First, if you don’t live here, and maybe are out of town and on this site because you are planning on relocating to Cleveland,  West Park encompasses a few  official neighborhoods West of Downtown Cleveland. We stretch from the Fairview Park border on the West, Lakewood on the North, and West 117th St. on the East and all the way South to Brookpark.  Yep, it’s a big area!  For more info on this great neighborhood (I do like it here,  both working and living in the ‘hood) you can go to History of West Park website.

Reminder, these home stats deal with homes sold through area brokerages within the last six months. Let’s do zip code 44111 to start.  I’m analyzing single family homes exclusively.

There are only  162 homes for sale in the entire zip code.  The average list price is $82,000 or $60 a square foot.  The good news? There are 62 homes under contract right now.  That means 62 people recently decided to take root here.  21 of these homes are the most recent because they are contingent (meaning people are getting loans approved or doing their inspections).  There are 41 homes in this group waiting to close or pending, meaning they have all contingencies removed.  62 is a healthy number, from my professional point of view.  The highest listing prices (we don’t know sale prices yet because the homes are not title transferred)  for these 52 homes was $88,000.

There were homes sold, as has been the case for the past few years, uner $80k. The good news is, there were only about four homes in really low sale prices.  About 30 more undfer $80k.  More good news: there were 15 homes sold between $80,000 and $99,000. There were 21 homes sold with sale prices of $100,000 or more!  This is good news, because even on the ‘numbered’ streets in this zip code, home prices have (at times) increased closer to what we would all consider a reasonable market value.  If you look at the total sales, the average sale price was $55,877. (there was a time when it was around $41,000).  So even though you might look at this and say wow, that’s still low, at least it’s up overall. 

The highest sale prices were for three homes that sold for more than $200k.  One on Amber, one on Ernadale, one on West Park. 

There were homes, for example, South of Lorain and North of Puritas, on numbered streets, that sold between $100k and $115k.  This hadn’t happened in a few years.  What did they have that warranted this sale price? More than one bathroom, at least 3 bedrooms, and almost all of them in move in condition with no need to update kitchens or baths.

Tomorrow I will post the figures for zip code 44135.

3C

I went to the Goldman Sachs site and the video on this page is a good overview. The premise makes sense.  So many talented people want their own busiensses. The devil is in the details.  How do you focus on all that needs to be done? Do you even know all the key things you should be doing as a business owner? One guy in the video hits a crucial area that can cause businesses to fail: you try to do it all yourself instead of figuring out your true strengths and then delegating other portions of the responsibilities. 

My favorite coverage of the story comes from Inc.com.  (older article)

So it’s basically a program divided up in each city like this: Some money for community colleges to teach the business programs, some for  community development organizations in each City and some in the form of grant money for individual business people to participate.  When it first got started (sounds like 2010)  it was a $500 mil program. Is it down to $15 mil or is that just what Cleveland will get? I haven’t quite figured that out yet but anyway, this is the initial breakdown of the information.

 Goldman Sachs, one of the ‘big guys’,  is providing the money (of course, who else has it?)  The argument goes, large businesses are the ones who create the most jobs.  Or if you are on the other side, small businesses are the backbone of the Country.  So one side of the argument is helping the other.  Seems karmic and ironic at the same time.

3C

You know you have to apply for a mortgage loan and that your lender will be asking you for pertinent information so the loan can go to underwriting and you can buy your home! What you may not know is that there are deadlines both you and your lender need to meet in order to make things happen 1) smoothly and 2) legally.  It’s the ‘legally’ part that can get glossed over.  You’d think not but it does.

Our purchase offers state (on the first page) all the pertinent financial information. What is the offer price, how much good faith earnest money are you offering the sellers up front, how much is your downpayment, is it a conventional loan, cash or an FHA/VA loan? 

Then, the offer states you will do your due diligence as a buyer and apply for your loan within ____ number of days after it becomes a fully accepted offer between you and the sellers.  Usually it is five days (sometimes 7) which means you are applying for your loan in a timely fashion.  I’m sure all that makes sense.

Then there is another date.  It states the lender, your lender, will also do her/his due diligence and let all parties know that a preliminary loan approval  has taken  place.  This means you’ve applied, you may have some conditions to meet in order for the loan to become final (paperwork provided, etc), but that once these conditions are met the loan will be moving forward in underwriting waiting for the closing.

There is an amount of time (numerical) that gets written into the purchase offer on this line.  I check with the mortgage lender (usually our finance manager) to see what that number should realistically be.  21 days has become a bit optimistic but 28 days is  more comfortable or 30 days.  Again, this does not mean total loan approval.  Here is what it does mean:

1.  Your lender is actually working on your loan.  Sound cynical? I’ve been on the ‘listing agent’ side working with sellers when no matter how many times I prod the buyer’s lender or their agents, this contractual preliminary loan approval date comes and goes and wouldn’t you know it,  many lenders do not pay attention to this date.  I say you, the buyer, have more power than anyone to make sure your lenders are working for you and meeting this date. Technically, if they do not? The sellers can say you are out of contract. 

2.  If a lender is unclear about newer banking regulations and waits too long to start working on your loan, it can not only hold up your closing dates but you might find out you can’t get that loan after all.  You’ve already started packing, buying rugs, setting up movers.  So have the sellers.  I had a closing delayed two extra weeks (which is lucky considering the lender realized his error two days before the original closing date) because of a switch from a Conventional to FHA loan.  You do not want this to happen to you.  And believe me, the people selling the home you want to buy? They are not going to be happy either.

3.  Inspections are set up so that they are done within the first 7 to 10 days (customary practice in NE Ohio).  This is important for several reasons but also because many lenders will hold up ordering an appraisal for your loan until the inspection is done, and both sides are agreed upon the terms of the inspection contingency removal.  If this all takes 20 days, imagine that your lender is not going to be able to meet this this preliminary loan approval date easily if at all.  What is required though, is that all parties be kept in the loop of what is transpiring.  If the closing date has to be changed, so be it.  But surprises are not good.

And one of the reasons not acceptable for any reason is that the lender misses this date which every party has agreed will be met.

Does this make sense?  I’m telling you this because I do believe you, as the person contracted with the lender, have the most power to make sure your lender is doing things in a timely fashion.  I’m not suggesting you call them every 48 hrs to hound them about progress.  But until you know that they are going to be able to meet their contractual obligations, a call at the beginning and end of each week (or whenever you are talking to them anyway), is a good idea.  Keep your agent informed as well.  Your agent (and the listing agent) should have the ability to contact the lender and receive their telephone number and email on the pre approval letter you submit with your offer. 

I wish it was possible to just say that everyone does their work and you can sit back and relax, and 75% of the time, that is correct.  But you don’t want to be in the other 25%.

The truth is, all the dates on the purchase offer are hopefully fitting together like a glove. The dates the lender meets, the inspection dates and the closing dates.   Maybe that is content for another post on another day!

3C

I’m the first to say that sub prime loans should be at a minimum.  But why do some good programs get the ax along with others?

Back in the day (2005, 2006) an investor could purchase multiple properties and bundle them into one loan. Apparently that is either not customary anymore or not allowed.  I’ve Googled, I’ve put out questions to lenders (no replies yet) and I don’t know if it’s a rule or not. Here’s why I’m bringing this up.

Have two listings owned by the same person. One listed under $50k, one listed just over $50k.  It’s seemingly a slam dunk investment, whether you buy one or two. Sec 8 guaranteed income and the rents are high with long term tenants. But not so fast.

If you want to buy the one listed under $50k, good luck getting a loan, because you are not looking for an owner occupied purchase. It’s not impossible, but it’s not easy either.  If you want to buy both? You can’t bundle the loan so go back to the first problem. My issue here is this: If someone is well qualified (as this current buyer is) with great credit and income, already owns other investment properties, and qualifies for a $90k purchase, why is she not qualified if there are two homes instead of one?  Still looking for answers.  And the second reason is…

If someone came on my block and bought the only two homes that are sitting vacant (and yes, we only have two), and kept them up and rented them out so they are not safety issues as vacant homes, I’d be over the moon.  But apparently this is not done anymore.  Imagine that scenario playing out in other neighborhoods across Cleveland.  We have a rental shortage in the single family home niche.  We have renters clamoring for homes to rent.  It seems like a match made in heaven, people who can buy two or three of these homes and renters who can then move in.

Or how about this idea? Someone buys a home as an owner occupied loan, and buys the house next door which is also for sale and vacant,  and rents that one out.  It seems like a win-win proposition to me.

Why can’t this happen? If you have any insight I would love to know.

When I Googled, I found a mixture of information on loan bundling.  This is why I’m perplexed.  And I don’t like the word ‘no’ unless it makes sense!

I saved this as a draft to see if I had any more information from Lenders  about this bundling issue.  The only additional facts I have so far are about regulators now seeing bundling as a commercial loan and so this 1) brings up more loan requiements and 2) puts a commercial loan on residential properties.  Not a good mix, said one lender, so that is why lenders are not doing this anymore. 

3C

Then I remembered a dinner last week. I was lucky to share a meal at the home of a friend and former co-worker last Wednesday.  She likes her vodka martinis and I noticed her hubby was making it with Korski vodka.

I know my good friend likes Polish vodka.

I asked her in the email if she had ever had Korski?  She said, ‘never heard of it!’

I googled.

Turns out, Korski is made by Paramount Distillers which is a long time distiller in walking distance of my home! I HAD investigated their gins (see, I know something even if it’s not about vodka!) a while ago because, I thought, why not support my local distiller if possible? I admit I have not taken the local gin gamble yet (t a bottle of gin exists in my cabinet and has been there for quite some time so haven’t had to buy any yet, although I AM leaning towards trying to find Citadel, a French gin…don’t stone me please!)

Anyway, back to googling.  There is a Cleveland Scene story archived on Paramount Distillers  so I’m going to share it here for those who might have been curious (like me) about the Paramount story .  Not surprisingly, Paramount was started right after Prohibition on, according to the article, a hunch by the founder, that there would be a desire for cheap but quality suddenly legal beverage.  Read (and smile) about the story of Art Modell’s interest in buying Paramount

Loved two aspects to this story: Paramount services NE Ohio and ‘buys’ local (like Van Roy coffee) whenever possible.   And, it seems like many local purveyors use Paramount liquor as their house brand.  Who says only leafy greens and radishes can represent Buy Local?

3C

This is a solid house listed for just under $150k and I’m hoping someone will see this post and say, let’s look look at it honey! (okay, they would be talking to their partners, not me lol)

About ten years ago, a builder put in a few newer homes on infill space (meaning only one house  on a given block) and they did a quality build. This house is on Corning.  Two minutes from Lolita and Lincoln Park for the Arts Festival,  four minutes to Steelyard Commons… you get the idea.

Even with prices a bit lower these days, it’s hard to find a home like this in Tremont for less than $150,000.

The taxes make me sooo envious.  For more info, check out this home’s website: http://1825corningave.howardhanna.com 

3C

Anyway, the appraisal came in under the sale price the sellers and my buyers agreed upon.  This ever happen to you? It happens, and there are choices to be made. Does the seller just accept the lower appraisal price? Do they have money to bring to the closing table to pay off their old loan (if that is an issue)? Do the buyers have extra cash to bring to the table? If only X amount of money can be mortgaged because of the appraisal, then either the new, lower price has to be accepted or someone has to bring cash to the table.

The other option was my new experience.  My buyers (who are the only ones who can do this since they are the ones with the contract with the lender) agreed to dispute the original appraisal and more comparative sales from the past year were provided to the appraiser.  We don’t know what will happen of course.  The appraiser could change the market value based on this new information or not.

The way appraisals are done now is different than when I first got into the business.  Back in the day, appraisals generally appraised areas they are familiar with.  In other words, if an appraiser is used to doing her work in Medina or Summit County, they would probably not be involved in appraisals here in Cuyahoga.  Some appraisers still turn down a chance to do an appraisal when their number comes up (It’s done on a rotating basis now, no picking of an appraiser is allowed).  I’ve only had that happen once. And if an appraiser is not familiar with an area, it can really affect what they consider the market value.

It would be like me trying to list or sell a home in Akron.  There are niche neighborhoods or even niche streets in any neighborhood, where market values are higher than other streets, even those within a mile  radius.  I refer people to good Akron agents when someone calls me!  With the current appraisal system, someone who is used to appraising Berea or Strongsville or Solon or Rocky River, may not appreciate the niche neighborhoods in Cleveland zip codes.  Make sense?

Anyway, it’s the system we are living with now.  And it makes me want to inform sellers about it.  It’s really not just about whether a buyer will agree to your listing price.  It’s also very much about what other homes have sold for recently and whether that agreed upon price is going to hold up when a buyer tries to get a loan.

So now we wait and see what the original appraiser has to say about the dispute.  The 2nd option is for the buyers to agree to another appraisal, which will mean more money out of their pocket, if things get that far.

The last point is, lots of buyers, our office and our company as a whole, have had a better year so far in 2012 than either of the past two years.  However, Sellers are still feeling the pinch of lower sales prices. 

3C

She mirrors the mind set of five other relocation clients I’ve had since Winter (the sixth bought a home for less than $30,000 but had a place to live, with relatives, untii the remodeling was completed).

If you are preparing your home to sell, mechanical upgrades, roof repairs or replacement, and any other maintenance work you can think of, is much more important to my buyers these days than whether or not an addition is made to the home.

Here is an article from Yahoo! Finance on what they consider the worst way to spend your money thinking you will ‘get it back’ when you sell your home.  I don’t disagree with anything they say.

More than one bathroom is always a plus for any buyer, and if you want to spend money and have a few closets on a level of your home that you can convert inexpensively, you will probably benefit when you sell.  (And please, if you have a choice, and are adding one on the 1st floor near the kitchen, have the door open to a hallway instead of to the ktichen, it’s much more desirable).  Do an inexpensive bathroom in this case, no need for upgraded fancy sinks that cost a lot of money.  But a bathroom add will be a plus.

If you have repairs needed to the exterior of your home, make them before you list it for sale. If a buyer is using FHA lending, you will be unpleasantly surprised at newer rules (over a year old now though) that will require a certified lead paint contractor do the work. It can be quite pricey.  So spiff up your home and do all the maintenance required (servicing your furnace, for example) and you will be well ahead of the game.

3C

It really got me thinking, and I realized, my thinking started with, of all things, an article I read on the Web from Architectural Digest about Brooke Shields and her home in NYC.  I know, who’da thunk!  Hear me out.  It was hard to read the article and not feel her passion and reasoning about why she feels such a sense of place in her home and her Greenwich Village community.  I started thinking: the best place to raise a family is where you feel most comfortable.  Maybe it’s a big city like New York where you can develop your own sense of place and find your favorite coffee shops and take the bus to school to drop off your young children.  Maybe it’s  an inner ring suburb where you are close to a Zoo or parks for hiking or a diversity of ethnic foods.  Maybe it’s a rural town where you own a farm and love tending to the animals or big family dinners  looking over your crops in warm weather, where you each help other farmers  with barn repairs or take your kids to watch an animal being birthed.  I may be waxing a bit poetic, but think about it.  There is no ideal place unless you make it a family destination.

I was not fortunate enough to have children.  But if I did, I imagine my passion for cities would have shined through and enjoyed walking with them AND the dog, talking to neighbors, finding out about new babies born, meeting new neighbors, getting to know the local shopkeepers and frequenting favorite haunts with them.  Playing tennis in Jefferson Park, attending kids events at Metro park Zoo, going to out door concerts.  All things I can do now that my kids would see me enjoying.  It would, I think, give them a sense of place, of home, even if they didn’t know what to call it.

So I say find your place and then enjoy it with your children.  If your not enjoying your place, then maybe find a different one that better suits your family.  It’s kind of true though, no? That any place that is home can be the best place to raise a family.  Thanks to Tyler for helping me think about all this in perspective and for a great article!   3C

Yes, I’m a Realtor® and yes, I make money if you get a sub prime loan when you shouldn’t.  But I don’t want to do that.  Yes, you heard that right.

If a traditional mortgage lender will not give you a loan, take their advice and take the steps necessary to rebuild your finances.  I can’t say this enough.

Why are sub prime lenders trying to lure you in? Because they feel sorry for you and want you to achieve ‘the American Dream?’  Nope.  Because they want to make money.  Pure and simple.  And they don’t learn from history, they just know their profits are down due to new banking regulations and they need more profits.  They are counting on you to open that letter in your mail that says we will make a loan to you so you can buy a home, even if others have turned you down.

According to this eye opening Times article (link above), credit card companies have been making plastic card offers – again – to people who probably shouldn’t be extended plastic credit (sorry, that’s what I call it, because it’s not real, it’s plastic.  If I do this I don’t own the money, it’s not in my bank account, I’m assuming George Clooney will call me and ask me to marry him and then I will have the money to pay the bill next month. Sound fantastic? Yep, about as fantastic a dream as some who accept new credit offers without any realistic hope of paying  for their purchases when the bill comes due!)  Capitol One is making these plastic offers and now it is no surprise they are on the list of companies getting into sub prime lending again.

Soap box closed again, but please think twice?  3C

Another related article from Business Insider: Why Bankers Worry About Multigenerational Families Living Together.