way to many BPO's to do, just gave a quick looksy at these 2 and forgot to mention that the Pending sale that he used had been pending for over 400 days!!!

And the active was not active anymore (been taken off the market for a loan mod).

See we know this cause.....oh yeah we work the market full time.

So me being me, I just had to send this note to Mr. Agent (condensed version)

"Dear Mr. Agent,

Appraisal blows (for the above reason's) and you might want to look at page 6 of appraisal."

wait for it.....

Ace's License was expired!

Price is Right, part 3....

Up to now in our continuing series "the mysteries of appraising" we have discussed the following:
Declining Market (more on this topic Wednesday).

Cost as built "Hey you can't build that for what you sale comped it at"

And today we take a look at "Where did MY square footage go to?"

This one left me scratching my head for a couple of days and it's going to take a bit to explain...so here goes.

When appraisers "guess" at value, they often use other properties as comparable's and one of the main criteria used outside of Location and Bedrooms/Bath count is Square footage.

They diligently measure the home that they are appraising and compare it to others of the same/equal size.......and right about here is where it gets a bit dicey.

Now the way that they get the other square footage is by looking at public records which has 3 separate "square footage" listed for each property, they are:

Building/Living Area Sq Ft
Adjusted Sq Ft
Total Sq Ft

Building Sq Ft, assumes where you live; think what's under A/C

Adjusted Sq Ft, is some magical number that no one has ever figured out; it takes % of structures and adds it all up.

Total Sq Ft, is everything that you have "hardscaped", in short think concrete (if you live in little Havana, this includes the whole lot that has been paved over for parking and or illegal structures)

We good so far? Cool.......

Have a deal on the table and here comes "Ace" to do his thing; measures the place, takes some photos and away he goes.

Several days later and some anxious moments we get the appraisal and lo and behold we hit the sales number........hoo freaking ray!

BUT we notice a little (as in sq ft) missing.

The buyers home has lost some Sq Ft as compared to the tax sheet.....over 600 sq ft to be precise.

Where our Building SQ FT reads 2500, it reads on appraisal as 1900 sq ft...WTF?

Me; "Ace, what happened to my building/living sq ft?"

Ace; "Living means under A/C and you have 1900...I measured"

Me; "What about the other comps, how did you measure them?"

Ace; "I used the tax sheets Building Sq Ft"?

You know where this is going don't ya...........

Me; "Hey, but my "Tax sheet" said 2500"

Ace; "Huh"

AND there's my Aha moment; if he does not adjust the sq ft down, property comps at 500k and the folks at the bank say "WTF" and order a reappraisal.

Using this appraisers logic (HA) by adding the missing sq ft, my folks bought the property at 170 sq ft, when it comped at 205 a sq ft; in short they made 75k.

Declining market????

BTW; do you need a licesne to appraise?

Price is Right, part dos......

Ok, today we will tackle another favorite of mine in the continuing series "the price is right" AKA "the mystery of appraising".

This I know; Appraisals have three valuations (or wild guesses) they are:

Sales Comparable Approach
Cost Approach
Income approach

Yesterday we discussed Sales Comp approach and the declining market or there of.....

No one really has a clue as to how this works; kinda of like a TV without a remote control clicky thingy.

The story.

Have a nice home 1800 sq ft, 2/2 with a garage (in a depressed Hood) and it's listed under a 100k.
In Mee-am-mi this makes it one of the lowest priced homes known to mankind (outside of a 25k deal we are trying to close this week but that home is Especial) so I get it under contract at full price and here comes the appraiser.......

Me; "What do you think, Ace?"

Ace; "We'll see"

Me; "Oh well there goes this deal"

Ace; "Huh?"

"We'll see" never leads to anything positive in Real Estate.

Ace comes back at 82k, now remember that this home is in good shape, 1800 sq ft and has 2 bedrooms 2 baths and a large 1 car garage....in front of a park!!!

On this appraisal, Ace doesn't even ATTEMPT to use the Cost (as built ) approach.........wanna know why?

Cause he knew that building this home "as is" (termites and all) for under 200k was impossible even with our abundance of illegal labor!!!!!

So to keep it clean they simply "omit" this little point; how would you explain this small discrepancy to the underwriters?

"Well you see that the home is worth 80k but to build it would cost over 200k and you know that with the market in the third moon of Jupiter"............another WTF moment!

All my recent appraisals have comped higher in the Cost approach, even when depreciation is factored in (which is a big ugly number)

It's a shame that sellers have no recourse, but as I've mentioned before Appraisers get paid either way and lenders NEVER lose....

Monday we'll have a positive story; titled "Hey, do you know where my square footage is?"

If the wind blows...

And no weatherperson gets hysterical....did it really happen.

Today we had a nice little Blow to the tune of 50mile an hour gust and not a peep.

No, "holy shit we are all going to die moments"
No, "stock up on water/batteries/tuna fish"

No Nada.....

Gosh how I miss Hurricane season!

Price is right!

Let's discuss my favorite mystery in the Real Estate gig........you guess it "kitty cats"!

So we have four stories to tell....hmm which one first?

The missing square footage?
The Declining market?
The "you can't build it for that price?"

Or the EXPIRED license!!!!

A series, we'll start with my favorite "the declining market"

As I have mentioned several times Mee-Am-Mi is a BIG @#$%^& place and what is declining in one place does not mean it's declining in another.

Sold a home, went to the appraisal and literally handed the appraiser a previous appraisal indicating value at the current sale price.

The dude thanked me and promptly proceeded to value the property 36k under sale price.

WTF, why the difference?

Declining value in the neighborhood......Really?

Me; "So where do you live Ace?"

Ace; "Kendall"

Me; "Ever try to buy a place in the Grove"

Ace; "No, I can't afford it"

Me; "So what makes you think this market is declining?"

Ace; "I have a license and I read it somewhere?"

Me; "How much to you get paid?"

Ace; "Huh?"

Official verbiage from appraisal explaining something; HUH stuff in Bold......

• Market Conditions Addendum to the Appraisal Report : Foreclosure/REO Sales in the Market

The appraiser has reviewed closed sales over the last 12 months, as well as, current available listings from within the subject's market area. The analysis indicated approximately 63 closed sales over the past 12 months. Only 5 were found to be REO/foreclosure sales, which equates to approximately 8% of all sales. There are currently 87 active listings in the subject's
market area.

1 was found to be REO/foreclosure listings. This equates to approximately 1% of all listings. Thus, REO/foreclosure activity is not considered prevalent at this time. As such, no REO/foreclosure sales or listings were included in this appraisal.


Now wait for it................................


However, the presence of these types of transactions do appear to be placing additional downward pressure on sales prices, as well as increasing typical marketing times.

And there is my ah ha moment...it's a declining market because of something that has not happened yet!

End of story, you ask?

Nah.

The Buyer realizing that the appraiser was clueless, paid what the "As built" price was which was much higher then the appraised price.

Why you may ask?

Cause they don't live in Kendall, They have been shopping for over 6 months and they REALLY know what is declining and what is not.

Which leads me to "As Built"........to be continued.

First of all...

In Reply to Riley Smith's (EWM) assertion that he had to drag me over the finish line on his latest blog post; well that's only true because the longest training run we did was 22 miles and he "just forgot" to mention that there were 4.2 more miles in the actual marathon; boy was that a surprise!

OK Quick recap on his post;

I have a property under contract in North Grove and Riley and I are always kidding each other on where we can list/buy properties.

When Riley, as a well known collector of fine properties in The North Grove found out that I had sold something in his Hood, he called the listing agent Carleen Smith (EWM) and gave her a hard time about me selling something there without him knowing; something about right of first refusal.....

So I just had to come up with something.

And just to be clear, I don't think this addendum is in "Forms simplicity" NOR is it approved by FAR BAR


The best was Carleen's call later in the day; "Are you serious Jav, I framing this addendum"

Lot's of good stuff going on in Coconut Grove, come on down and check us out.

Woke up....

To this question today;

"Jav, what do you consider the top three best condo investments in sobe?"

Wow, that is a toughie so early in the morning....and my blog post for today.

Below was my reply:

"I personally don’t see condos as investments period because of the volatility of the product.
Several factors can come into play that you cannot control in the condo gig.

First and foremost is the association and how well/honest they run the building; lots of folks don’t look at this.

From first hand experience, every time I have a board meeting 10 out of 238 folks show up.

With that said, it might be because we have not had any special assessments nor maintenance hikes in 4 years and the folks are happy but still most unit owners are not involved and if just several board members get together for their personal agendas you could have huge ramifications.

I’ve seen great buildings completely tank just cause of one missed insurance payment or simple board infighting.

Second you are enclosed in a fixed market at all times and are at the mercy of the other unit owners.

Example;
You own unit 123 on the 3 line.
The unit owner above you decides that he hates everyone and dumps his unit at 10 dollars…..guess what your unit just priced out at?

Or you have a special assessment and several unit owners say “screw this, I’m out a here” and then you have downward pressure on the whole building.

So investment….None.

Place to live; plenty it’s just a matter of finding what/where you like.

I know it might sound like a copout but all buildings are good and bad; it’s about your needs."

I truly mean this....Oh, and keep looking to your left, we're adding new fun content every couple of days.