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Ask The Realtor

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As printed in the OC Register / Saddleback Valley News

Written by Jim E. Flynn, Century 21 Beachside Realtors, Lake Mission Viejo

Feb. 2, 2010

Bidding Wars Increase as Foreclosures Decrease

Q. Wayne from Mission Viejo asked: Jim, tell me about the Real Estate market now, I am reading that foreclosures are not as big a factor as they were but, I am also seeing from my research on line that the properties that are price right are already sold or, have 3 to 6 offers already on them ?

A. Your information is correct Wayne. Foreclosures in the coastal markets of California have improved for the better compared to inland markets. And here in Orange County, the total number of foreclosures for January were cut just bout in half to 20.6% of all single family sales, according to Zillow.

So, the second part of your question is that ….Supply and Demand.. is still most often the basic barometer for Real Estate activity. The supply of correctly priced and correctly marketed homes did shrink but, the demand actually increased and those dreaded bidding wars have come back in some areas of Orange County. Michael Caruso, an established/highly respected professional was quoted in a Realtor Email Bulletin I recently read, He reported that one of his good clients , an Orange County Graphics designer put in one of 37 offers on a three-bedroom, two-bath home listed for $350,000 in early September. He bid full price for the home in Mission Viejo, and offered to put 20% down, but the winning bid went over $430,000 or, 123% of the full asking price. Many Realtors in our Century 21 Beachside office report similar stories about their clients getting outbid for several offers. Certainly that can get discouraging Wayne and the proven solution if, you do not want to play the waiting and bidding war is to have your Realtor find you properties that are priced closer to what the Market indicates and then get your offer in as soon as possible. Unfortunately, properties that are listed much lower than the market price may just be priced that way to generate “bidding wars” and if there are 37 offers on a property like the example indicated, you will need to be an ALL cash buyer with proof of funds and a respectable “Fico score and quite possible 23 to 30- percent above full asking price.


As-Is Property

Q. Sally from Lake Forest questioned about her friends saying they would never sign a contract for an “AS IS” property.  And asked is there a standard for with an “As-Is” in the title.

A. C.A.R. the California Association of Realtors currently does not have a standard form with the words, "As Is," in the title. Members have reported that certain investor buyers use a standard form "As-Is Contract for Sale and Purchase" which fraudulently purports to be approved by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). This standard form agreement has been used by Greenhills Financial Investment, LLC, among others. C.A.R.'s Legal Department is vigilantly pursuing this matter, which includes issuing cease-and-desist letters against anyone using the form.

The "As-Is Contract for Sale and Purchase" form, which is referenced at the bottom as "FAR/BAR ASIS," has apparently been patterned after Florida Association of REALTORS®'s purchase agreement

Jim is an award winning Realtor with Century 21 Beachside in Mission Viejo, CA.

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Jim E. Flynn
CalBRE license #: 01215480

Phone: (949)  463-0739