An REO is a foreclosure-gone-bad. This is how I see it. The acronym stands for Real Estate Owned, which really doesn’t convey the true meaning of the term. In fact an REO is a real property that is now owned by the bank, or the mortgage company or the financial institution after an unsuccessful foreclosure sale attempts. Perhaps it should be called BO property—Bank Owned? Or perhaps FGB—Foreclosure Gone Bad? That, however, is beside the point. Let us stick to REO. I was just thinking aloud.

Foreclosure:
When a property is foreclosed, the financial institution puts it up for auction. The starting bid for the property normally begins at the sum of the loan balance plus any liens plus major repair costs plus over-due fees plus any costs that may set back the bank, will be included in the minimum starting bid amount. There are times that the bank puts up the property for auction ‘as is’. Meaning possible repairs, possible legal claims on the property including legal fees, even living-in tenants will be left for the successful bidder to deal with. The bidder or the potential buyer doesn’t know any of these – Read a true situation.

Normally foreclosures in Irvine are quite attractive and sometimes mouth-watering, and I must say, in a number of cases, the properties are quite attractive for their asking prices. But the coin has two sides; bidding blindly may be hazardous to your pocketbook.

REO:
Now that the financial institution has failed to receive a bid during a foreclosure auction, the property reverts back to it [the financial institution]. That is, the bank owns it. In effect, the sale of the property now will resemble a normal sale, as though an owner is selling his/her property. The buyer has the opportunity to inspect the property, do a pest inspection, appraisal, ask the bank to make necessary repairs, make offer and counter-offer and normally go through the same traditional home buying routines, with ONE BIG DIFFERENCE! A seasoned Irvine real estate purchaser asks the million-dollar-question: Why has this property become an REO? Is there anything wrong with it? Why have the potential buyers shied away from it?

The answer to this question maybe two-folds:
1- The property is a lemon (normally the case, or a potential money pit)
2- The property is grossly missed and overlooked (highly unlikely but possible).
The Irvine real estate purchaser of an REO, therefore, must do his/her homework thoroughly.

Because the lender is selling the property as an REO and provides the buyer with the opportunity of all inspections, an REO sale price is competitive and close to the current market value and the buyer’s offer should not deviate grossly from it. But remember to ask that million-dollar question, anyway.

Also, a slight point of leverage the buyer may have is the fact that the bank desperately wants to unload its REOs. They are like thorns on their sides. They may not show it but you, as a buyer, must know it, and also let them know that you know it. And, with a bit of good luck and a lot of homework, you might have the deal of the decade.

A brief statistics:
As of 09/03/2008 Orange County’s inventory on real estate foreclosures and auctions are close to 6,000 units (homes, condos, townhouses, etc.). And as of the same date, Irvine foreclosures and auctions tops 250 units (slightly over 4%).

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.
The Mack Team
Robert & Tania Mack
Century21 Professionals
Irvine, Orange County, California
http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – REO properties vs. foreclosure is a post from:

Your personal character plays an integral part in renting out your Irvine property to total strangers. You have no idea who the tenants are, therefore you take a risk. To minimize this risk, you have their credits, places of employment and monthly incomes checked, and perhaps interview them personally in order to build an impression, a feeling, if you will. To further minimize this risk, you ask for the first month’s rent as deposit, to be paid back in whole or in part depending on the final condition of the property as they vacate it. Tenants can be courteous and understanding; some may be a pain, and if you don’t have the personal character to deal with troublesome ones, then you shouldn’t consider renting out. When you rent out a property it becomes an investment property. You cannot always expect ideal conditions. You must be prepared for headaches, which come with the territory. Fortunately renting in Irvine, compared with other areas, seems to attract more desirables than otherwise.

The Mack Team does leasing as well as selling and buying properties for clients. I am happy to say that all the clients we have helped lease so far we have not yet heard a complaint. In fact in two occasions, we have received letters of complements in selecting the right tenants. I don’t want to sound over-confident because, given time, we are more likely to come face to face with an undesirable one. We have learned—and are still learning—from the past experiences of other agents who normally tend to concentrate on couples, or couples with children, or couples that are brothers and sisters or friends, rather than a single person. There is nothing wrong to lease your property to a single person, as far as we are concerned, but some of our colleagues in the profession believe singles carry more risks than couples. I am yet to digest this latter statement.

But no matter what, over time, renting is one of the best ways to increase your monthly cash flow. And also, over time, the advantages overweigh the disadvantages, but remember; you must have the character to deal with undesirable situations. If you don’t have the character and still want to be a landlord or a landlady, I’d suggest you hire an experienced property manager to handle problems, repairs and complaints. It may cost you a penny or two, though.

Advantages

- It pays, or mostly pays, your mortgage on the property. This is a huge advantage, and this alone may offset several disadvantages

- Tax breaks in the form of claiming depreciation, repair costs, maintenance, etc. (consult your accountant for details)

- In a long run, property appreciates annually, thereby increasing your equity as it sits and generates funds on both fronts.

Drawbacks

- Dealing with incessant tenant complaints

- Late payments
- Delinquent tenants

- Property damage

- Noisy tenants and complaints from the neighbors

- Without permission, boarding other ‘tenants’ and over-crowding the premises.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County

http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Renting out your property – pros and cons is a post from:

For an investor in Irvine properties there is no such thing as bad times. Fluctuating times, yes, but not bad times. An established investor harvests his or her crop during sellers’ market period and sows the seeds during buyers’ market time. The only drawback may be the ability to forecast Irvine real estate market situation. Educated guesses based on history may be a good practice but not fool-proof, same with current trends. We don’t know when this trend may change direction and to what degree. Every five or six years the real estate market takes half an oscillating turn—for better or for worse. In most cases Irvine property owners are generally winners for obvious reasons. Exceptions may be: medical reasons, divorce, moving, disagreement between partners and in rare cases, natural disasters not covered or only partially covered by insurance.

I don’t encourage folks to commit themselves if, for any reason, they cannot meet the subsequent responsibilities of property ownership. It has its headaches: property management costs, incessant tenant complaints and repairs, association fees where applies, possible vandalism after the tenant vacates, Orange County property taxes, and the monster of them all: delinquent tenants. It takes a down-to-earth like character to deal with such ordeals. If you don’t have it, I’d suggest you keep your 9-5 position with your employer. On the other hand, if you have it you will eventually reap the results and smile all the way to the bank. Oops! Did I say bank? Yuk! I hate that word; I mean reinvest in bricks, mortar and iron and plenty of two by fours.
Views, comments, responses and constructive criticisms are welcome.
Make it a great day.

The Mack Team
Robert & Tania Mack
 Century21 Professionals 
Irvine, Orange County

http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – When to buy property is a post from:

I don’t want to insult the intelligence of the reader, but there are folks who don’t know what foreclosures mean, and for the benefit of those few I would like to define this term in the layman’s language. When one borrows money from a financial institution to purchase a property and for some reason or other that individual is unable to pay it back, with interest, on agreed monthly intervals and amounts, the bank or the financial institution has no other alternatives but to take the property away from the owner. This action is called foreclosure. Irvine Foreclosures are not only dire for the owners but also for the lenders. Both parties lose. The only winner may be the third party who eventually buys the property at a bargain price.

Let’s face it; the banks are in it for a good chunk of profit. And also, without them [banks] most of us won’t be able to afford living in our own Irvine homes. A $500,000 loan balance at 6% over 30 years will cost you an additional $579,000 in interest only. That is, the bank will make an average of just over $1,600 a month on interest only over that period. In most cases they make good loans, but occasionally a bad one slips through their fingers, and they’ll have to deal with it, even at the cost of a few hundred thousand dollars. They don’t need the headaches and is not worth their efforts. They have plenty and a few hundred thousand will only make a small ripple in their financial bucket.

Ever since mid to late-2006 the rate of Irvine foreclosures has gradually increased to a new high. Lenders are overwhelmed with it. Not that they made bad loans but mostly due to hard economic times, unforeseen layoffs and unemployment are substantial contributing factors. The financial institutions cannot find enough time to process foreclosures in timely fashion. Most use their own escrow and title insurance companies. They make frequent errors (errors are inevitable and sometimes cannot be avoided) and if one is not careful one will pay for it—be it the lender or the borrower. In fact in couple of occasions I found gross errors to the disadvantage of my clients. They [escrows] are antsy and on the edge these days. The workload has taken its toll on them. We, The Mack Team, at Century21 Professionals in Irvine, make a diligent effort to go over our client’s final escrow closing statement, if asked, to ensure they are treated fairly and squarely.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County

http://www.irvinerealestatelink.com

Irvine Real Estate link, CA – Banks and foreclosures is a post from:

As we are all aware of the slow real estate pace not only in Irvine, Orange County, but across the board, many brokers and real estate professionals believe in changing course in order to put bread on their tables. Some may not be as hasty as to quit the trade altogether yet others simply give in and change direction. In fact the business of selling/buying real property maybe best realized in hard times such as what we are having today, if you are willing to put your heart into it. Yes, it is a huge buyers’ market, yes; the real property values are not only stagnant but in many cases have dropped; yes, the budget deficit is now approaching half a trillion dollars; yes, the financial institutions and banks are foreclosing on homeowners who cannot meet their periodic responsibilities, and yes, the gasoline prices have over doubled in the past eight months or so. But is this a reason to feel panicky? Not necessarily. To overcome such adverse economic state of affairs you, as an Irvine real estate professional, must change accordingly to possibly offset such adversities. Buyers think twice, many times, during the course of their search for an ideal home before they are committed. Even a simple grocery shopping is calculated nowadays.

My wife and I like entertainment and eating out, especially after a wearing day. A lot of people do. Instead of going to the movies once a week we go once a month or once a fortnight, same with restaurants. Our shopping trips are calculated so as not to waste energy. Let alone buying a house. I’m talking about middle to upper-middle class Americans, not the millionaires; they have no worries—in most cases. When the time comes to pay our semi-annual Irvine property taxes we get our knickers in the twist, yet we don’t think about it during the year and spend where unnecessary. You may think I am contradicting myself in this last statement but there are such people. People who own property and fall behind their payments. The latter class of people, like the millionaires, is at the other end of the spectrum. In order to survive and hopefully be successful we must learn to compromise.

Today’s Irvine real estate situation is in the form of Buyer’s Market and at the same time, the sellers are not willing to part with a great chunk of their equity. There is an abundance of homes for sale. Unfortunately only a fraction of it will eventually be sold. These days, even buyers are not willing to commit themselves. The situation is somewhat weird but what is it that hinders the market so strongly? If you said that it is the economic circumstances you are only half right. The other half of the reason is simply fear. The fear of uncertainty. “Will my job last?” “God forbid, will I be sick and accumulate hospital bills?” “By the time we settle in our new home, will my job require me to transfer to a different state?” “Perhaps if I wait a little prices and rates may fall further”. These are quite valid concerns. Here is where the agent shows his or her initiative to reason with the potential buyer. To use the training and experience he or she has received in closing the deal. To turn these negatives into possible positives. To convince, with reason, as to why wait any longer and possibly loose a great deal with no guarantees as to what tomorrow may bring. The agent’s initiative is of utmost importance in ascertaining how desperate the buyer/seller is. This is a vital piece information that must be handled with great subtlety and be used as a decision-making factor.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team
Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California.

http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Effects of adverse economic situation is a post from:

If—and this is a BIG if—you are able to choose the right real estate professional, commonly known as agent or broker, might make a world of difference in your endeavors in purchasing your Irvine home. But how does one do that? To be quite frank with you, I don’t know the exact answer myself, it is a difficult chore. I can easily say: “I am good, select me”. “I guarantee to give you service you deserve”. “I’ll work hard for you to get you your home; I’ve done it before, trust me”. “I’ll give you a good deal on the commission”. Blah, blah, blah… boooooooriiiiiiiiing!

One of the indications, again, this is not fool proof, is past history. But can one bring oneself as to be bold enough to ask such a forward question? I’d say yes, especially today, especially the way the Irvine real estate market is behaving now. Many years ago, probably not. If the agent has nothing to worry about he or she would concur. Some may take offence. Not today, the agent can’t afford to take offence if he or she plans to close the appointment.

Apart from history, one can interview several agents from different, or even the same, brokerage firms and put the same questions to each and everyone of them, at different times of course, and study their responses, study their body language, try and capture wasted words, such as “you can’t loose with me” or—the one I dearly hate—“trust me”, and such. A seasoned Irvine realtor would listen more and talk less and when he or she talks would be concise, brief and to the point, giving you ample opportunities to ask questions. Being informative and helpful, subtle smiles, not pushy, never desperate-looking… you get the drift, I’m sure.

But the most common way to know that you may be in the right hands is either by referral by someone that you know and trust, or someone that you have done business with before satisfactorily. Today, you, as a buyer, can be choosy, you have the leverage on your agent and your agent has leverage on the seller’s agent.

I used to operate as a single agent, but today my wife helps me and we are a team in the real estate profession. One of the advantages of being a team, especially husband and wife, people seem to put more trust in you. When we appear in front of a prospective Irvine homebuyer or seller, I’ve noticed their almost-immediate desire to work with us. They seem to be feeling safe to do business with a team. “If he is not available, perhaps the partner can help or vice versa”, they may think.

So, do your part the best you can in selecting your agent. However, let me give you an important piece of advice: Do not base your selection criterion(a) solely on how much property this agent has sold or bought in the past, even though it may be a desirable factor in your decision-making. I leave the reason for this to the reader’s learned imagination.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California

http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Choosing the right agent is a post from:

Relatively speaking, Irvine is a new city within the bounds of Orange County. I don’t intend to tire the reader with facts and statistics about the city; rather I’d like to put these facts and some of these statistics not in the form of sentences in paragraphs but as bullet points for quick visual reference.
- City of Irvine was established on December 28th 1971

- Ample land still available for construction

- Irvine population is about 200,000 (2008 data)
Area is approximately 70 square miles
- Has low crime rate when compared with cities of similar population (FBI stats)
- Irvine parks are numerous – even a dog park (Central Bark)
- Irvine *Subsidized shuttle access allows commuters from Metrolink train station to use the shuttle to various points in the city
- The city thrives on being clean
- Irvine high school standards are exceptionally high (one of the major attractions)
- Home of the prestigious UC Irvine
- Has strong and serious law enforcement department
- Clean and modern shopping malls and entertainment centers
- Wide and patch-free streets and roadways
- Easy access to interstates 5 and 405
- Majority of residences in Irvine fall under some sort of property management system, ensuring manicured lawns, trimmed trees, community swimming pools, maintenance of plants and shrubberies around individual properties.
- Most prominent and established businesses have headquarters or branches in the city
- A short drive to the beach
- A short drive to Disneyland
- Annual summer entertainment with The Great Park Connection.
*
$1 charge beginning 2009
Irvine is bordered with the following cities:

Tustin

Newport Beach

Santa Ana

Lake Forest

Aliso Viejo

Costa Mesa
CNNMoney.com says…
More…

Views, comments, responses and constructive criticisms are welcome.
Make it a great day.

The Mack Team
Robert & Tania Mack

Century21 Professionals

Irvine, Orange County
http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Why consider buying property in Irvine? is a post from:

Although this doesn’t happen frequently but a property tax mix-up may generate a tremendous headache for the new Irvine home buyer. What I’m about to convey to my readers is a true story and a sad and frustrating at that. It might be to the reader’s advantage to read through.

An Irvine foreclosed property was purchased by an acquaintance of mine who was helped by a fellow real estate professional in January of 2008. This property was originally purchased for close to $700,000 a few years earlier. After foreclosure my acquaintance purchased it from the bank for only $525,000 (indeed a great deal), and not to mention that the previous owners blocked all the toilets with concrete, broke a few windows, took all the appliances and irreparably destroyed the beautiful hardwood floor covering and host of other acts of loathing, ill feeling and bitterness. But that’s beside the point. Nothing that $15,000 wouldn’t fix.

The escrow papers looked fine and everything was finished and the house belonged to them. But a month later they received a tax bill from Orange County telling them that they are delinquent for 2007 taxes. “For heaven’s sake!” He complained, “I never owned the property in 2007!”

The amount was a bit over $6,500 and included a bundle of penalty for non-payment in time. He said he’d checked his final escrow closing statement, which seemed to be in order. “On top of that,” He raised his voice, “I am due a refund of supplementary taxes because I paid less than for what it was worth.” He contacted the Orange County Assessor and explained the situation in a rather heated manner. Later he said: “The County doesn’t give a monkey who owns the property, they want their taxes.” So he finally, after a few phone calls and several letters, paid the outstanding taxes. Now he is fighting with the County for his money back, the penalty back and a refund of the supplementary tax.

Now, I ask. Who is at fault here? The County? My acquaintance? The bank? The escrow and/or the title insurance company? But if you said the original defaulted Irvine homeowners, you are absolutely right, but how will that help the new owner? They’re long gone! However, the title search should have been able to catch such things, don’t you think?

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California.

http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – New home buyers and property tax blunders is a post from:

We live in the age of web technology where the space around us is filled with trillions of fast-traveling morsels of data called information. The web allows us to access such information almost immediately by a few strokes of the keyboard. One piece of information that may be useful to a potential buyer of a piece of real estate is the status of its property taxes. This information is particularly useful before the potential Irvine homeowner makes a commitment in purchasing. The County has no mercy; the taxes must be paid, and in case of late payments stiff penalties are imposed.

checking the status of your Irvine property taxes in Orange County, California, is via the internet. The status of your property taxes is public information. Although no names will appear as you view it, but you can find out how much your neighbor is paying, all you have to do is enter the street address, city and zip, then voila! You don’t even require knowing the parcel number.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.
The Mack Team
Robert & Tania Mack
Century21 Professionals
Irvine, Orange County, California.
http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Status of your property taxes on-line is a post from:

My wife and I are a team, The Mack Team, and live in Northpark Square in Irvine. We mainly concentrate on Orange County, specifically Irvine homes, and hardly deviate from this area. This is not to say that we will not consider other close by areas, but to say that our main focus is on a small group of prospects in the area who may need guidance and assistance in purchasing a new home or selling their existing one. Remember, a property is not a pair of shoes that one may spend ten minutes deciding whether or not to buy it, it is a dream. It is something that you and your family will spend many years in it. You want it conveniently located near schools, shopping centers and places of entertainment. You want it to be comfortable.
Like many other areas, Irvine property inventory is quite large. Buyers have the leverage these days, and in most cases they [buyers] can afford to dictate the terms, and usually get away with it. Therefore, an Irvine real estate agent should not press so hard and be pushy.

The Mack Team of Century21 professionals understands that. It commits itself on spending time with potential customers, and we do mean it sincerely. As the economic situation deteriorates, we, as real estate professionals, must work harder to acquire the trust of our customers. Forging a strong bond between us, even if the potential Irvine home buyer shows signs of skepticism, we should appreciate their concerns and put them at ease instead of seeing dollars slipping away, which is the worst thing an agent can feel and especially show it. And let me tell you something: the prospective buyer is smart enough to see and feel the negative vibrations in their agent.
Don’t think about the gas prices. Let them hop into your car, show them other properties, feel at ease, and make them feel at ease. Suggest other areas in irvine, stop at a convenient café and offer them a soda or a coffee and pastry. Discuss your business at the sidewalk café. You will be surprised what this spontaneous action and your meager ten-dollar hospitality can do for your business. And even if they are not still able to come to a solid conclusion and you have done your best to hook them up, do not press—remember they can read your countenance—put the situation on the back burner, for a while. If they really are interested in a property they will come back to you because you have already proven yourself worthy, you have built a rapport, you have paved the way and all they have to do is to walk on it. It is almost impossible for that prospective buyer to engage another agent. Don’t be a sore looser by showing your contempt for spending time and money in vain. Change your tactics, and subtly suggest Irvine foreclosure properties, although dealing with foreclosures may be somewhat of a headache for both the agent and the buyer, but the outcome may be quite rewarding.
Bullshitting definitely will not work, showing a lot of teeth and ear-to-ear smiles are also a no no, unless honestly displayed and only if the situation calls for. Do not press, do not feel desperate, do not hand out more than one business card unless you are specifically asked for more, do not overwhelm them with futile real estate statistics.
The prospective buyer knows how much money and time you spend on them showing properties, they appreciate it without your telling them. End the tour with them on good terms, no matter what the outcome. Think of possible comebacks and referrals. (Please see my Weblog titled: After Close of Escrow).
Views, comments, responses and constructive criticisms are welcome.

Make it a great day.
The Mack Team
Robert & Tania Mack
Century21 Professionals
Irvine, Orange County, California.
http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Prospective Irvine home buyers is a post from: