Tuesday, December 16, 2008

New Market Touchstones Part 4

While I spent lots of time fielding questions about architecture and details of the Carey/McDonald house during last weekend's West Adams holiday house tour, a few wanted to discuss the local-local real estate market.

"Transaction volume is up, considerably," I reported, "even as prices ease lower".
"But I thought people couldn't get loans," responded a bewildered few.
"Not only are people getting loans," I gushed, "they're getting the best loans I've ever seen, interest rates are in the low fives!"
Clearly flummoxed by Paulson's persuasions, a couple tour takers blinked, nodded dismissively and moved away. Another looked to his feet before adding, "you know, Paulson is a kind of poker chip." Turns out, one of the big poker chip manufacturers is named Paulson.

According to an escrow source, in 2008 nearly one residential purchase escrow in five failed. A marked increase over previous campaigns. The reasons? Financing for starters, which is why some bank owned properties accept only pre-approval lenders from designated brokers.

Plenty of properties get tripped up at the inspection stage too. Sellers are often less inclined to make repairs or grant credits, even of a reasonable amount, after accepting a lower than anticipated asking price. Simultaneously, despite supreme discounts, some buyers still feel entitled to a rash of repairs.

So contentious have these negotiations become, I even urged one buyer to conduct investigations outside of escrow. We then made an AS-IS offer, that was accepted despite its deep discounting, by a seller who preferred the AS-IS conceit.



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